Resources

Business Advisory & Compliance Update

Overview

Effective July 1, 2026, Virginia expanded its RetirePath Virginia retirement savings program by lowering the
employer threshold from 25 employees to 5 employees. Businesses that have operated for at least two years and
have five or more eligible employees must either offer a qualified employer-sponsored retirement plan or
participate in RetirePath Virginia.

What Changed?

• Previous threshold: 25 or more eligible employees
• New threshold: 5 or more eligible employees
• Employers must either offer a qualified retirement plan or facilitate RetirePath Virginia
• Newly eligible employers should watch for registration notices and deadlines from the state

Key Employer Actions

• Review employee counts and eligibility requirements.
• Confirm whether your business already offers a qualified retirement plan.
• Evaluate whether RetirePath Virginia or a private retirement plan best fits your organization.
• Monitor state communications regarding registration and compliance deadlines.
• Prepare for employee enrollment and payroll deduction administration if participating in RetirePath.

RetirePath Virginia vs. Private Retirement Plan

Why Employers May Choose RetirePath Virginia

RetirePath Virginia provides a straightforward compliance solution for businesses that do not currently offer a
retirement plan. Employee contributions are made through payroll deductions, and employers generally are not
responsible for investment management or employer matching contributions. For some businesses, however, a
private retirement plan may provide additional recruiting, retention, and owner-benefit opportunities.

Frequently Asked Questions

Q: What changed on July 1, 2026?

A: Virginia lowered the participation threshold from 25 employees to 5 employees.

Q: Which employers are affected?

A: Generally, those operating for at least two years with five or more eligible employees that do not offer a qualified retirement plan.

Q: What plans qualify?

A: Examples include 401(k), SIMPLE IRA, SEP IRA, 403(b), and other qualifying retirement arrangements.

Q: Do employers have to contribute?

A: RetirePath Virginia is generally funded through employee payroll deductions.

Q: Can a business remain exempt?

A: Yes, employers that offer a qualifying retirement plan generally remain exempt, subject to any required certification process.

Q: Should I choose RetirePath or a private plan?

A: The answer depends on workforce size, administrative preferences, and long-term benefits goals.

Questions to Ask if You Received a RetirePath Notice

• Do I already qualify for an exemption?

• Have I counted eligible employees correctly?

• Would a 401(k), SIMPLE IRA, or SEP IRA provide greater long-term value?

• What payroll changes will be required?

• Are there retirement plan tax incentives available?

How MillerMusmar Can Help

MillerMusmar CPAs assists business owners with tax, payroll, accounting, and compliance matters. Our team can help evaluate retirement plan options, discuss compliance considerations, and coordinate with payroll and retirement plan providers.

Not Sure Whether Your Business Is Affected?

MillerMusmar CPAs can help evaluate retirement plan options, determine eligibility, and discuss compliance considerations. 703-437-8877  info@millermusmar.com

Written by Taylor Christian, Senior Accountant at MillerMusmar CPA.