IMPORTANT: New Virginia Retirement Mandate Affecting Small Employers

Update regarding NEW Virginia retirement regulations for small businesses.

 

Virginia State Website on legislation: https://lis.virginia.gov/bill-details/20261/HB176

 

The New State Mandate

Virginia law now requires small businesses to provide a retirement savings option. Under the expanded state regulations (effective July 1, 2026), private employers with 5 or more employees must comply.

 

Does This Apply to Us?

Your business must comply if you meet all of these criteria:

• Employee Count: You employ 5 or more workers (including part-time staff).
• Company Age: Your business has been operating for at least two years.
• Current Status: You do not already offer a qualified, employer-sponsored retirement plan.

 

Compliance Options

Eligible businesses must choose one of two paths to fulfill the state requirement:

1. Private Plan: Set up a qualified retirement plan, such as a private 401(k) or SIMPLE IRA.
2. State Program: Register with and facilitate RetirePath Virginia, the state-sponsored program.

 

Key Details of RetirePath Virginia

• No Employer Cost: The state program is completely free for employers to facilitate.
• No Matching: Employers do not (and cannot) match employee retirement contributions.
• Employee Eligibility: Applies to Virginia employees aged 18 or older earning taxable wages.
• Automatic Enrollment: Employees are automatically enrolled but can opt out at any time.

 

Non-Compliance Penalties

Failing to act can become costly. The state enforces an annual penalty of up to $200 per eligible employee for non-compliant businesses.

 

Next Steps: Reviewing Our 401(k) Options

To help us navigate these new regulations and explore setting up a private 401(k) plan, our next step is to consult with Incisive Financial Group. Choosing a private plan allows us to maintain control over our benefits structure while completely exempting our business from the state-mandated program.

Please reach out to Brian Willey at brian.willey@incisivefg.com to review our options, check our compliance status, and discuss the best plan structure for our team.

 

 

 

Michael Stone and Brian Willey offer products and services using the following business names: Incisive Financial Group - insurance and financial services | Ameritas Investment Company, LLC (AIC), Member FINRA/SIPC – securities and investments | Ameritas Advisory Services (AAS) – investment advisory services. AIC and AAS are not affiliated with Incisive Financial Group or any other entity mentioned here. AIC and AAS do not provide tax or legal advice. Please consult your tax advisor or attorney regarding your situation.

 

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