Check that Plan Documents Match Plan Operations

If your organization has implemented optional features under SECURE or SECURE 2.0, confirm that your written plan document reflects those changes. For most private-sector, non-collectively bargained 401(k) plans, amendments documenting these features generally must be adopted by December 31, 2026.

Examples include allowing employees to elect Roth treatment for employer matching contributions, offering matching contributions based on qualified student loan payments, or permitting emergency personal expense distributions. These features are optional, but implementing them creates a responsibility to update the plan document.

Before year-end, review the features your organization has implemented with your third-party administrator or plan document provider. Confirm that any necessary amendments have been prepared and formally adopted by the applicable deadline, and retain the completed documents with your plan records.

Certain mandatory changes have later deadlines for updating the written plan document. For example, the IRS generally expects amendments reflecting the Roth catch-up requirement to be due December 31, 2029, even though the requirement began applying in 2026. Sponsors should confirm their amendment schedule with their plan document provider while continuing to follow the rules already in effect.

Review Roth Catch-Up Contribution Processing

 The Roth catch-up contribution requirement took effect in 2026. For this year, the requirement generally applies to catch-up-eligible participants whose 2025 FICA wages from the sponsoring employer exceeded $150,000. Plans subject to the requirement should already have procedures in place to process these participants’ catch-up contributions on a Roth basis.

Before year-end, review year-to-date payroll and recordkeeper reports to confirm that affected employees were identified correctly and their catch-up contributions were processed as Roth contributions. Verify that amounts withheld through payroll agree with the amounts recorded in participants’ Roth accounts.

Also confirm that payroll applied the appropriate age-based contribution limits, including the higher catch-up limit for eligible participants who turn 60, 61, 62, or 63 during 2026.

This review can help uncover processing errors before the final payroll of the year. If discrepancies are identified, coordinate promptly with payroll, the recordkeeper, and the third-party administrator to determine the appropriate correction.  

Reconcile Payroll Deductions to Plan Deposits

 Before year-end, compare year-to-date payroll totals for employee deferrals and loan repayments with the recordkeeper’s contribution reports. Account for deposits still in transit, and follow up on unexplained differences. Review any outstanding notices about rejected payroll files, failed transfers, or contributions that could not be allocated to participant accounts.

Take a closer look at payrolls involving bonuses, payroll system changes, or staff transitions. Confirm that these submissions were completed successfully and that funds reached the plan.

Review deposit timing as well. Plans with fewer than 100 participants at the beginning of the plan year can use a seven-business-day safe harbor for employee contributions and loan repayments. Plans with 100 or more participants must deposit these amounts as soon as they can reasonably be separated from the employer’s assets; there is no fixed seven-day allowance.

Investigate deposits that took longer than usual, and work with your service providers to determine whether corrections are needed. Confirm that someone monitors each submission through completion and that backup coverage is available during absences.  

Pay Special Attention to Bonuses and Employer Contributions

Year-end bonuses and other unusual payments can expose payroll setup errors. Confirm that the compensation used to calculate deferrals and employer contributions follows the plan document. Different definitions may apply to different contribution types.

For example, including a bonus in—or excluding it from—the contribution calculation incorrectly can affect both employee deferrals and employer contributions. The IRS recommends reviewing plan compensation definitions and communicating them to the people responsible for payroll and plan administration.

Also review matching calculations and determine whether the plan requires an annual true-up. Coordinate any remaining employer contribution calculations and funding deadlines with the third-party administrator.  

Strengthen Controls for the Year Ahead

Year-end is a good time to evaluate the processes that keep your retirement plan running smoothly. Clear responsibilities, consistent oversight, and documented procedures can help prevent errors and ensure issues are addressed promptly.

Consider whether someone independently reviews payroll contribution files, monitors rejected transactions, and verifies that employee elections are implemented accurately. Establish backup coverage during vacations and staff transitions, and confirm that payroll, human resources, and service providers communicate changes that affect plan administration.

Maintain plan amendments, reconciliations, correction records, and evidence of management review in an organized, accessible location. When an error occurs, address its underlying cause and update procedures to reduce the likelihood of recurrence.   

Questions About Retirement Plan Governance?

Retirement plan governance does not need to be complicated, but it does require ongoing oversight and documentation. If you have questions about retirement plan committee responsibilities, fiduciary oversight, internal controls, or service provider monitoring, contact a member of HBE's Employee Benefit Plan team.