Under the SECURE 2.0 Act, many new rules were enacted that impact retirement and benefit plans — with many of these going into effect in 2026. For employers and plan sponsors, now could be a good time to review your current employee benefit plans (EBPs) to ensure that you're operating in compliance well before the end of the year. Otherwise, you could face hefty fines, penalties and other legal issues.
So, what's changed with EBPs in 2026, and what might these changes mean for employers?
For starters, the SECURE 2.0 Act has resulted in updates to IRC Section 415(c) regarding annual additions limits. Specifically, these refer to any elective deferrals, employer matching, profit-sharing contributions and after-tax employee contributions. For 2026 specifically, the annual limit for these has been adjusted to $72,000 or 100% of the plan participant's compensation (whichever is lower).
In addition to updated annual additions limits, changes under the SECURE 2.0 Act have also resulted in adjustments to the annual contribution limit for employees participating in an EBP. For 2026, this limit has increased to $24,500 for most types of plans — including 401(k) and 403(b) options. That's a $1,000 increase compared to 2025.
2026 has also seen changes to the maximum amount plan participants can make for so-called “catch-up contributions,” or tax-advantaged contributions made by individuals age 50 and older. Under the SECURE 2.0 Act, the annual catch-up contribution limit has increased from $7,500 to $8,000 in 2026 — and plan participants who are aged 60-63 may even be eligible to make “super catch-up contributions” of up to $11,250. These expanded allowances are designed to make it easier for people to save for retirement, even if they didn't start saving until later in life.
The above limits for catch-up contributions largely apply to traditional EBPs, including 401(k) and 403(b) plans. What about those with IRAs? Under the SECURE 2.0 Act, additional changes have also gone into effect. For example, the annual IRA contribution limit has increased from $7,000 in 2025 to $7,500 in 2026 — whereas catch-up contribution limits for these types of plans have also been adjusted to account for inflation. More specifically, these limits have been increased from $1,000 to $1,100 in 2026.
More changes to catch-up contributions? Effective January 1, 2026, plan sponsors should also be aware that these contributions made by employees age 50 and older will be automatically designated as after-tax contributions — assuming that the employee's previous year's wages exceeded $150,000. Plan sponsors and participating employees should be aware that this rule applies to 401(k), 403(b) and governmental 457(b) plans specifically. Participants with SEP IRAs or SIMPLE IRAs make pretax contributions.
According to an IRS Notice, all EBPs must be in compliance with the latest rules and requirements no later than December 31, 2026. This means that plan sponsors should begin acting now to avoid potential problems down the road. It's also worth noting that this deadline applies to all EBPs, regardless of whether a sponsor's plans run on a calendar-year or fiscal-year basis.
Likewise, the December 31 deadline reflects the time at which sponsors should have their paperwork updated for EBPs. In reality, employers should already be operating under the new rules and regulations. Because this may require extensive payroll and system updates, it's better to be proactive about these changes sooner rather than wait until the last minute.
Why have these changes gone into effect? Ultimately, changes under the SECURE 2.0 Act aim to allow employees to save more money for their retirement. This is especially true for older employees who may not have started retirement funds until later in life and are trying to catch up. At the same time, these changes result in stricter tax treatment for higher earners and call on plan sponsors to update their systems/procedures for regulatory compliance.
No matter which type of plan(s) you offer your place of employment, now is the time to review your policies and procedures to ensure you're prepared for the December 31 deadline. With the right plan and paperwork updates, your team can ensure compliance while navigating plan updates with confidence.