2026 Retirement Plan Trends at Mid-Year: Eight Themes Still Shaping Sponsor Conversations

Earlier this year, we shared a checklist of eight top trends we expected to influence defined contribution plan decision-making in 2026. Now that we’re past the year’s halfway point, it’s worth checking back in on those themes. Here’s where each now stands, including conversation angles advisors can bring to their next prospecting or committee conversation.

Executive summary: where 2026’s retirement plan trends stand at mid-year

• Key operational lift: mandatory Roth catch-up rule for higher earners
• Evolving fiduciary consideration: AI oversight
• Adoption laggards: emergency saving and student loan match features

1. Target date fund evolution remains a central design question

TDFs remain a center of gravity in many plans, but “the TDF” is no longer a simple, single thing. Sponsors continue to investigate ways to meet the needs of participants who may have very little in common aside from a retirement date. Those options can include multi-glidepath series (e.g., conservative, moderate, and aggressive options within the same vintage).¹

Movement also continues around target date series with embedded income features. Target date funds with annuity components still represent a small slice of total TDF assets, but many new products include them, according to Morningstar research.² See the decumulation section below for more details.

Advisor angle: A glidepath review is an annual best practice.³ For sponsors who chose their plan’s default years ago, it may be time to confirm the series still fits the workforce it’s serving.

2. SECURE 2.0 optimization moves from “implemented” to “examined”

Most of SECURE 2.0’s headline provisions are now operational, so for many the focus is shifting to optimization and documentation. Sponsors should know that the plan amendment deadline for most SECURE 2.0 changes is December 31, 2026 (later for collectively bargained and governmental plans).⁴

Advisor angle: Operational and documented compliance are distinct efforts. Sponsors who “did auto-enrollment” or ensured alignment with the new catch-up rules still need the paper trail and the plan amendment by year-end.

3. Auto-enrollment mandates are live, and the details and risk exposure matter

With SECURE 2.0’s automatic enrollment mandate now in full effect, most new 401(k) and 403(b) plans established after December 29, 2022 must auto-enroll eligible employees at 3% to 10%, escalating 1% a year to at least 10% (capped at 15%).⁵ Proposed regulations issued in January 2025 clarified some sharper edges, including the requirement to cover all eligible employees (including long-term part-time workers), with limited exceptions.⁶ Until final regulations apply, plans are held to a reasonable, good-faith standard.⁷

Advisor angle: The complexity comes from the need for clean execution across payroll, eligibility tracking, and notices, and from headline and employee-relations exposure if a group is missed.

4. Decumulation reaches an “execution” phase

The Institutional Retirement Income Council framed 2026 as the point where sponsors move “from exploration to execution” on in-plan income.⁸ Some may read recent developments – including Vanguard’s decision to add an annuity option within its workplace offerings – as a signal that guaranteed-income features are heading toward mainstream menu status.⁹

Participant data underpin some of the renewed focus. A Corebridge study indicates only 14% of retirees said they had a decumulation plan, and just 29% of workers 55 and older had a plan for withdrawing from their accounts, with a large majority saying they don’t want their savings to shrink.^10,11 Also, as more Baby Boomers enter the retirement age window, this historically large worker cohort will seek information and solutions to help them set their budgeting and drawdown strategies.

Advisor angle: While investment products with integrated income features are an option, they’re not the only lever sponsors can pull. Giving participants education and tools to build their withdrawal strategies is another way to support long-term budgeting and spending confidence.

5. Student loan match: low adoption, but still a potential differentiator

SECURE 2.0 enables employers to treat qualified student loan payments as if they were elective deferrals for matching purposes. This optional feature is in effect for plan years beginning after December 31, 2023, and the IRS issued interim guidance in Notice 2024-63.^12,13 Two and a half years in, plan-sponsor uptake remains modest, with self-certification and fraud concerns cited as barriers to adoption.¹⁴

There is a potential complementary tailwind: the 2025 budget law made the Section 127 employer student loan repayment exclusion (up to $5,250, tax-free) permanent, with inflation indexing beginning after 2026.¹⁵ The two programs work differently – the QSLP match funds a retirement account, while the 127 benefit pays down the loan directly – but pairing them is an option employers can consider, especially if they are competing for top talent.

Advisor angle: Low adoption may be an opportunity. The match could be a recruiting and retention tool employers’ competitors haven’t deployed yet.

6. AI brings value … and potential fiduciary and cybersecurity risk

AI is now embedded across recordkeeping, participant communications, and advisory workflows, raising novel and important oversight questions. Adding AI to plan operations may lead sponsors to revisit their vendor-review protocols, to confirm systems and processes remain explainable, auditable, and bounded.¹⁶ The DOL treats cybersecurity as a fiduciary responsibility under ERISA and has named cybersecurity among its FY2026 enforcement priorities.^17,18

Advisor angle: Help committees explore new questions that could be added to vendor reviews. Does the provider use AI? How, when, and where? Who is accountable if something goes wrong? Documenting those conversations can help add risk protection.

7. The Roth catch-up rule is one of the year’s biggest tax complications

This provision may generate operational scramble. The IRS and Treasury issued final regulations in September 2025, and beginning January 1, 2026, age-50+ participants whose prior-year FICA wages from the plan sponsor exceeded the indexed threshold ($150,000 in 2025 wages, per IRS Notice 2025-67) must make any catch-up contributions on a Roth basis.^19,20 The base deferral is unaffected; only the catch-up portion changes.²¹ (Find our overview of 2026’s plan contribution changes here, including ways to broach related conversations with sponsors and participants.)

The final regulations are generally effective in 2027, with a reasonable, good-faith standard applying through 2026, and many plans may adopt “deemed Roth election” provisions to avoid correction headaches.^22,23

Advisor angle: There are two yes/no checks advisors can broach with sponsors: does the plan offer Roth, and is payroll set up to identify affected earners based on prior-year wages? If either answer is “no,” that may be worth a dedicated meeting.

8. Emergency savings: adoption remains low

Pension-linked emergency savings accounts (PLESAs) let non-highly-compensated employees save in a principal-protected, Roth-treated sidecar capped at $2,500 (indexed), with penalty-free access and optional auto-enrollment up to 3%.²⁴ Despite the potential appeal, adoption remains close to flat: a Plan Sponsor Council of America survey found essentially no sponsors offering a PLESA, with operational complexity and recordkeeper readiness cited as key impediments.^25,26

Advisor angle: Some sponsors may conclude an out-of-plan emergency savings benefit fits better for their audience. Either way, advisors can add value by helping them reach a deliberate, evidence-based decision. (RPAG Premium Marketing members: want to provide your clients and prospects with valuable information on this topic? You now have the tools to host a related webinar. Alongside our friends at Voya, we’ve built everything you need, and it’s available in the Resource Center at Content Marketing Plan > Webinar Kits > March.)

Use the checklist for your next sponsor conversation

Each of these themes can be a reason to get in front of a client or prospect before the next committee cycle.

Download the full “Are You Ready for 2026?” checklist today.