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ERISA Regulatory & Legislative Trends

What Plan Sponsors Need to Know Right Now

Nate Moody, CPFA  |  Senior Financial Advisor & Partner  |  Q1 2026

If you serve on a retirement plan committee, the first quarter of 2026 might feel like drinking from a firehose. SECURE 2.0 provisions are going live. Congress is advancing a pipeline of bipartisan retirement bills. The White House has weighed in on everything from alternative investments in 401(k) plans to child savings accounts. And closer to home, Maine just gave employers new tools to audit their health plan claims.

This article is a plain-English guide to the regulatory and legislative changes that matter most for plan sponsors and ERISA fiduciaries right now. We cover what is already in effect, what is coming, and what to keep an eye on.

SECURE 2.0: What Is Live in 2026

The SECURE 2.0 Act was signed into law in December 2022, but many of its provisions have staggered effective dates. Several significant changes became operational in January 2026.¹

Mandatory Roth Catch-Up Contributions for Higher Earners

Starting January 1, 2026, participants age 50 and older who earned more than $150,000 in FICA wages from the employer during 2025 must make their catch-up contributions on a Roth (after-tax) basis. The threshold was originally set at $145,000 and has been indexed for inflation.²

The IRS issued final regulations in September 2025 establishing a good-faith compliance transition period throughout 2026, with strict compliance required for plan years beginning after December 31, 2026. Plans that do not offer a Roth contribution option will be unable to accept catch-up contributions from affected high earners unless a Roth feature is added.³

What to do: Confirm that your payroll and recordkeeping systems are properly routing affected catch-up contributions to Roth accounts. If your plan does not currently offer Roth contributions, discuss adding this feature with your advisor and recordkeeper.

Updated Contribution Limits for 2026

The IRS announced the following limits for the 2026 plan year:⁴

Limit Type	2026 Amount
401(k) Elective Deferral (under 50)	$24,500
Catch-Up Contribution (age 50+)	$8,000
Super Catch-Up (ages 60–63)	$11,250
Maximum Possible Deferral (ages 60–63)	$35,750
Annual Additions Limit (Section 415)	$72,000
Annual Compensation Limit (Section 401(a)(17))	$360,000
Highly Compensated Employee Threshold	$160,000 (unchanged)
Roth Catch-Up FICA Wage Threshold	$150,000
IRA Contribution Limit	$7,500
IRA Catch-Up (age 50+)	$1,100

Super Catch-Up Contributions for Ages 60 Through 63

Participants who turn 60, 61, 62, or 63 during the calendar year may now defer up to $11,250 in catch-up contributions, rather than the standard $8,000. Combined with the base $24,500 limit, their total possible deferral is $35,750. Plans should confirm that their recordkeeper can accommodate this feature and that plan documents will be amended by the December 31, 2026 deadline.

Long-Term Part-Time Employee Eligibility

Employees who work at least 500 hours per year for two consecutive 12-month periods and have reached age 21 must now be allowed to participate in the employer’s 401(k) plan. The first group of employees qualifying under this rule could be entering your plan in 2026 or 2027, depending on when hours tracking began. Employers should confirm that their HR systems are identifying these employees as they approach the eligibility threshold.

Other SECURE 2.0 Provisions Now in Effect

• Roth Employer Contributions: Plans may allow participants to elect Roth treatment for employer matching and nonelective contributions.
• Student Loan Matching: Employers can treat qualified student loan payments as elective deferrals for matching purposes (effective since 2024).
• Emergency Savings Accounts: Plans may offer pension-linked emergency savings accounts (PLESAs) for non-highly compensated employees, with the 2026 contribution cap at $2,600.
• Automatic Enrollment for New Plans: Plans established after December 29, 2022 must auto-enroll eligible employees at 3–10%, with annual 1% escalation.
• Small Account Cash-Out Increase: The involuntary cash-out limit increased from $5,000 to $7,000.

