Why 2026 matters
The year 2026 marks a critical compliance milestone for most defined contribution plan sponsors. After several years of legislative change and extended IRS relief, many retirement plan amendments tied to the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act), the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), and the SECURE 2.0 Act of 2022 (SECURE 2.0) must finally be formalized in written plan documents. While many employers have already implemented required provisions operationally, 2026 is when documentation must catch up with practice.
Since 2019, Congress has passed multiple laws significantly reshaping retirement plans. Recognizing the complexity and volume of changes, the IRS provided extended amendment deadlines, allowing employers to operate plans in “good faith compliance” before formal amendments were required. That transition period is now ending.
Key amendment deadlines
| December 31, 2026 | December 31, 2028 | December 31, 2029 |
|---|---|---|
|
Collectively bargained plans (i.e., union plans) | Most governmental 457(b) plans |
The original SECURE Act introduced foundational changes to retirement plans, many of which have been in effect for several years. Some key provisions requiring documentation updates include:
- Required minimum distribution (RMD) age increase: Raised the starting RMD age to 72 for those who attained age 70½ after December 31, 2019. For information on additional changes to the RMD age, see the SECURE 2.0 section below.
- Long-term part-time worker eligibility: Allows long-term part-time employees to make elective deferrals after completing 500 hours of service in three consecutive years (reduced to two consecutive years under SECURE 2.0). Additionally, long-term part-time employees must be credited with a year of vesting service for each 12-month period during which the employee works 500 hours.
- RMD life expectancy payments limited to certain beneficiaries (i.e., “Stretch Rule”): For participants who died on or after January 1, 2020, the use of Life Expectancy (LE) calculations is limited to Eligible Designated Beneficiaries (i.e., spouse, minor children, or a disabled or chronically ill individual not more than 10 years younger than the participant). For all other designated beneficiaries, a full distribution must occur by the end of the 10th year following the participant’s death (i.e., 10-year distribution rule).
- Qualified birth and adoption withdrawal (QBAD): Allows participants to withdraw up to $5,000 for each child in the year following the birth or adoption of a child without being subject to 20% withholding and without incurring a 10% early withdrawal penalty. Repayment of the distribution must also be available.
The CARES Act, enacted in response to the COVID-19 pandemic, introduced temporary but impactful retirement plan relief, including:
- Coronavirus-related distribution (CRD): Allowed a distribution from a qualified plan to "affected individuals" of up to $100,000. CRDs are not subject to the 10% early withdrawal penalty and are not subject to 20% mandatory withholding. Taxation of the CRD may be spread over three years. CRDs may also be repaid within three years from the date of distribution.
- Expanded loan limits and repayment flexibility: From March 27, 2020, until September 22, 2020, affected individuals were able to take plan loans of up to the lesser of $100,000 or 100% of their vested plan account balance. An affected individual with an existing loan could extend the end of the loan term for one year and temporarily suspend the loan repayments scheduled to occur between March 27, 2020, and December 31, 2020.
- Temporary suspension of RMDs in 2020: RMDs for the 2020 distribution year were waived for all defined contribution plans [401(k), 403(b), governmental 457(b)]. The waiver applied to participants and beneficiaries already receiving RMDs as well as those required to take their first RMD for 2019 by April 1, 2020.
For beneficiaries required to take RMDs under the five-year rule, 2020 was not counted as part of the five-year period.
Notes:
Even though these provisions were time limited, plans that adopted them must formally amend their documents to reflect what occurred. IRS guidance confirms that CARES Act amendments are bundled into the same December 31, 2026, deadline for most employer sponsored plans.
The SECURE 2.0 Act introduced nearly 90 retirement-related provisions (some required, some optional), making it the most sweeping retirement legislation in more than a decade. While many provisions became effective between 2023 and 2025, the IRS allowed employers to delay formal amendments.
Some notable SECURE 2.0 provisions that will require amendments by the end of 2026 include:
Required provisions
- Required minimum distribution (RMD) age increase: Raised the starting RMD age from 72 to 73. The age will be increased again to 75 in 2033.
- Long-term part-time worker eligibility (LTPT): The SECURE Act mandated that long-term part-time employees who work at least 500 hours in each of three consecutive years must be eligible to make elective deferrals to their employer’s 401(k) retirement savings plan. Effective January 1, 2025, SECURE 2.0 reduced that period from three consecutive years to two and expanded the requirement to include 403(b) plans.
- Roth catch-up contributions: Effective January 1, 2026, participants ages 50 and older who earned more than $150,000 in FICA wages* in the previous calendar year (Roth catch-up required participants) may only make catch-up contributions as Roth contributions.
- Mandatory automatic enrollment for new plans: Employers with more than 10 employees and who have been in business for three or more years must implement an automatic enrollment provision for a new 401(k) or 403(b) plan established on or after December 29, 2022. Existing plans are grandfathered and are not required to offer automatic enrollment. Please note, a plan amendment may not be required for this provision.
Optional provisions
Note: If a plan sponsor adopted any of these provisions, a plan amendment is required.
- Higher catch-up contribution limit: Allows plan sponsors to increase the catch-up contribution limit for participants ages 60 to 63 to $11,250.
- Qualified Disaster Recovery Distribution (QDRD): Allows a participant to take a distribution of up to $22,000 (per disaster) if impacted by a federally declared disaster occurring on or after January 26, 2021.
- Emergency expense withdrawals (EEW): This optional provision gives employees the ability to take an emergency distribution of up to $1,000 for personal or family emergency expenses without being subject to the 10% early withdrawal penalty. Limitations on the frequency of emergency expense withdrawals apply and are based on repayment of the withdrawal.
- Withdrawals for domestic abuse (WDA): Under this optional provision, plan sponsors may elect to allow a withdrawal for domestic abuse survivors of either $10,500 or 50% of the participant’s vested account balance (whichever is less) without being subject to the 10% early withdrawal penalty. The survivor also has the option to repay the distribution within three years.
- Self-certification for hardship withdrawals: This optional provision modifies current hardship rules to allow plans to permit participants to self-certify that a distribution meets the requirements for a hardship withdrawal and no longer requires a participant to provide documentation supporting the need or amount of a hardship withdrawal.
- Automatic cash-out limit increase: Raises the statutory limit at which plan sponsors can automatically distribute former employees’ vested account balances without additional participant consent. This increase to $7,000 can help plan sponsors ease the administrative effort associated with small-balance accounts and unclaimed participant assets.
- Matching contributions for student loans: This provision allows plan sponsors to make matching contributions on qualified student loan payments without requiring employees to make elective deferrals. For purposes of calculating the employer match, those qualified student loan payments are treated just like plan deferrals and are matched based on the plan’s traditional match formula.
- Autoportability service: Allows small account cash-outs to be rolled over to an IRA at Retirement Clearinghouse (RCH). Portability Services Network will try to locate the account holder’s new employer sponsored plan and will then rollover the RCH IRA to the new employer’s plan.
For a comprehensive overview of SECURE 2.0 provisions, refer to Vanguard’s resource, A guide to SECURE 2.0.
Plan sponsor best practices
- Inventory which SECURE Act, CARES Act, and SECURE 2.0 provisions require amendments including any optional provisions that were adopted.
- Engage with your counsel to confirm operational compliance to avoid risks and review intended plan design.
- Partner with your recordkeeper or document provider in 2026 to ensure proper amendment coordination.
- Ensure amendments are completed by the required deadline based on your plan type.