SECURE 2.0: Key Retirement Plan Compliance Priorities for 2026
Review the most significant focus areas for this year and prepare for increased coordination among sponsors, payroll providers, recordkeepers, third-party administrators (TPAs), trustees and custodians, and legal counsel.
In 2026, SECURE 2.0 Act of 2022 (SECURE 2.0) compliance is no longer primarily a plan document issue – it’s an operational one. Sponsors that don’t align payroll, recordkeeping, participant communications, and governance risk compliance failures even when plan design is technically correct.
Act on 2026 sponsor priorities
For many sponsors, the highest-risk SECURE 2.0 issues are not limited to plan documents.
Sponsors should focus on the following areas.
| 2026 priority | Sponsor action | Committee oversight/focus |
| Auto-enrollment | Determine whether IRC Section 414A applies. Validate default rates, escalation, notices, opt-outs, permissible withdrawals, and default investments. | Collect evidence that management and vendors tested the process. |
| Long-term, part-time (LTPT) employees | Track 500-hour service periods and eligibility dates. Coordinate eligibility, notices, and eligible automatic contribution arrangement (EACA) coverage where applicable. | Confirm that legacy part-time exclusions were reassessed. |
| Enhanced catch-up |
Confirm plan design and 2026 catch-up limits, including the age 60-63 enhanced catch-up decision. |
Approve or acknowledge enhanced catch-up implementation decisions. |
| Roth catch-up |
Identify affected participants using 2025 Federal Insurance Contributions Act (FICA) wages. Decide how to address plans that don’t have Roth features. |
Oversee payroll and recordkeeper readiness and participant communication plans. |
| Required minimum distributions (RMDs) |
Update participant materials, forms, website content, and call center scripts. | Confirm that outdated Roth and RMD language was removed. |
Automatic enrollment under IRC Section 414A is now a compliance issue for many newly established 401(k) and 403(b) plans. Section 414A generally applies to 401(k) and 403(b) plans established after Dec. 29, 2022, for plan years beginning after Dec. 31, 2024, unless an exception applies.
Covered plans are required to include an EACA for employees eligible to make elective deferrals, subject to applicable exceptions and affirmative-election rules. Following is a list of the statutory requirements and operational features for an EACA.
- Default employee deferrals between 3% and 10% of compensation
- Annual automatic escalation of 1%
- Escalation to at least 10% but no more than 15%
- Ongoing participant opt-out rights
- Ability to process permissible withdrawals of default contributions and related earnings within the applicable EACA timing rules
- Default investment handling consistent with applicable qualified default investment alternative rules when participants do not make investment elections
- Timely annual automatic enrollment notices
For 2026, sponsors should focus on determining whether their plans are subject to Section 414A based on plan adoption history, employer status, controlled-group and multiple-employer plan facts, applicable exceptions, and whether payroll systems, participant notices, default investment arrangements, opt-out procedures, permissible withdrawal processes, and administrative procedures are functioning consistently across vendors and internal systems.
While several exceptions apply, including certain governmental, church, Savings Incentive Match Plan for Employees (SIMPLE) Individual Retirement Account (IRA), and grandfathered plans, sponsors should work with advisers to determine whether Section 414A applies.
For 401(k) plans, certain LTPT employees generally become eligible to make elective deferrals after completing two consecutive 12-month periods with at least 500 hours of service for plan years beginning after Dec. 31, 2024, replacing the prior three-year standard. Certain Employee Retirement Income Security Act of 1974 (ERISA)-covered 403(b) arrangements have related LTPT and universal availability considerations that should be evaluated separately.
Importantly, current proposed IRS and Treasury regulations indicate that once LTPT employees become eligible under a plan subject to Section 414A, they generally also must be included in the plan’s EACA unless they affirmatively opt out.
Accordingly, sponsors should ensure that:
- HR and payroll systems properly track 500-hour service thresholds
- Eligibility dates align operationally with plan administration
- LTPT employees receive required notices
- Default investment elections are applied properly
- Legacy exclusion practices for part-time employees are reevaluated
- Recordkeeper and payroll eligibility feeds are tested before initial LTPT enrollment dates
- Committee materials reflect management’s conclusion on LTPT readiness and any identified exceptions or corrections
For most 401(k), 403(b), and governmental 457(b) plans:
- The 2026 elective deferral limit is $24,500.
- The standard age 50-and-over catch-up limit is $8,000.
- Participants who attain ages 60 through 63 during 2026 may make catch-up contributions up to $11,250 if the plan permits the enhanced catch-up feature; this $11,250 amount is the catch-up limit, not the participant’s total elective deferral limit.