Plan Amendment Deadline: December 31, 2026

Executive Action: Alternative Investments in 401(k) Plans

On August 7, 2025, President Trump signed Executive Order 14330, titled “Democratizing Access to Alternative Assets for 401(k) Investors.” The order directs the Department of Labor, in coordination with the SEC and Treasury, to reduce regulatory barriers that have historically limited defined contribution plans to public market investments.⁶

The order covers a broad definition of alternative assets, including private equity, private credit, real estate, digital assets, infrastructure, commodities, and longevity risk-pooling products. The DOL moved quickly: within days, it rescinded a 2021 statement that had discouraged fiduciaries from evaluating private equity, and it had previously (May 2025) rescinded guidance urging “extreme care” before offering cryptocurrency options.⁷

What this means for plan sponsors: The executive order does not change the law. ERISA’s fiduciary standards of prudence and loyalty still apply to every investment decision. What the order does is remove regulatory headwinds. For most plans, this is a “watch and prepare” item. Additional DOL guidance is expected throughout 2026. If alternative investment options become more accessible, the committee’s fiduciary process for evaluating them will be critical.  These investments may involve additional risks, including limited liquidity, valuation complexity, higher fees, and increased volatility.

The One Big Beautiful Bill Act: Employee Benefit Changes

The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, includes several employee benefit provisions that affect the broader benefits landscape plan sponsors manage alongside their retirement plans.⁸

Dependent Care FSA Limit Increase

For the first time since 1986, Congress raised the dependent care FSA contribution limit. Effective January 1, 2026, the annual pre-tax limit increases from $5,000 to $7,500 per household ($3,750 for married individuals filing separately). This is a permanent change but is not indexed for inflation.⁹

Employers offering dependent care FSAs should ensure plan documents are amended and open enrollment communications are updated. One consideration: dependent care FSAs are subject to nondiscrimination testing, and the higher limit may make compliance more challenging if highly compensated employees disproportionately use the benefit.

Student Loan Repayment Benefits Made Permanent

The OBBBA permanently extends the tax-free treatment of employer-provided student loan repayment assistance under IRC Section 127. Previously set to expire December 31, 2025, the provision now allows employers to make up to $5,250 per year in tax-free payments toward employee student loans on an ongoing basis. The $5,250 annual limit will also be indexed for inflation beginning after 2026.¹⁰

This pairs well with the SECURE 2.0 student loan matching feature. Together, an employer could both directly reimburse student loan payments (up to $5,250 tax-free under Section 127) and match those payments in the retirement plan (under SECURE 2.0). For employers competing for younger talent, the combination is a meaningful recruiting and retention tool.

HSA Eligibility and Telehealth

The OBBBA permanently allows high-deductible health plans to cover telehealth services before the deductible is met without disqualifying participants from HSA contributions. This relief, which had been temporarily allowed during COVID-19, is retroactive to plan years beginning after December 31, 2024. Starting January 1, 2026, HSA-eligible individuals may also participate in direct primary care arrangements (up to $150/month individual, $300/month family) without losing eligibility, and all Bronze and Catastrophic ACA plans now automatically qualify as HSA-eligible HDHPs.¹¹

Trump Accounts: A New Potential Workplace Benefit

One of the most novel provisions of the OBBBA is the creation of “Trump Accounts” under new IRC Section 530A. These are tax-advantaged savings accounts for children under 18 that function like traditional IRAs with special rules during a growth period.¹²

Key features:

• Aggregate annual contributions capped at $5,000 per child (indexed for inflation after 2027), aggregated across all sources
• A one-time $1,000 federal contribution for children born between 2025 and 2028 (does not count toward the $5,000 limit)
• During the growth period (until age 18), funds must be invested in broad-based U.S. equity index funds with annual fees capped at 0.1%
• No contributions permitted before July 4, 2026
• Parents or guardians manage the account; it can be opened via IRS Form 4547 or trumpaccounts.gov

Other OBBBA Provisions of Note

• Employer Childcare Tax Credit Enhanced: The credit under IRC Section 45F increases to 40% of qualified expenditures (50% for small businesses), with the annual cap rising to $500,000 ($600,000 for small businesses).
• Paid Family and Medical Leave Credit: The employer credit under IRC Section 45S is now permanent.
• Bicycle Commuting Exclusion Eliminated: The tax exclusion for employer-provided bicycle commuting reimbursements is permanently eliminated effective January 1, 2026.

