Many retirement plan service providers either oversimplify and exaggerate their value or fail to communicate it clearly. ERISA 3(38) fiduciary investment managers often fall into these categories. A recent court case offers guidance on how to market ERISA 3(38) services effectively -- without overstating their benefits -- and helps clients understand their ongoing responsibility to monitor these fiduciaries.
The IRS announced updated contribution and benefit limits for 2026. Key changes include the amount individuals can contribute to their 401k plans (as well as 403b) in 2026 has increased to $24,500, up from $23,500 for 2025. Full details here.
Employee participation in 401k plans continues to rise despite economic uncertainty. The PSCA Annual Survey reports that 87.4% of eligible employees contributed in the latest year, up from 86.9%. However, average contribution rates slightly declined: employee deferrals dropped to 7.7% (from 7.8%) and employer contributions to 4.8% (from 4.9%), resulting in a total savings rate of 12.5%. More survey data is provided in this news release.
SEPs are simple to set up and maintain, require no annual filings or compliance testing, and reduce the need for extensive participant education, making them attractive for small employers without dedicated HR or benefits staff. However, some small businesses may find a 401k plan better suited to their goals, particularly when considering contribution allocation, maximum deductible contributions, and eligibility or vesting requirements.
The IRS has announced the 2026 cost-of-living adjustments for various retirement plan limits. Notably, the agency has retroactively increased the Roth Catch-up FICA wage threshold from $145,000 to $150,000. Plan sponsors must apply this updated limit when identifying Highly Paid Individuals for 2026. Any catch-up contributions made by these individuals must be designated as Roth contributions rather than pre-tax. This new threshold must be communicated promptly to all plan sponsors to ensure accurate identification of HPIs for the upcoming year.
Section 603 of the SECURE Act 2.0 requires high earners eligible for catch-up contributions to make them on a Roth basis starting January 1, 2026. The Final Regulations issued in September of 2025 are effective as of January 1, 2027, but the Roth catch-up mandate continues to be effective as of January 1, 2026, such that good faith compliance with the rules is expected between January 1, 2026, and December 31, 2026. Most plans already offer Roth and catch-up options, so implementation will be widespread. The mandatory Rothification is upon us, driven by tax revenue goals, which ultimately benefits participants through Roth savings.
The IRS has released its annual update to retirement plan contribution limits, and while that's welcome news, a few changes have caused some confusion. Let's break them down together. First, we'll tackle Roth catch-up contributions, followed by the SECURE 2.0 "super catch-up" provision.
The DOL plans to revisit and likely update the fiduciary advice rule in 2026, signaling major potential changes for plan sponsors and financial advisers. Below are the key points to watch.
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Collected Wisdom™
Our researchers look for what they think are some of the better resources available to assist you in administering your plan or helping your clients. We group these resources in our COLLECTED WISDOM™ topics to make it easy for you to locate the information you need. Each item in a category contains a summary and date of when it was placed in the group.
We also maintain some older material in these collections for perspective and context.
