Advisors Brace for Major Retirement Policy Shifts in 2026

The discussion, featuring insights from Michael Doshier, senior vice president of Retirement Partners at LPL Financial; Greg Bailey, vice president and associate counsel at LPL Financial; Mary Kate Clement, vice president of government relations at LPL Financial; and Todd Rosenbluth, head of research at TMX Vetta-Fi, underscored that while market cycles continue to influence short-term outcomes, a quieter but equally consequential force is at play: legislative and regulatory shifts that will redefine how retirement plans operate and how advisors deliver value.

With multiple provisions of SECURE 2.0 set to take effect in 2026 — and new savings vehicles and investment frameworks emerging — the focus is shifting from awareness to implementation. Advisors are increasingly being called upon not just to manage assets, but to interpret policy, coordinate providers, and guide clients through complexity. 

One of the most consequential changes for advisors is the long-delayed Roth catch-up requirement under SECURE 2.0. It officially takes effect on January 1, 2026.

Beginning that year, retirement plan participants earning more than $150,000 in FICA wages (adjusted from the original $145,000 threshold) will be required to make all catch-up contributions on a Roth basis. Pre-tax catch-up contributions will no longer be permitted for these high earners.

Panelists emphasized that this rule is not optional. It will apply even during the IRS’s “good faith compliance” period. Advisors were urged to confirm that both payroll providers and recordkeepers are operationally prepared to identify affected participants and properly administer Roth catch-up contributions, as errors will require correction.

Another major legislative development discussed was the Retirement Fairness for Charities and Educational Institutions Act, which recently passed the House with strong bipartisan support and now advances to the Senate.

If enacted, the legislation would allow 403(b) plans to include collective investment trusts (CITs) and other lower-cost investment vehicles that are currently prohibited under federal rules. Industry observers view the bill as a meaningful step toward leveling the playing field between 403(b) plans and their 401(k) counterparts, particularly for nonprofit and education-sector workers who have historically faced higher investment costs.

The panel also examined the introduction of Trump Accounts. This new government-sponsored savings program for children was created under recent federal legislation.

Trump Accounts are structured similarly to IRAs for minors and will be available to U.S. citizen children under age 18. Eligible children born between January 1, 2025, and December 31, 2028, will receive a $1,000 government seed contribution. Accounts must be established through the Treasury Department, with assets invested in U.S. equity index funds managed by private financial institutions.

Annual contributions are capped at $5,000 from family and friends, with separate limits for employer contributions. Funds may later be used for approved purposes such as education, a first home purchase, or starting a business.

While not strictly a retirement account, Trump Accounts highlight a growing policy trend: the convergence of long-term wealth building and retirement planning. For advisors, these accounts may serve as an early engagement tool. They introduce families to disciplined, tax-advantaged saving well before traditional retirement planning begins.

Across all topics, panelists stressed the importance of proactive preparation. Advisors were encouraged to:

• Confirm that payroll systems can track FICA wages accurately for Roth catch-up compliance;
• Coordinate with 401(k) recordkeepers on Roth processing and deemed Roth elections; 
• Communicate upcoming changes clearly to plan sponsors and affected participants; and
• Monitor evolving guidance on private equity and alternative investments in 401(k) plans.

Several speakers noted that while many regulatory changes are technically complex, they also create opportunities for advisors to deepen client relationships by helping employers and participants navigate uncertainty.

Another emerging area of focus is the potential inclusion of private equity and other alternative investments in 401(k) plans. An executive order has directed regulators to issue guidance, raising questions around fiduciary responsibility, risk management, and participant protection.

Panelists noted that while expanded investment menus could offer diversification benefits, they also heighten the need for clear guardrails. Advisors will play a critical role in helping plan sponsors balance innovation with prudence as regulatory guidance evolves.

Not all regulatory developments increase complexity. The expansion of self-correction provisions under SECURE 2.0 allows plan sponsors to fix many operational errors without formal IRS intervention. This flexibility reduces compliance risk, but only if issues are identified.

Advisors were encouraged to help clients proactively review plan operations rather than avoid uncovering mistakes. In this environment, early detection and correction are increasingly viewed as best practices rather than red flags.

Throughout the discussion, a consistent theme emerged: Retirement planning is no longer siloed from wealth management. Advisors who integrate plan consulting, participant education, and individual financial planning are seeing stronger growth and deeper client relationships.

Rather than focusing solely on investment selection, advisors are being asked to interpret policy changes, assess operational readiness, and communicate implications in clear, practical terms. In many cases, legislative change is becoming a catalyst for engagement rather than a compliance burden.

Originally published on Advisor Perspectives

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