Pending Legislation in Congress

Several bills are working through the 119th Congress with bipartisan support. While none have been signed into law, many could be packaged into a larger omnibus bill or form the basis of a future SECURE 3.0.

ESOP Legislation Gaining Momentum

Employee stock ownership plans have strong bipartisan support, led by Senate HELP Committee Chairman Bill Cassidy (R‑LA).

• Retire Through Ownership Act: Passed the full Senate unanimously in October 2025. The House companion (H.R. 5169) was reported out of the Education & Workforce Committee in September 2025. Would create safe harbor protections for ESOP fiduciaries who use independent appraisers following IRS Revenue Ruling 59–60.¹⁴
• Employee Ownership Representation Act: Also passed the Senate unanimously. Would add ESOP-focused members to the ERISA Advisory Council and create an Advocate for Employee Ownership at the DOL.¹⁵
• Employee Ownership Fairness Act (S. 1727): Would separate ESOP allocations from defined contribution plan limits under IRC Sections 404 and 415, allowing ESOP participants to fully benefit from ownership allocations while still maximizing 401(k) savings.¹⁶
• ESOP Valuation Guidance: The DOL’s Spring 2025 Unified Regulatory Agenda confirmed a formal rulemaking on adequate consideration guidance for ESOP stock valuations, with a public comment period expected.

Broader 401(k) and Retirement Bills

• Retirement Rollover Flexibility Act (H.R. 6450 / S. 3352): Reintroduced December 2025 with bipartisan support. Would allow rollovers from Roth IRAs into designated Roth accounts within employer-sponsored plans. Currently, Roth IRA money cannot be moved into a workplace Roth 401(k), 403(b), or 457(b), even though both account types are funded with after-tax dollars. With 95% of plans now offering Roth 401(k) contributions and state auto-IRA programs expanding rapidly, this fix addresses a growing portability gap. Endorsed by the American Retirement Association.¹⁷
• Helping Young Americans Save for Retirement Act (S. 1707 / H.R. 4718): Would lower the minimum ERISA participation age from 21 to 18 for defined contribution plans. Includes a five-year audit delay for plans that add participants ages 18–20.¹⁸
• Small Nonprofit Retirement Security Act: Would provide payroll tax credits for small nonprofits (100 or fewer employees) that start a 401(k), since existing income tax credits have no value for tax-exempt organizations.¹⁹
• Retirement Savings for Americans Act (H.R. 2696 / S. 1526): Would create a portable retirement savings vehicle for workers without access to an employer-sponsored plan. President Trump highlighted the concept during his 2026 State of the Union address.²⁰
• Protecting Americans’ Retirement Savings Act (S. 928): Would restrict retirement plan investments in securities tied to certain foreign adversary entities.
• PLESA Enhancement: Would increase the emergency savings account maximum from $2,500 to $5,000 and allow HCE participation.

Closer to Home: Maine’s New Claims Audit Law

Maine employers who sponsor self-insured group health plans should be aware of a significant new state law that took effect in 2026. The Act to Improve Accountability and Understanding of Data in Insurance Transactions (the “Audit Act”), signed by the Governor on July 1, 2025, prohibits Maine-licensed third party administrators (TPAs) and pharmacy benefit managers (PBMs) from restricting an employer’s ability to access the data necessary to complete a full audit of claims.²¹

Under the law, codified at 24‑A MRSA Section 1914 (TPAs) and Section 4349‑A (PBMs):

• TPAs must permit employers to perform a post-payment audit of all claims at least once per calendar year
• TPAs and PBMs may not use unduly restrictive confidentiality provisions to block audit access
• Employers may conduct pre-payment audits of high-cost medical claims
• Employers may collect information about amounts paid by PBMs to pharmacies on the plan’s behalf

The Act applies to service agreements entered into, amended, or renewed on or after January 1, 2026. It follows similar legislation in Indiana and joins a broader wave of state laws targeting PBM and TPA transparency nationwide.

