Roth Catch-Ups, Alternative Investments Are Top of Mind for 2026

In 2026, plan sponsors face multiple regulatory deadlines and pending guidance on new provisions. These include the December 31 deadline for SECURE 2.0 plan amendments, anticipated Department of Labor guidance on an August 2025 executive order that eases access to alternative investments in 401(k) plans, and expected clarification on a December 2025 executive order concerning proxy advisers.

Sponsors who can identify where risks currently lie will be better equipped to have smooth compliance and avoid costly errors. To help guide the way, industry experts shared their insights on how the legislative backdrop will inform plan sponsors’ priorities, where guidance remains pending, and what to look out for in the year ahead.

Key Changes and Expected Guidance

Continuing a theme from 2025, implementation of the SECURE 2.0 Act of 2022 remains top of mind for plan sponsors in 2026. Perhaps the year’s most highly anticipated new provision is also among the first to go into effect in 2026: the mandate requiring higher-earning participants to make age-based catch-up contributions on a Roth basis, effective January 1.

The IRS has earmarked 2026 as a grace period for sponsors to finish implementing the updated Roth catch-up rules before enforcement goes into full effect on January 1, 2027. “While many plans have faced delays due to late regulatory guidance and administrative hurdles, sponsors are expected to make a good-faith effort to implement this mandate as the deadline approaches,” says Tom McAndrews, MissionSquare Retirement’s chief legal officer.

Sponsors also anticipate official guidance on new rules regarding the correction of overpayments.

“Under SECURE 2.0, sponsors have more leeway not to recoup overpayments, but we are still waiting for formal updates to the Employee Plans Compliance Resolution System to fully align with these statutory changes,” says Shantel-Crystal Nwanguma, vice president of sales activation and ERISA for the enterprise 401(k) provider Human Interest.

Though the IRS has provided interim guidance on the updated overpayment provisions, sponsors do not yet have an official administrative road map for ensuring proper documentation and compliance under the Employee Retirement Income Security Act.

Additionally, 2026 is expected to bring further clarity on a new SECURE 2.0 mandate to provide annual paper benefit statements for defined contribution plans and triennial paper statements for defined benefit plans. Sponsors currently rely on the guidelines set in the 2020 DOL electronic disclosure safe harbor, which lets them send plan documents electronically as long as they notify recipients and provide online access. The new paper requirement aims to bridge a gap between current practice and participants’ recordkeeping needs and preferences.

“We are waiting for the DOL to clarify how a sponsor can maintain a predominantly digital strategy while still satisfying the annual paper requirement without causing participant confusion,” Nwanguma says.

McAndrews says the year will also see many plan sponsors, recordkeepers and tax preparers continue to work with the IRS to implement the SECURE 2.0 Saver’s Match provision ahead of its 2027 effective date. This voluntary program offers a direct federal 50% contribution of up to $1,000 into low-to-moderate-income workers’ retirement accounts and replaces the Saver’s Credit, a nonrefundable tax credit which critics have argued is largely moot for boosting the retirement savings of earners who generally owe little to no annual income tax.

On top of the looming slew of SECURE 2.0 action items, McAndrews expects 2026 to deliver expanded investment options for 403(b) plans.

“Many plan sponsors are closely watching legislation that would allow 403(b) plans to include collective investment trusts and insurance separate accounts,” McAndrews says. “Historically, 403(b) plans have had limited investment lineups compared to 401(k), 457(b), pension and TSP plans. The INVEST Act, recently passed by the House, would provide much-needed parity and flexibility.”

Finally, McAndrews anticipates that plan sponsors will seek further clarification on the use of alternative assets in retirement plans.

“While access to these assets is already available in some plans, many plan sponsors have hesitated due to liability concerns,” McAndrews says. “Once the DOL finalizes guidance, we expect greater adoption, particularly as part of target-date-fund sleeves.

What Plan Sponsors Should Prioritize Now

With changes on the horizon, it is crucial for sponsors to get their implementation priorities in order. Experts were unanimous that sponsors should not wait until the last minute to amend their plans for SECURE 2.0 ahead of the year-end deadline, singling out the new Roth catch-up rule as a top to-do item of 2026.

Though the 12-month enforcement runway for the Roth catch-up contribution rule may seem lengthy, its implementation requires most plan sponsors to coordinate with multiple third-party vendors such as payroll providers, advisers, legal counsel and recordkeepers. These operational practicalities can quickly eat away at administrative timelines. Adding to the complexity is widespread confusion over what the catch-up provision actually entails.

“Many sponsors think the new rule only affects high earners because they misunderstand the ‘universal availability’ requirement,” says Nwanguma. “If you offer the Roth catch-up to the high earner—which you must, to let them contribute—you must offer it to the entry-level employees. This triggers a need to amend the plan to allow Roth contributions for everyone, not just the executives.”

Nwanguma advises sponsors to ask their recordkeepers about how Roth catch-ups will be handled, whether they should provide any documentation to properly identify highly paid individuals, and to clarify sponsors’ responsibility for changing elections to Roth. Sponsors should also make sure they are working with their payroll provider to identify individuals who need to switch to Roth contributions when they hit the relevant threshold.

With the multi-year implementation of SECURE 2.0 nearing a close, sponsors must also remember to broaden the scope of their attention. McAndrews points to the option for pension-linked emergency savings accounts as a specific provision that sponsors should begin to look into sooner than later.

“These accounts offer employees an opportunity to build a financial safety net for unexpected expenses without sacrificing long-term retirement goals,” McAndrews explains. “Although plans have needed to prioritize other changes within SECURE 2.0 given implementation dates, we expect interest here to grow in 2026.”

More on this topic:

	Trump Accounts: What’s Still to Come?
	Catch-Up Contribution Rules May Affect Plans More Than Participants