Retirement Plan Compliance: Strategies to Make 2026 Easier

Retirement Plan Compliance: Strategies to Make 2026 Easier
January 9, 2026 5 mins

Retirement Plan Compliance: Strategies to Make 2026 Easier

Retirement Plan Compliance: Strategies to Make 2026 Easier

Each year, U.S. retirement plan sponsors face the same compliance headaches. From data quality to shifting regulations, the process is complex and frustrating. Read more to discover how HR teams can simplify and enhance retirement plan compliance.

Key Takeaways
  1. Routine payroll reconciliation and leveraging expert providers help minimize mistakes and ensure compliance with evolving requirements.
  2. Outsourcing audit and coordination tasks reduces errors and missed deadlines.
  3. Centralized oversight during mergers and acquisitions (M&A) can mitigate retirement compliance risks.

What are the top three compliance challenges for retirement plan sponsors?

1. Payroll and Deferrals

Payroll errors can lead to inaccuracies in eligibility, compensation, contribution calculations and loan administration. A plan’s tax-qualified status is compromised if employee contributions don't match their elections and loan deductions are not processed correctly. Incorrect compensation codes or match calculations can violate plan terms.

Errors with annual contribution limits may also trigger IRS corrections. With the mandatory Roth Catch-Up for high earners starting in 2026, even more careful oversight will be needed to ensure payroll and recordkeeping remain compliant, as mistakes could lead to time-consuming and costly corrections along with participant frustrations and reputational damage.

  • What it looks like:

    A national retail chain has dozens of locations, each running its own payroll platform. During the year-end compliance review, the benefits manager notices that several employees have discrepancies in their contribution and loan payment records; their 401(k) elections were not properly reflected in the payroll system, and contribution and loan payment deductions have been inaccurate for several months.

    This not only delays year-end reconciliation processes but also creates uncertainty for employees about the administration of their retirement savings. Errors can require time consuming and costly corrections. Depending on the significance of the error, organizations may be eligible to self-correct or may need to file through IRS correction programs.

  • The fix:

    Routine reconciliation and expert support can prevent problems and protect employee outcomes. By partnering with experienced providers, organizations gain access to specialized expertise and solutions with built-in payroll audits. Pooled Employer Plan (PEP) providers can implement these best practices with weekly payroll audit and full outsourcing of corrective processes. Outside support for single employer plans also brings dedicated technology and tools that streamline data integration and reporting, reducing manual workload and minimizing errors.

2. Stakeholder Coordination

Record keepers, auditors and third-party administrators (TPAs) often operate independently. Miscommunication and bottlenecks slow everything down, leading to confusion and missed deadlines. For HR teams that are already stretched to the limit, stakeholder coordination can lead to substantial risks.

  • What it looks like:

    Picture an HR team at a mid-sized company during year-end. The team oversees the annual retirement plan audit, coordinating with auditors and record keepers, and also leading a major update to the payroll system to correct compensation codes and contribution calculations.

    At the same time, the team is fielding questions from employees about annual benefits enrollment, ensuring that new elections are accurately captured and reflected in payroll. The constant juggling of these critical tasks leaves HR professionals stretched thin, increasing the risk of errors and missed deadlines as they try to keep everything running smoothly for employees and the organization.

  • The fix:

    HR leaders can outsource audit work to pooled plan providers (PPPs), making annual compliance far less stressful. PEP providers take on the responsibility for audit coordination, ensuring all requirements are met without HR teams having to manage every detail. PEPs also support annual enrollment communications and employee education, streamlining benefits messaging and reducing the administrative burden on internal teams.

75%

of payroll files reviewed had errors in core data—affecting contributions, limits testing, and readiness for the 2026 Roth catch‑up rules.

Source: FuturePlan/Ascensus payroll data quality review

3. Mergers and Acquisitions (M&A)

Mergers and acquisitions bring a whirlwind of operational challenges, and retirement plan compliance is often one of the most complex. Organizations typically inherit multiple plans with differing structures, fiduciary responsibilities and administrative processes. This creates a heightened risk of regulatory missteps under ERISA and IRS rules. For lean HR and finance teams, these compliance obligations can feel overwhelming.

  • What it looks like:

    Consider a scenario where a company acquires another organization with its own 401(k) plan. Suddenly there are two sets of plan documents, service providers and audit requirements. Aligning these quickly while maintaining compliance can be costly and time-consuming. Errors in plan administration or missed filings can lead to penalties and reputational damage.

  • The fix:

    Centralized oversight allows merging organizations to consolidate governance under a single structure. A pooled employer plan provider also streamlines integration, allowing for rapid onboarding of acquired employees.

84%

of corporate retirement plans reviewed showed at least one ERISA “red flag,” including regulatory violations and operational issues such as late or missing contributions.

Source: Abernathy Daley 401(k) Consultants analysis of 764,729 Form 5500 filings, 2025.

Find Out More

Key Actions to Make Annual Compliance Easier

  • Use tools to check data and readiness early
  • Streamline processes to reduce audit stress
  • Support lean teams
  • Focus on outcomes: better data, smoother audits and stronger futures for employees

Retirement plan compliance doesn’t have to be a burden. With proactive strategies and the right support, 401(k) compliance in 2026 will be smoother, more efficient and more secure.

General Disclaimer

This document is not intended to address any specific situation or to provide legal, regulatory, financial, or other advice. While care has been taken in the production of this document, Aon does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the document or any part of it and can accept no liability for any loss incurred in any way by any person who may rely on it. Any recipient shall be responsible for the use to which it puts this document. This document has been compiled using information available to us up to its date of publication and is subject to any qualifications made in the document.

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