This matters because few employers have historically been able to verify whether their health plan spend is being billed and paid correctly. Restrictive audit clauses in TPA and PBM contracts have made it difficult to identify erroneous payments or evaluate contract compliance. The Maine Audit Act changes that equation and gives employers real leverage when negotiating or renewing service agreements.

What to do: If you sponsor a self-insured health plan in Maine and are renewing or entering into TPA or PBM agreements, ensure that your contracts reflect the new audit rights. Consider adding claims auditing to your 2026 or 2027 plan oversight strategy.

Status at a Glance

Item	Status
Roth Catch-Up for High Earners	In Effect
Super Catch-Up (Ages 60–63)	In Effect
Long-Term Part-Time Eligibility	In Effect
Dependent Care FSA Increase ($7,500)	In Effect (OBBBA)
Section 127 Student Loan (Permanent)	In Effect (OBBBA)
HSA Telehealth Permanent Fix	In Effect (OBBBA)
Maine Claims Audit Act	In Effect (State Law)
Plan Amendment Deadline	Due 12/31/2026
Trump Account Contributions	Begin July 4, 2026
Alt. Investments (EO 14330)	DOL Guidance Expected
Retire Through Ownership Act	Passed Senate; Pending House
Retirement Rollover Flexibility Act	Introduced; Bipartisan
Helping Young Americans Save Act	Introduced; Bipartisan
Small Nonprofit Retirement Security	Introduced; Bipartisan
Retirement Savings for Americans Act	Introduced; Bipartisan

The Bottom Line

The regulatory and legislative environment for retirement plans is more active than it has been in years. The action items for your committee are straightforward:

1. Confirm your plan amendment timeline with your recordkeeper and document provider for the December 31, 2026 deadline.
2. Verify Roth catch-up implementation is working correctly for participants above the $150,000 FICA wage threshold.
3. Communicate new limits and features to participants, especially super catch-up opportunities for ages 60–63.
4. Review part-time employee tracking to ensure eligibility systems are identifying employees approaching the 500-hour, two-year threshold.
5. Review your broader benefits package in light of the OBBBA changes to dependent care FSAs, student loan repayment, and HSA eligibility.
6. Monitor pending legislation and alternative investment guidance. No immediate action is needed, but these developments may require committee attention later in 2026.

Staying ahead of these changes is a core part of what we do at Lebel & Harriman. If you have questions about how any of these items apply to your specific plan, or if you want to discuss whether any discretionary SECURE 2.0 features make sense for your workforce, we’re happy to help.

This article is provided for informational and educational purposes only and should not be construed as legal, tax, or investment advice. The information is based on publicly available sources believed to be reliable as of March 2026, but accuracy and completeness are not guaranteed. Legislative summaries reflect bills as introduced or passed through one chamber and are subject to change through the legislative process. Executive orders and proposed regulations may be modified, withdrawn, or superseded. Readers should consult with qualified legal counsel, tax advisors, or plan consultants before making decisions based on this information. This article does not constitute a recommendation to buy or sell any security or to adopt any particular investment strategy. References to specific legislation, regulations, or policy proposals are for educational context and do not represent an endorsement or prediction of outcomes.

Securities offered through Valmark Securities, Inc. Member FINRA/SIPC. Advisory services offered through Valmark Advisers, Inc., a SEC-registered investment advisor. Lebel & Harriman Retirement Advisors is a separately owned entity from Valmark Securities, Inc. and Valmark Advisers, Inc.