Starting in 2026, individuals aged 50 and older who earned at least $150,000 in the previous year will be required to make catch-up contributions to their 401k, 403b, and 457b plans as Roth contributions. While this change may increase immediate tax revenue for the federal government, it introduces significant complexity for recordkeeping firms, as they navigate a new compliance landscape created by these requirements. Plan sponsors and payroll providers will likely take the initial steps to adapt, but the burden of compliance will increasingly fall on recordkeepers.
On December 4, 2025, the U.S. Treasury Department and IRS released Notice 2025-60, which includes the Required Amendments List for 2025 concerning qualified defined benefit and defined contribution plans, as well as 403b plans. This RA List details the amendments that must be made in response to legislative and regulatory changes applicable to both individually designed and pre-approved plans. Each year's RA List consists of updates for which the IRS has issued guidance or does not anticipate needing guidance, and it outlines compliance requirements for the calendar year in which it is published.
In the retirement plan industry, there is a tendency to focus on high-profile issues like lawsuits, excessive fee claims, and fiduciary scandals. However, the true danger to most 401k plans lies in the often-overlooked aspect of compensation definition. This subtle yet significant factor can pose greater risks than fees, investment choices, or other flashy concerns. While it may not be as dramatic as a blockbuster movie, understanding this element is crucial for maintaining a healthy retirement plan and avoiding disaster.
A federal court judge in Tennessee ruled in favor of AutoZone and its investment committee in an ERISA case regarding the company's 401k plan. The case, Iannone et al. v. AutoZone Inc., concluded that plan participants did not prove that AutoZone mismanaged its investment options. The judge found that AutoZone's investment committee met quarterly, regularly monitored funds, and made significant changes to lower fees and update default investment options. Consequently, the judge determined that AutoZone did not breach its fiduciary duties under ERISA.
The "401k Christmas wish list" imagines what experts in retirement planning would desire to improve the 401k landscape. Instead of material gifts, the focus is on policies, plan designs, and behavioral habits that can shape retirement outcomes over time. The wish list emerges as a coherent collection of wishes emphasizing clarity, access, consistency, and an understanding of human behavior in relation to retirement savings.
According to Corporate Insight's latest benchmark report, firms that are investing in AI technology are experiencing substantial improvements in their digital services. Kara Sostar, a retirement research manager at Corporate Insight, noted that early adopters of AI are seeing tangible benefits, particularly in areas like search, virtual assistance, and personalized content delivery. This year, companies that strategically invested in these digital features have gained a competitive edge. Fidelity and TIAA were highlighted as leading examples, maintaining their top positions from the previous year's study.
According to this paper, State auto-IRA initiatives have expanded opportunities for many additional workers to save through payroll deductions in two ways: by participating in the newly established auto-IRAs and by increasing the adoption of employer-sponsored retirement plans. The paper is structured as follows: The first section offers an overview of state auto-IRA programs. The second section outlines the data and methodology employed to assess the impact of these programs on the proportion of employers providing their own retirement plans. The third section presents the findings of the analysis. Finally, the concluding section highlights that state auto-IRAs have encouraged a greater number of employers to establish their own retirement offerings.
Research from the Plan Sponsor Council of America indicates a significant increase in employee participation and the adoption of automatic features in 403b plans for 2024. The survey found that the percentage of eligible employees with an account balance rose by five points to 85.1%. Additionally, contributions from employees increased to 78.3%, up from 73.7% the previous year. Employees continued to defer an average of 6.7% of their gross annual pay, while employer contributions slightly increased to an average of 5.4%, resulting in a combined savings rate of 12.1%.
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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.
