Year-End Reminders for Defined Contribution Plans:

As the end of 2025 approaches, retirement plan sponsors should promptly consider several important potential tasks. Examples include the following:

• Required SECURE 2.0 Provision Taking Effect in 2026:  As noted above, effective as of January 1, 2026, if an employee’s FICA wages for 2025 exceed $150,000, then his or her catch-up contributions for 2026 must be in Roth form.
• December 1 Deadline for Certain Participant Communications:  Depending on a plan’s design, one or more of the following annual notices might be required: safe harbor notice, qualified default investment alternative notice, and automatic enrollment notice. For calendar-year plans, if applicable, those notices for 2026 generally must be furnished to participants by December 1, 2025.
• Special 403(b) Plan Notices:  403(b) plan sponsors must ensure that a “universal availability” notice is provided to participants at least once per year. Also, if a 403(b) plan sponsor has adopted an IRS pre-approved plan document, then an Annual Additions Contribution Limit Notice is likely required (depending on the plan’s terms).  
• Summary Annual Report (“SAR”): The SAR summarizes information reported on a plan’s Form 5500. Many plans will have to furnish participants (and beneficiaries of deceased participants) with the 2024 SAR by December 15, 2025, as that deadline will apply to plan sponsors whose 2024 Form 5500 was filed upon a proper extension to October 15, 2025.
• Annual Participant Fee Disclosures: All plans that allow for participant-directed investments must deliver a participant fee disclosure (i.e., an ERISA section 404(a)(5) notice) at least annually to participants and beneficiaries who can direct the investment of their plan account. Now might be the time to deliver this notice, if not already delivered during 2025.  
• Discretionary Plan Amendments: For calendar-year plans, any discretionary amendments  that already became effective in 2025, or that will become effective before the end of 2025, generally must be executed by December 31, 2025. (A discretionary amendment is one that is not legally-required, such as a change to a plan’s eligibility provisions.) In addition, certain discretionary amendments that will become effective in 2026 for calendar-year safe harbor 401(k) plans must be executed before January 1, 2026.
• Legally-Required Plan Amendments:  Many plan sponsors do not have to execute amendments for the SECURE Act, the CARES Act, and the SECURE 2.0 Act until as late as the end of 2026. Plan sponsors should ensure, however, that any permissive provisions being adopted are consistent with their plan’s operations from the date of such adoption. The Speed Reader’s February 2023 edition summarized the voluminous SECURE 2.0 Act’s main provisions, and subsequent editions summarized subsequent related guidance.
• Compliance Testing:  In January or February of 2026, many recordkeepers and third party administrators will provide their retirement plan clients with questionnaires. Clients’ responses to the questionnaires’ requests for information (e.g., census data) will form the basis for 2025 compliance testing. Even safe harbor plans must undergo certain testing for 2025. Plan sponsors who do not receive a questionnaire in January or early February  from the entity that will perform 2025 compliance testing might wish to request the questionnaire by mid-February.
• Miscellaneous Items for Year-End:  Participants generally must begin receiving distributions from their retirement plan by April 1 of the calendar year following the later of the year in which they attain age 72 or the year in which they retire. Also, any participant loans that require Form 1099-R reporting for 2025 should be addressed. In addition, if a plan’s 2024 ADP and/or ACP tests failed, any resulting corrective distributions must be made by December 31, 2025.

The failure to comply with most of those requirements can be addressed under the IRS’s formal correction programs for retirement plans.