Background
RetirePath Virginia is the Commonwealth's state-facilitated automatic-enrollment retirement savings program, administered by Commonwealth Savers and managed through Vestwell State Savings, LLC. It launched in June 2023 and was originally mandated for Virginia employers with 25 or more employees who did not already offer a qualified retirement plan.
Governor Spanberger signed House Bill 176 and Senate Bill 149 in May 2026, lowering the employee threshold from 25 to five. The expansion is estimated to bring approximately 35,000 additional Virginia businesses into scope and extend retirement savings access to an estimated 350,000 more Virginians.
Who Is Required to Participate
Beginning July 1, 2026, Virginia employers are required to either register for RetirePath or certify an exemption if they meet all of the following criteria:
• The business is a Virginia for-profit or non-profit private employer
• The business has been operating for two or more years
• The business has five or more eligible employees (age 18 or older, earning wages, and working at least 30 hours per week during any portion of the preceding 12 months)
• The business does not currently offer a qualified employer-sponsored retirement plan such as a 401(k) or SIMPLE IRA
Employers who already offer a qualified plan are exempt. They can certify their exemption online using the unique access code the state provides.
How RetirePath Works
RetirePath is structured as an automatic-enrollment Individual Retirement Account (IRA). Eligible employees are defaulted into a Roth IRA at a 5% payroll deduction rate and have a 30-day window to change their contribution rate, switch to a Traditional IRA, or opt out entirely.
For employers, the program includes:
• No employer fees
• No fiduciary responsibility
• No employer matching or contributions (not permitted under the program)
• Integration with most payroll systems
• Employee accounts and communications managed directly by RetirePath
A small administrative fee is deducted from participating employee accounts to cover program operating costs. There is no cost charged to the employer.
Program Limitations to Be Aware Of
Because RetirePath is an IRA-based program, it is subject to IRS contribution limits. For 2026, the standard IRA contribution limit is $7,000 per year ($8,000 for employees age 50 and older). This is significantly lower than the contribution limits available through a 401(k) or SIMPLE IRA.
Employers cannot contribute to or match employee contributions through RetirePath. Business owners who wish to maximize their own retirement savings may find that a private plan offers greater flexibility for their personal financial planning.
Compliance and Registration
Starting July 1, 2026, the state will begin mailing and emailing notices to approximately 35,000 newly eligible businesses. Each notice will include a unique access code, registration deadline, and step-by-step instructions for either enrolling in RetirePath or certifying an exemption.
Virginia has not yet published specific penalty amounts for noncompliance. However, similar state programs in other states have imposed fines ranging from $250 to $500 per eligible employee. Employers should not ignore notices when they arrive.
Employers can also use the eligibility quiz at RetirePathVA.com to determine whether their business is required to register.
Considering a Private Retirement Plan Instead
Employers are not required to use RetirePath. Any business that establishes and maintains a qualified retirement plan, such as a 401(k), SIMPLE IRA, or SEP IRA, is exempt from the RetirePath requirement.
Private plans typically offer higher contribution limits, the option for employer matching, and greater flexibility in plan design. For business owners who also wish to maximize their own retirement savings, a private plan may be worth evaluating alongside or instead of RetirePath.
Questions About Your Options?
Authentic Wealth Partners works with trades and construction business owners across Virginia on retirement planning, business financial strategy, and employee benefit decisions. If you have questions about whether RetirePath applies to your business, or whether a private retirement plan may be a better fit, we are available to discuss your situation.
This post is for informational purposes only and does not constitute legal, tax, or financial advice. For information about RetirePath Virginia, visit RetirePathVA.com.