Interesting article in 401k Specialist magazine in retirement plan trends and best practices for 2026. I enjoy reading these as it helps me think about what I am doing in my practice and how to be better. I share this information in the hopes that plan sponsors find it useful.
Three trends and a big thumbs-up for the best practices.
1. Advisor role is not just investment focused but Enterprise-Risk Partner
Retirement plans increasingly create risk for sponsors and advisors — legal, operational, cybersecurity, and reputational risk are rising. Lawsuits related to plan design (e.g., forfeitures) and regulatory shifts like new Super Catch-Up rules underscore this. Advisors must help sponsors anticipate and mitigate risk, not just manage investment returns.
Best practices
Broaden committee meeting agendas to cover legislative and litigation updates, integrating cybersecurity and data governance into plan oversight, and stress-testing operational processes, not just outcomes.
Of note, I have an entire section on my website entitled, “Litigation Lessons” where I share recent 401k court cases and the relevant lessons for plan sponsors.
2. Employee Financial Well-Being Drives Participation and Retirement Outcomes
Employee financial stress and disengagement are major barriers to meaningful participation. Engagement rates are low even when wellbeing benefits are offered, pointing to a disconnect between availability and utilization. Retirement plans have to be positioned within a broader financial wellbeing framework. Advisors should integrate personalized guidance tools and align retirement strategies with employee behavior, not just plan mechanics.
Best practice
Help sponsors embed financial wellbeing into communication, education, and plan design, using data and AI for tailored participant support.
There is a limit to what can be done though. How much data can be garnered from the record keeping website is one constraint, for example. In one recent webinar, the presenter talked about tailoring communication to someone who just had a baby. I like the idea but that is not something that is generally captured on the 401k side.
3. Benefits Decisions are Interdependent with Broader Total Rewards
Sponsors now view retirement plans through the lens of overall benefits strategy. Flexibility, work-life balance, and wellbeing influence engagement and retention as much as retirement design. Advisors need to collaborate with HR/benefits teams, leverage workforce data to segment strategies, and clearly connect retirement outcomes to retention and satisfaction metrics.
Best Practices Every Plan Sponsor Should Prioritize:
- Elevate retirement plan discussions to include regulatory updates, litigation risk, and cybersecurity.
- Integrate retirement outcomes into broader employee wellbeing and total rewards strategies.
- Use segmentation and workforce analytics to align benefits with employee priorities and behaviors.
- Build robust communication programs that go beyond annual enrollment and focus on financial resiliency year-round.
- Establish cross-functional governance practices that tie retirement, health benefits, and engagement data together.
The Parting Glass
Sponsors and advisors who treat retirement plans as isolated investment vehicles are already behind. The most effective plans going forward will be those that address the human capital aspects of retirement outcomes — financial stress, savings behavior, and wellbeing — and enterprise risk management at the sponsor level. Advisors who excel will be strategic partners to HR and finance leaders, helping them translate retirement plan design into organizational goals like retention, productivity, and risk mitigation.