Compliance to Confidence: 2026 Retirement Plan Trends to Watch

From rules to readiness to action with SECURE 2.0

It’s 2026 and SECURE 2.0 is no longer theoretical—it’s actionable. Several provisions now require real operational follow-through, particularly the mandate for Roth catch-up contributions for employees earning more than $150,000 in prior-year FICA compensation.

“Roth catch-up isn’t just a plan amendment—it’s a payroll transformation,” shares Jesse Drage, Director of Retirement Plan Services at Associated Bank. “Sponsors can easily underestimate the data dependencies, testing requirements and employee communication challenges.”

Drage further asserts that “the risk isn’t regulatory noncompliance alone; it’s participant frustration when elections don’t work as expected, contributions are misapplied or they incur an unexpected tax liability.”

Plan document restatements are another looming milestone. With a December 31, 2026 deadline, many sponsors will be called to take action on several new elective options made available in SECURE 1.0 and SECURE 2.0.

The biggest risk per Drage is complacency. “Many sponsors assume service providers will handle SECURE 2.0, but accountability still rests with the sponsor. Areas like mandatory Roth catch-up, and auto-enrollment for new plans, as well as new distribution options and reporting changes require active coordination across payroll, recordkeeping and legal partners.”

“Sponsors who delay decisions or fail to monitor and document properly may risk operational errors and increase fiduciary exposure,” cautions Drage. “It is essential for sponsors to engage strong fiduciary partners to help them navigate the increased compliance burdens brought on by this latest wave of regulations.”

The employers who are ahead of the curve are planning earlier, creating room for thoughtful implementation instead of last-minute fixes.

From exploration to execution: In-plan lifetime income takes hold

Interest in retirement income solutions has moved beyond theory, and the shift from concept to adoption is supported by fiduciary safe harbor provisions. Sponsors are exploring annuities and managed income solutions, while balancing simplicity, flexibility and cost. For some plans, these solutions can enhance retirement readiness. For others, added complexity may outweigh the benefit.

So what makes an effective in-plan income solution? According to Drage, “Clarity and optionality. Successful in-plan income solutions are easy to explain, integrated into the participant journey and positioned as one of several retirement tools—not a forced outcome.”

Alternative assets in DC plans—separating hype from reality

Alternative assets are also drawing attention, particularly ahead of anticipated Department of Labor guidance. While alternatives may offer diversification potential, they introduce considerations around liquidity, fees, valuations and participant understanding. Here, prudence matters more than novelty. What works on paper doesn’t always work in practice.

Drage suggests sponsors do their homework before considering alternative assets.

“Sponsors should ask whether alternative assets truly improve participant outcomes, whether liquidity constraints are appropriate for their workforce and whether fees and complexity can be clearly explained. Alternative assets are not inherently imprudent—but they demand a higher bar for due diligence, education and fiduciary oversight.”

Thoughtful evaluation—not industry buzz should guide decision-making. Our Associated Bank professionals will help you cut through the noise.

Phased retirement and the reality of longer careers

Today’s workforce is aging differently. Employees are working longer—but not always in traditional roles. Phased retirement, flexible schedules and delayed full exits are becoming the norm, and retirement plans play a meaningful role in supporting these transitions.

At the same time, employees are raising the bar. Expectations around participant support and education are increasing, adding pressure for plan sponsors to show not just what they offer, but how they support informed decision-making.

Forward-thinking employers are responding by being more intentional. Flexible plan design, paired with clear, targeted education, helps employees navigate concepts like Social Security timing, Medicare decisions, and distribution planning. This approach supports participants while also demonstrating a prudent, defensible process.

The payoff is practical. Employers see smoother workforce transitions, improved retention and more predictable succession planning. And when education is delivered thoughtfully, sponsors are better positioned to meet regulatory scrutiny with confidence instead of concern.

“Phased retirement options can be a win-win,” says Drage. “It can provide employees flexibility and income continuity while allowing employers to retain institutional knowledge, plan workforce transitions and reduce abrupt talent gaps. When aligned with benefit and compensation strategies, it’s a win for employers and employees.”

When employees feel clearer about what comes next, employers gain flexibility—and regulators see a sponsor that is prepared, engaged and deliberate.

The new face of managing fiduciary risk

Fiduciary scrutiny continues to intensify. Litigation, regulatory oversight and participant expectations have raised the bar for what “reasonable process” looks like.

Fee benchmarking, vendor oversight, cybersecurity protocols and documentation are no longer best practices—they’re expectations. But the strongest sponsors are shifting how they think about fiduciary responsibility. Fiduciary decisions should be supported by a well-defined and documented process that is defensible and repeatable.

Relying on experienced partners to help

As plan complexity grows, many employers are relying more on outside fiduciary support to mitigate risk and ease administrative burdens. Fiduciary duties in retirement plans, governed by ERISA, require plan sponsors to act with prudence and loyalty which means to act solely in the interest of participants, avoid conflicts of interest, follow plan documents and legal requirements, diversify investments, and pay reasonable expenses. Meeting this standard can be burdensome so it’s no surprise that that plan sponsors would seek out qualified fiduciary partners to assist them.

Drage says that “engaging professional fiduciary partners makes sense when sponsors lack internal knowledge or want to mitigate risk through professional governance. It’s less effective if sponsors disengage entirely.” He also drives home an important reminder, “Even with outside fiduciaries, sponsors must remain informed, ask questions and monitor their service providers.”

Outside fiduciaries offer a way to rebalance that equation. While tradeoffs exist between control, cost and risk transfer, more employers are finding value in partnering with fiduciaries who can shoulder some of the day-to-day responsibility while keeping plan strategy aligned with employer goals.

For organizations navigating this decision, working with experienced fiduciaries can help simplify complexity, reduce exposure and bring confidence back into plan governance.

What 2026 demands of plan sponsors

The most effective retirement plans in 2026 won’t be defined by complexity or novelty. They’ll be defined by clarity of purpose.

If there is one strategic improvement a sponsor could make in 2026, Drage would prioritize “tightening the integration between plan design, participant behavior and data analytics.” He says, “Sponsors who better understand how employees engage with their plan can make smarter decisions that improve outcomes without materially increasing cost.”

From there, it’s imperative to ask: What are your goals as a plan sponsor? And what are you trying to accomplish for your employees? Different employee populations have different needs, and plans designed with those realities in mind tend to be more resilient and more impactful.

Employers who embrace their role as plan sponsors— can both meet compliance requirements and enhance plan design to reduce risk, support talent objectives and work to improve participant outcomes simultaneously. In a year defined by change, having the confidence to embrace change can lead to a competitive advantage.

For more than 50 years, Associated Bank has provided forward-thinking retirement plan solutions and consistent service excellence furthering our tradition of building long-term relationships. Speak with a Retirement Plan Consultant today for help in navigating the 2026 retirement trends and what they mean for you.