As 2025 winds down, retirement plan sponsors face a critical opportunity to reflect, recalibrate, and prepare for the year ahead. December is more than a time for closing the books—it’s a strategic moment to ensure your retirement plan is compliant, competitive, and aligned with evolving participant needs.
Year-End Compliance Checklist1 - Before the calendar flips, sponsors should complete essential compliance tasks:
Distribute required notices: Safe harbor, QDIA, and automatic enrollment notices must be sent 30–90 days before year-end
Review plan amendments: Any discretionary changes made in 2025 must be documented by December 31
Audit participant data: Update contact info, verify beneficiary designations, and ensure records are complete.
Deposit contributions on time: Follow DOL guidelines for timely deposits to avoid penalties and audit risks.
Strategic Planning for 20262 - According to MFS’s Retirement Outlook 2025, sponsors are prioritizing:
SECURE 2.0 implementation: Including Roth catch-up contributions for high earners and expanded eligibility for part-time workers
Investment lineup reviews: Reassessing core menus to balance passive and active options, especially for engaged participants nearing retirement.
Retirement flexibility: Only 22% of sponsors offer phased retirement programs, despite growing interest from older workers
Participant Engagement and Financial Wellness3 - J.P. Morgan’s 2025 DC Plan Sponsor Survey reveals:
80% of sponsors feel responsible for employee financial wellness, yet emergency savings programs remain underutilized
Proactive plan design—like auto-enrollment and escalation—correlates with higher satisfaction and better outcomes.
Retirement income solutions are gaining traction, with 61% of sponsors considering in-plan options for decumulation
Profit Sharing and Tax Strategy4 - Consider year-end profit sharing as a tax-efficient way to reward employees:
Contributions are tax-deductible and not subject to Social Security or Medicare withholding.
Flexible formulas (pro-rata, flat dollar, new comparability) allow tailored allocations
Looking Ahead: Trends to Watch in 2026
Living to 100: Longer retirements demand higher savings rates and smarter investment strategies
Generational shifts: Gen X and Millennials dominate the workforce, influencing benefit preferences and participation behavior
Regulatory landscape: Expect continued rollout of SECURE 2.0 provisions and potential legislative changes following the 2025 election5
December isn’t just about wrapping up—it’s about setting the stage for success. By combining compliance diligence with strategic foresight, plan sponsors can empower participants, strengthen fiduciary practices, and build resilient retirement programs for 2026 and beyond.
1 https://www.mercer.com/en-us/insights/law-and-policy/2025-us-retirement-plan-compliance-calendars/
4 https://www.irs.gov/retirement-plans/choosing-a-retirement-plan-profit-sharing-plan
5 https://quakerwm.com/blog/f/retirement-shake-up-what%E2%80%99s-coming-in-2025-2026-and-2027
