Employers Must Amend Retirement Plans by December 31, 2026

Employers sponsoring 401(k) and 403(b) plans must formally adopt SECURE 2.0 amendments by December 31, 2026—just eleven months away. While most plan sponsors have been operating under the new rules since they took effect, the formal plan document amendment deadline creates immediate compliance exposure for Long Island businesses that could trigger ERISA violations and audit risks if not properly addressed.

The Amendment Gap: Operating vs. Documentation

SECURE 2.0 created an unusual compliance situation where employers must immediately operate under new rules while formal plan document amendments have an extended deadline. Nassau and Suffolk County businesses have been required to implement catch-up contribution increases, Roth options, and other SECURE 2.0 provisions as they became effective, but many plan documents still don't reflect these operational changes.

This creates a documentation gap that exposes employers to audit risk. Plan operations that don't match written plan documents can trigger IRS and DOL scrutiny, potentially jeopardizing qualified plan status. Analysis of SECURE 2.0 compliance requirements emphasizes that employers must close this gap by December 31, 2026, or face significant regulatory consequences.

The formal amendment process requires coordination with plan providers, legal counsel, and payroll systems to ensure all SECURE 2.0 provisions are properly documented and integrated into existing plan structures. Long Island employers cannot simply continue operating under informal procedures—federal law requires comprehensive plan administration documentation that reflects actual plan operations.

Key Provisions Requiring Amendment

SECURE 2.0 introduced numerous changes that affect how retirement plans operate, each requiring specific plan document language to maintain compliance. Long Island employers must identify which provisions apply to their specific plans and ensure proper documentation for all implemented features.

Critical amendments include:

• Catch-up contribution increases allowing participants age 50+ to contribute up to $7,500 additional annually
• Mandatory Roth treatment for catch-up contributions by high earners
• Automatic enrollment requirements with 3% minimum contributions escalating to 10%
• Enhanced Qualified Longevity Annuity Contract (QLAC) limits for retirement income planning
• Student loan payment matching provisions for employee retention
• Emergency savings accounts allowing up to $2,500 in accessible funds
• Required Minimum Distribution (RMD) changes and penalty relief provisions

The comprehensive guide to SECURE 2.0 amendment deadlines notes that employers must carefully review each provision to determine applicability and ensure proper implementation in their plan documents.

Nassau and Suffolk County employers with multiple locations or complex plan structures face additional complexity in ensuring consistent amendments across all plan components and participant groups.

Compliance Risks: Beyond Simple Penalties

Failure to adopt formal SECURE 2.0 amendments by December 31, 2026, creates multiple layers of compliance exposure that extend far beyond simple penalty assessments. Long Island employers face potential loss of qualified plan status, fiduciary liability claims, and comprehensive audit exposure that could affect their entire benefits program.

The primary risks include:

• ERISA violation exposure for operating plans without proper documentation
• IRS disqualification risk if plan operations don't match written documents
• Fiduciary liability for plan sponsors who fail to ensure proper compliance
• Audit triggers when Form 5500 filings don't reflect actual plan operations
• Employee litigation risk if benefit promises aren't properly documented

The fiduciary liability aspect is particularly concerning for Nassau County employers, as plan sponsors have personal responsibility for ensuring plan compliance. Directors and officers who fail to adopt required amendments could face individual liability for resulting losses or penalties.

Professional ERISA compliance support helps ensure that all plan amendments meet federal requirements while protecting plan sponsors from personal liability exposure.

Plan Provider Coordination: Avoiding the Deadline Rush

The December 31, 2026 deadline affects every employer with qualified retirement plans, creating potential bottlenecks at plan providers and legal counsel as the date approaches. Long Island employers who wait until late 2026 may face delays, increased costs, and rushed amendment processes that create additional compliance risks.

Early action provides several advantages:

• Better access to qualified legal counsel and plan administration support
• Time for thorough review and customization of amendment language
• Coordination with annual plan audits and Form 5500 preparation
• Employee communication planning for benefit changes
• Payroll system updates and testing before year-end processing

Suffolk County employers should begin the amendment process now to ensure adequate time for review, customization, and implementation. The IRS guidance on SECURE 2.0 provisions provides detailed requirements that must be carefully integrated into existing plan documents.

Plan providers may experience high volume as the deadline approaches, potentially creating delays for employers who postpone the amendment process. Early action helps ensure timely completion while avoiding last-minute compliance gaps.

Special Deadline Extensions

While most private sector employers face the December 31, 2026 deadline, certain plan types have extended timeframes that may affect Long Island businesses with complex benefit structures:

• Governmental plans have until December 31, 2029
• Collectively bargained plans have until December 31, 2028
• Non-governmental 457(b) plans have until December 31, 2027

Nassau County employers with multiple plan types must track different deadlines and ensure each plan receives appropriate amendment attention within its specific timeframe.

Implementation Strategy: Eleven-Month Action Plan

With eleven months remaining until the December 31, 2026 deadline, Long Island employers have adequate time for thorough amendment preparation if they begin the process immediately. The key is establishing a systematic approach that addresses all SECURE 2.0 provisions while coordinating with existing plan operations and annual compliance activities.

Essential steps include:

• Comprehensive review of current plan documents and operations
• Identification of all applicable SECURE 2.0 provisions
• Coordination with plan providers and legal counsel for amendment drafting
• Payroll system updates to support new contribution limits and features
• Employee communication planning for benefit enhancements
• Documentation of amendment adoption process for audit purposes

The amendment process should be coordinated with annual plan reviews and Form 5500 preparation to ensure consistent documentation across all compliance activities. This integrated approach helps avoid conflicts and ensures comprehensive compliance with all federal requirements.

Suffolk County employers with growing workforces should also consider how SECURE 2.0 amendments affect their employee recruitment and retention strategies, as enhanced retirement benefits can provide competitive advantages in tight labor markets.

Employers with questions about SECURE 2.0 plan amendments can reach us at info@bentonoakfield.com.

This content is for informational purposes only and does not constitute legal, tax, or benefits advice. Requirements vary based on employer size, location, and plan structure. Information is current as of 2026-02-09. Employers should consult qualified advisors for guidance on their specific circumstances.