As we approach the new year, employers have an important opportunity to review and optimize their 401(k) plans. Maximizing retirement benefits not only helps employees save for the future but also enhances recruitment, retention, and overall satisfaction.

This guide outlines key strategies for employers to prepare their plans for 2026, ensuring compliance, efficiency, and maximum value for employees.

Review Your 401(k) Plan Design

Evaluate Employer Matching and Contributions

Employer matching and profit-sharing can significantly impact employees’ retirement savings. Consider:

  • Adjusting matching formulas to encourage participation

  • Offering profit-sharing contributions for high-performing employees

  • Reviewing contribution limits and ensuring employees are aware of them

A thoughtful approach to plan design can maximize employee savings and engagement.

Assess Eligibility Rules

Review eligibility requirements to ensure they align with business goals and regulatory standards:

  • Minimum service periods for participation

  • Age requirements

  • Vesting schedules

Clear, well-structured eligibility rules can improve participation and satisfaction.

Conduct Investment and Fee Reviews

Evaluate Fund Performance

Top providers recommend regularly reviewing investment options:

  • Compare fund returns to benchmarks

  • Monitor risk-adjusted performance

  • Ensure target-date and diversified funds meet employees’ needs

Optimizing the investment lineup helps employees achieve long-term retirement goals.

Review Administrative and Investment Fees

High fees can erode retirement savings over time. Q4 is the perfect time to:

  • Examine recordkeeping and administrative costs

  • Review investment management expenses

  • Consider cost-effective alternatives without sacrificing quality

Keeping fees competitive benefits both employees and fiduciaries.

Focus on Employee Education and Engagement

Communicate Contribution Limits and Deadlines

Ensure employees understand:

  • Maximum 401(k) deferral amounts for 2026

  • Catch-up contributions for employees over 50

  • Year-end contribution strategies

Clear communication encourages participation and helps employees make informed choices.

Provide Resources for Investment Decisions

Offering educational tools, workshops, and personalized counseling allows employees to:

  • Understand available funds

  • Evaluate risk and diversification

  • Make confident retirement decisions

Engaged employees are more likely to take full advantage of their benefits.

Ensure Compliance and Fiduciary Preparedness

Conduct Required Testing

Top providers help employers perform necessary compliance checks:

  • ADP/ACP nondiscrimination tests

  • Top-heavy testing

  • Eligibility and coverage verification

Early preparation reduces risk and avoids last-minute corrective actions.

Maintain Documentation

Proper recordkeeping demonstrates fiduciary oversight and compliance:

  • Document committee decisions

  • Track investment selections and plan changes

  • Keep records of employee communications

Thorough documentation protects employers and supports regulatory adherence.

Plan for 2026 Strategic Improvements

Adjust Plan Offerings

Consider introducing new features or perks to enhance retirement benefits:

  • Health savings account integration

  • Financial wellness programs

  • Additional voluntary contributions or matching strategies

These improvements can make your plan more attractive to current and prospective employees.

Stay Informed About Regulatory Changes

IRS and Department of Labor guidance can impact contribution limits, plan design, and compliance requirements. Staying updated ensures your plan is aligned with 2026 regulations.

Partner With a Trusted 401(k) Provider

Working with a knowledgeable provider ensures your plan is optimized, compliant, and designed for maximum employee benefit. Providers can assist with:

  • Year-end reviews and adjustments

  • Investment optimization

  • Employee education and engagement

  • Strategic planning for the new year

By partnering with experts, employers set themselves and their employees up for long-term retirement success.

Take Action Now

2026 is just around the corner. Reviewing your plan, educating employees, and implementing strategic improvements today can make a lasting difference in retirement outcomes.

Schedule a consultation with a trusted 401(k) provider to ensure your plan is ready to maximize benefits for both your employees and your business in 2026.