End-of-the-Year Compliance Checklist for Employee Benefit Plan Sponsors

As 2025 draws to a close, we bring you our annual end-of-the-year “to do list” for employee benefit plan sponsors. This year-end checklist highlights key action items and updates to help you prepare for 2026 and beyond.

SECURE 2.0: Key Provisions. The SECURE 2.0 Act of 2022 introduced a wide range of changes to retirement plan rules, some of which became effective immediately upon enactment in December 2022, while others have staggered effective dates.

Although formal amendments for mandatory changes under both the original SECURE Act and SECURE 2.0 are not required until December 31, 2026 (per IRS Notice 2024-2), plan sponsors should aim to adopt amendments by the end of 2025 for any discretionary changes that were implemented operationally during the year. Timely amendment helps ensure that plan documents accurately reflect how the plan is administered.

Here is a list of some of the key SECURE 2.0 provisions that became effective this year, or that become effective beginning in 2026:

• Mandatory Roth Catch-Up Requirement: SECURE 2.0 requires participants whose FICA wages exceeded $145,000 in the preceding calendar year (adjusted annually for inflation) to make catch-up contributions on a Roth basis. This provision is effective January 1, 2026, for most plans, with a delayed effective date for multiemployer plans and governmental plans.
  • TO DO: Prepare for mandatory Roth treatment of catch-up contributions for employees earning over $145,000 and communicate the change to affected participants well in advance of the 2026 plan year.
• Controlled Group Catch-Up Limit: Under proposed regulations, if any employer within a controlled group adopts the increased catch-up limit for participants aged 60 to 63, all employers in the group must apply the same limit, even if they maintain separate plans. This is known as the “universal applicability rule.”
  • TO DO: Confirm whether any employer in your controlled group has adopted the increased catch-up limit, and if so, ensure consistent application across all plans within the group.
• Long-Term Part-Time Employees. The SECURE Act required “long-term, part-time” employees to be eligible to make elective deferral contributions to a 401(k) plan. Beginning January 1, 2025, SECURE 2.0 expands the definition of “long-term, part-time” employees to include employees who have provided at least 500 hours of service in a plan year for two consecutive years (instead of three) to be eligible to make elective deferral contributions. It also requires elective deferral eligibility for long-term, part-time employees in 403(b) plans beginning January 1, 2025. For more information on long-term, part-time employees, click here.
  • TO DO: Track the hours of part-time employees to determine whether any are considered “long-term” under both the SECURE Act’s definition and SECURE 2.0’s definition. Any long-term, part-time employees under the SECURE Act’s definition must have been eligible to participate in the plan’s elective deferral feature effective January 1, 2024. Those meeting SECURE 2.0’s definition must be eligible beginning January 1, 2025.

Amendments for Non-Governmental 457(b) Plans. While the SECURE and SECURE 2.0 amendment deadline was extended for most retirement plans, the IRS did not extend the deadline for non-governmental 457(b) plans. As such, non-governmental 457(b) plans must adopt amendments to incorporate changes from the SECURE and SECURE 2.0 Acts by December 31, 2025.

• TO DO: Amend 457(b) plans to ensure compliance with SECURE and SECURE 2.0 prior to 12/31/2025.

Student Loan Reimbursements. The One Big Beautiful Bill Act (“OBBBA”) made permanent the ability for employers to provide up to $5,250 annually in tax-free student loan repayment assistance under §127 of the Internal Revenue Code (the “Code”).

• TO DO: Review existing educational assistance programs and consider amending plan documents to explicitly include student loan repayment as a covered benefit.

Establish Fiduciary Committees for Health and Welfare Plans. With increasing litigation and regulatory scrutiny, fiduciary oversight of health and welfare plans is more important than ever. Committees should document oversight of service providers (i.e., review service provider contracts annually), especially Pharmacy Benefit Managers, conduct regular fiduciary compliance reviews, and maintain committee meeting minutes.

• TO DO: Consider forming a dedicated fiduciary committee or expanding an existing retirement committee’s scope.

401(k) Forfeitures: Use It or Lose It. As a reminder, all plan forfeitures must be used or allocated within 12 months of the plan year in which they arise. The plan document should specify how and when the plan will exhaust its forfeitures.

• TO DO: Review forfeiture balances and usage policies and amend plan documents to clarify the priority of forfeiture allocations (e.g., offsetting contributions, reducing plan expenses).

ERISA Litigation Trends. ERISA-related litigation continues to be active, with recent trends showing heightened scrutiny of fiduciary practices. Key areas of focus include plan fees, investment selection process, and the use of forfeitures. Additionally, there is growing litigation in the area of cybersecurity and oversight of Pharmacy Benefit Managers within health plans.

• TO DO: Review 2026 fees and investment selections carefully and document decision-making, when possible.
• TO DO: Consider participating in updated fiduciary training to remain aligned with evolving best practices and regulatory expectations.
• TO DO: Review and update cybersecurity policies, implementing safeguards tailored to the sensitive data and assets held in all ERISA-covered plans, including both retirement and health and welfare benefit plans.

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As fiduciaries, staying ahead of regulatory changes and litigation trends is essential. Use this checklist to guide your year-end compliance efforts and consult with legal counsel to ensure your plans are up-to-date and defensible.