End-of-Year Compliance To-Do List for Employee Benefit Plan Sponsors

Another year has come and is nearly gone. As we come to a close on 2026, we bring you Baird Holm’s annual end-of-year “to do list” for employee benefit plan sponsors. This year’s checklist focuses on retirement plan amendment deadlines, fiduciary oversight, and new correction and ESOP valuation developments, together with practical steps to prepare for 2027.

SECURE Act, CARES Act, and SECURE 2.0 Amendment Deadlines

We’ve been writing about the approaching amendment deadline for the SECURE Act, CARES Act, and SECURE 2.0 changes relevant to retirement plans for years now…(for example, view our 2025 Year-End Checklist article here). But recent IRS guidance clarifies that December 31, 2026 is actually not a blanket amendment deadline. Instead, the deadline depends on whether the amendment is required or discretionary:

Required amendments. For changes affecting plan qualification, amendments are due by the last day of the second calendar year after issuance of the IRS Required Amendments List on which the change appears. Provisions needing additional guidance will not be listed on the Required Amendments List until final regulations are published by the IRS and actually become effective. 

Of course, as we have noted, the extended amendment deadlines do not postpone operational compliance: employers must administer their plans now in good faith compliance with the required changes under the Acts.

Discretionary amendments. Amendments implementing optional features of the SECURE Act, CARES Act, or SECURE 2.0 generally remain due December 31, 2026 (or December 31, 2029, for governmental plans).

• TO DO: Review your amendment package with your document provider and ERISA counsel, identify mandatory changes and optional features already implemented, and confirm the applicable adoption deadlines. Begin the review promptly to allow time for adoption of amendments due December 31, 2026.
• TO DO: Ensure the draft amendments reflect your plan’s actual operations, including applicable implementation dates. Before electing new optional features, confirm that payroll and recordkeeper systems can administer them.

ERISA Litigation Trends

ERISA litigation continues to scrutinize plan fees, investment selection and monitoring, forfeitures, cybersecurity, and pharmacy benefit manager oversight. A documented fiduciary process remains central to managing these risks.

• TO DO: Review fees, investments, and service-provider arrangements for 2027, and document the basis for fiduciary decisions.
• TO DO: Review 401(k) forfeiture balances, applicable use deadlines, and plan provisions governing forfeiture allocations. Confirm that actual practices follow plan terms, and document the basis for allocation decisions.
• TO DO: Consider establishing a health and welfare fiduciary committee or expanding an existing committee’s scope. Review vendor contracts, particularly pharmacy benefit manager arrangements, and maintain meeting minutes.
• TO DO: Refresh fiduciary training and cybersecurity safeguards for retirement and health and welfare plans, including vendor oversight and access controls.

Retirement Plan and IRA Corrections

Revenue Procedure 2026-34 updates the Employee Plans Compliance Resolution System (EPCRS), generally effective October 22, 2026, incorporating SECURE 2.0 changes and expanding self-correction for eligible inadvertent failures. Eligibility conditions, compliance procedures, and examination restrictions still matter; and the extended time to correct is not permission to leave known errors unresolved.

Separately, Revenue Procedure 2026-33 establishes the IRA Compliance Resolution System (ICRS), effective May 1, 2027, allowing IRA custodians and owners to request correction of certain eligible inadvertent failures caused by service-provider errors.

• TO DO: Review unresolved plan failures with your plan administrator and ERISA counsel, including operational errors and potential employer eligibility and plan document failures. Confirm self-correction eligibility, the available and appropriate correction method, and all applicable deadlines.
• TO DO: Document when plan failures were identified, the corrective steps taken, and any specific commitment to self-correct before an IRS examination.
• TO DO, IF APPLICABLE: Coordinate IRA correction issues with the IRA owner and custodian. Confirm available procedures and prepare for the ICRS effective date.

ESOP Valuation

The Retire Through Ownership Act (the “Act”), signed October 15, 2026 and effective immediately, amends Section 3(18) of ERISA to recognize ESOP fiduciaries’ good-faith reliance on valuations prepared by independent valuation experts or business appraisers using the principles of IRS Revenue Ruling 59-60. The Act addresses the determination of fair market value for purposes of the adequate consideration requirement for closely held employer stock.

• TO DO: Review your appraiser’s independence, valuation methodology, and material assumptions. Document the fiduciaries’ basis for relying on the appraisal and consult ESOP counsel about upcoming transactions.

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Use this checklist to guide your year-end review, assign responsibility for outstanding items, and establish completion deadlines. Consult benefits counsel about requirements specific to your plans.