What Changed
25 employees→ 5 employeesVirginia businesses with 5 or more employees are now required to offer a retirement plan, enroll in RetirePath, or face fines for non-compliance.
In May 2026, Gov. Spanberger signed House Bill 176 and Senate Bill 149 into law, significantly expanding the Virginia RetirePath program mandate.
Effective July 1, 2026, the employee threshold drops from 25 to 5, bringing tens of thousands of additional Virginia businesses into scope. For those unfamiliar with the program, read our RetirePath Virginia Highlights article for a broader overview of how the program works.
- Employer threshold drops from 25 to 5 employees
- Part-time workers now count toward the threshold
- Businesses must have been operating for at least 2 years
- Approximately 35,000 businesses will receive notice from the state beginning July 2026
Employers have two options to comply
- Register for the state-run RetirePath IRA program, or
- Establish a qualified employer-sponsored retirement plan (401(k), SIMPLE IRA, SEP IRA, etc.)
Non-compliance penalties
- $20 per employee per year (July 2026 – June 2027)
- $50 per employee per year (July 2027 – June 2028)
- $100 per employee per year (July 2028 onward)
Notices from the State are set to go out to businesses starting in July 2026.
Design a plan to meet your business needs.
Contact our retirement services professionals for more information today.
Raymond James (R.J.) Reibel, CRPS®
Financial Advisor, Retirement Benefits, Managing Director
Call | Email
Paula Megan, CFP®
Associate Financial Advisor, Retirement Benefits, Assistant Vice President
Call | Email
Tyler J. Vitale
Associate Financial Advisor
Call | Email
Sources: https://lis.virginia.gov/bill-details/20261/HB176 & https://www.retirepathva.com
Cary Street Partners is the trade name used by Cary Street Partners LLC, Member FINRA/SIPC; Cary Street Partners Investment Advisory LLC and Cary Street Partners Asset Management LLC, registered investment advisers. Registration does not imply a certain level of skill or training.
Any opinions expressed here are those of the authors, and such statements or opinions do not necessarily represent the opinions of Cary Street Partners. These are statements of judgment as of a certain date and are subject to future change without notice.
These materials are furnished for informational purposes only. Materials have been compiled from sources believed to be reliable; however, Cary Street Partners does not guarantee the accuracy or completeness of the information presented. Such information is not intended to be complete or to constitute all the information necessary to evaluate adequately the consequences of investing in any securities, financial instruments, or strategies described herein.
Cary Street Partners and its affiliates are broker-dealers and registered investment advisers and do not provide tax or legal advice; no one should act upon any tax or legal information contained herein without consulting a tax professional or an attorney.
IRAs, 401(k)s and other retirement plans may have fees associated with them in addition to the costs associated with investing the assets of the retirement plan. These fees may include, but are not limited to: annual account fees; administrative fees that may include recordkeeping of the plan; legal fees; accounting fees; and termination fees. Please consult with your advisor or plan sponsor to learn more about the fees associated with a particular plan.
We undertake no duty or obligation to publicly update or revise the information contained in these materials. In addition, information related to past performance, while helpful as an evaluative tool, is not necessarily indicative of future results, the achievement of which cannot be assured. You should not view the past performance of securities, or information about the market, as indicative of future results. CSP2026178