The enhanced age 60-63 catch-up limit is not self-executing for every plan. Sponsors should confirm whether the plan’s terms, incorporation-by-reference language, payroll configuration, and recordkeeper settings permit the enhanced catch-up feature, and they should document the plan-level implementation decision.
Sponsors should confirm the following reflect current 2026 contribution limits and plan-specific design decisions:
- Plan documents
- Plan amendments or interim amendment tracking
- Payroll settings
- Recordkeeping systems
- Participant communications
- Enrollment materials
Sponsors also should recognize that SIMPLE IRA plans and certain 403(b) and governmental 457(b) arrangements may involve separate or additional catch-up rules requiring individualized review.
One of the most operationally significant SECURE 2.0 changes taking effect involves mandatory Roth catch-up contributions for certain higher-paid participants.
Under the new rules, eligible participants generally must make catch-up contributions on a Roth basis if their FICA wages for the preceding calendar year from the participant’s common-law employer sponsoring or contributing to the plan exceeded the applicable Roth catch-up wage threshold ($150,000 for 2025 wages used to determine Roth catch-up treatment in 2026).
This requirement:
- Applies based on prior-year FICA wages from the participant’s common-law employer sponsoring or contributing to the plan, subject to special rules for multiple-employer arrangements, transfers, and common paymaster situations
- Does not aggregate compensation across unrelated employers and may require plan-specific review where related employers, transfers, or common paymaster arrangements are involved
- Generally does not apply to participants without prior-year FICA wages from the relevant sponsoring or contributing employer
The Roth catch-up rules generally apply to 401(k) plans, 403(b) plans, and governmental 457(b) plans but generally do not apply to simplified employee pension (SEP) arrangements or SIMPLE IRA plans.
Sponsors should use FICA wage data to identify affected participants and confirm that payroll systems and recordkeeping platforms can properly administer Roth catch-up treatment, including deemed Roth catch-up elections and correction procedures where applicable.
RMD communications should reflect current IRS guidance on the elimination of lifetime RMDs for designated Roth accounts, including in 401(k), 403(b), and governmental 457(b) plans where designated Roth accounts are available. Sponsors should review and update older participant materials, website content, forms, and call-center scripts that still might reflect prior law.
Sponsors also should accurately communicate the future transition in the applicable age for RMDs.
- The applicable RMD age generally is 73 for individuals who reach age 73 before Jan. 1, 2033.
- The applicable RMD age generally increases to 75 for individuals who attain age 74 after Dec. 31, 2032.
- IRS proposed regulations would treat individuals born in 1959 as having an applicable RMD age of 73.
The still-working exception also remains important for certain active employees if:
- The plan permits the exception
- The participant is not a 5% owner
Sponsors should ensure that participant communications, recordkeeping systems, and internal administrative procedures consistently reflect:
- Current age-73 rules
- Plan-specific still-working provisions
- Updated designated Roth account treatment
- Beneficiary RMD rules, which continue to apply after the participant’s death
- Procedures for identifying and correcting outdated participant-facing RMD language
Operational coordination will be critical for readiness
Across all major SECURE 2.0 provisions, a consistent theme has emerged: Day-to-day administration matters as much as technical plan design.
Sponsors should work proactively with ERISA counsel, payroll providers, recordkeepers, TPAs, trustees and custodians, and internal HR and benefits teams to ensure plan documents, participant communications, payroll systems, administrative procedures, and operational practices are aligned with current SECURE 2.0 requirements.
A practical readiness review should compare plan terms, payroll codes, recordkeeper configuration, notices, website content, call-center scripts, and committee reporting. Sponsors should consider the following questions:
- Has management documented whether the plan is subject to Section 414A automatic enrollment?
- Have payroll and HR systems been tested for LTPT eligibility tracking and enrollment dates?
- Do plan documents and recordkeeping platforms reflect the current year catch-up limits and any age 60-63 enhanced catch-up design decision?
- Has the sponsor identified participants whose prior year FICA wages exceed the Roth catch-up threshold?
- If the plan does not currently offer Roth contributions, has the sponsor determined how Roth catch-up requirements will be addressed?
- Have participant communications, website content, forms, and call-center scripts been updated for current RMD and designated Roth account rules?
As additional IRS and Treasury guidance evolves, sponsors should continue monitoring regulatory developments closely to minimize operational risk, participant confusion, and the need for formal corrections heading into future plan years.
Organizations that take a proactive, cross-functional approach today will be better prepared to navigate future changes while maintaining a positive experience for participants and fulfilling their fiduciary responsibilities.
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