Summer Is the Time to Get Ahead: What 401(k) Plan Sponsors Should Have on Their Radar
The second half of the year can arrive quickly for retirement plan sponsors. Summer provides a natural opportunity to step back from day-to-day plan administration and focus on the regulatory updates, plan design considerations, and strategic decisions that may shape the months ahead. Now is a good time to review key developments and identify any actions that may be needed before year-end planning begins.
For retirement plan sponsors, however, this quieter period may present an opportunity to evaluate the health of their retirement plan. Rather than waiting until the end of the year to address compliance requirements or plan design considerations, sponsors can use the summer months to review upcoming changes and identify areas that may require planning.
Several retirement plan developments will continue to shape sponsor responsibilities and participant experiences in 2026 and beyond.
Plan Amendment Deadlines Are Approaching
An important compliance consideration for plan sponsors is the upcoming plan amendment deadline related to the SECURE Act, CARES Act, and SECURE Act 2.0 provisions.
While many plans may already be operating in accordance with applicable rules and guidance, formal plan document updates are still required. For calendar-year plans, amendments generally must be adopted by December 31, 2026. Plan sponsors that have implemented operational changes over the last several years should work with their service providers and advisors to confirm that plan documentation is aligned with current plan operations.
The deadline may seem distant today, but reviewing amendment requirements now can help avoid a last-minute scramble later.
Roth Catch-Up Contributions Will Affect Higher Earners
Beginning in 2026, new rules will impact certain participants age 50 and older who make catch-up contributions to workplace retirement plans.
Under SECURE Act 2.0, participants whose prior-year wages exceed the applicable compensation threshold, generally around $150,000 and indexed for inflation, must make catch-up contributions on a Roth, or after-tax, basis. Plans that currently permit catch-up contributions but do not offer a Roth feature may need to evaluate whether plan design changes are necessary. Sponsors should also consider offering participant education to help affected employees understand the change.
Automatic Enrollment and Escalation Features
Automatic enrollment and automatic escalation have become increasingly common across retirement plans.
SECURE Act 2.0 generally requires certain newly established 401(k) and 403(b) plans to include automatic enrollment and annual contribution increases.
For sponsors reviewing their plan design this summer, these automatic features may be an area worth evaluating, particularly if participation rates have remained stagnant.
Eligibility Rules Have Expanded for Part-Time Workers
Changes to long-term part-time employee eligibility are helping to create new opportunities for retirement plan participation.
Recent legislative updates expanded access by allowing eligible long-term part-time employees to participate after meeting applicable service requirements. Sponsors should review their eligibility tracking processes and confirm that payroll and recordkeeping systems are prepared to identify affected employees.
As workforce demographics continue to evolve, expanded eligibility rules may help increase participation levels and administrative responsibilities.
New Plan Design Options Are Emerging
SECURE Act 2.0 introduced several optional plan features that sponsors may choose to adopt, including student loan matching. This feature allows employers to make retirement plan matching contributions based on eligible employee student loan payments. The goal is to help employees continue building retirement savings while paying down educational debt.
Enhanced catch-up contribution limits are another area of interest. Employees ages 60 through 63 may be eligible to make larger catch-up contributions than the standard age-50 catch-up amount, depending on plan provisions. For participants nearing retirement, these higher limits may help create additional savings opportunities.
RMD and Communication Requirements Continue to Evolve
Retirement distribution rules have also changed in recent years. Under SECURE Act 2.0, the age for required minimum distributions (RMDs) increased to 73 for many retirement account holders. Sponsors may want to review participant education materials to ensure they reflect current distribution requirements.
Participant communication requirements are also changing. Beginning in 2026, plans generally must provide at least one paper benefit statement annually unless participants elect electronic delivery. Sponsors should work with recordkeepers and service providers to understand how these requirements will be implemented.
Use Summer to Be Proactive
Most of these developments do not require immediate action, but they do warrant attention.
Summer provides a valuable opportunity to review plan operations, evaluate plan design features, assess participant communication strategies, and prepare for upcoming deadlines. Taking time now to understand emerging requirements may help position sponsors to make informed decisions before year-end planning begins.
This is intended for informational purposes only. You should not assume that any discussion or information contained in this document serves as the receipt of, or as a substitute for, personalized investment advice from Savant. Please consult your investment professional regarding your unique situation.
Patricia L. Hutchinson
Director of Retirement Plan Services
AIF®, MBA