Fiduciary Best Practices - with more advanced topics with 401k Plan Professionals advisor, Jenna Witherbee

Fiduciary Pressures in 2026

Fiduciaries of 401(k) plans—typically employers and their appointed committees—operate under ERISA's stringent standards, requiring them to act prudently and solely in participants' interests. In 2026, this duty faces intensified pressure from overlapping regulatory shifts and evolving risks.

SECURE 2.0 Act provisions, phased in over recent years, reach several critical milestones. The mandate for Roth catch-up contributions for high earners begins January 1, 2026; plans without Roth options must implement them or exclude eligible participants from the higher limits (up to $8,000 catch-up in 2026, plus special higher amounts for ages 60-63). Plan amendments to comply with broader SECURE and SECURE 2.0 changes must be adopted by December 31, 2026, creating a hard deadline for sponsors to update documents, notices, and administrative processes.

An executive order issued in August 2025 directs regulators to ease barriers to alternative investments—such as private equity or real estate—in defined contribution plans. While this could diversify options and potentially boost returns, it introduces complex fiduciary considerations: evaluating illiquidity, valuation challenges, higher fees, and transparency. Sponsors must document rigorous due diligence or risk breaching prudence standards, especially amid anticipated DOL or SEC guidance in 2026.

Broader trends compound these demands. Litigation over plan fees, revenue-sharing practices, and forfeitures remains active, with courts emphasizing process over outcomes. Cybersecurity threats and DOL audit readiness add layers of responsibility, as inadequate documentation or oversight can lead to personal liability for fiduciaries. The stakes include Department of Labor penalties, participant lawsuits seeking restitution, and reputational damage—consequences that have already hit companies in recent years.

Tensions arise between cost control and enhanced protections: adding Roth features or alternative investments may raise administrative burdens or fees, yet inaction invites greater risks. Smaller sponsors, in particular, grapple with limited resources against these requirements, sometimes turning to pooled employer plans to shift some fiduciary load.