Compliance Corner: Q1 2026
Upcoming Deadlines
The H&S Plan Consultants are hard at work completing the necessary compliance tasks for our 2025 calendar year plans. If you have received a request for additional information from your H&S Plan Consultants, or if you have not yet completed our annual census task, please respond as soon as possible.
Upcoming deadlines in 2026 for calendar year plans (including deadlines for plans in operation during 2025):
March 31st – Recordkeepers (or other party responsible for tracking distributions) should file form 1099-R with the IRS for distributions made during the 2025 plan year.
April 1st – Deadline for initial required minimum distribution (RMDs) for participants who are terminated or greater than 5% owners (including attribution) and attaining age 73 in the prior year.
April 15th - Deadline for plans to refund excess contributions over the 402(g) or 415 limits from the 2025 plan year. For calendar year plans, deadline for C-corps, LLCs taxed as C-Corps, or sole proprietorships to make employer contributions to plan unless deadline for annual tax return is extended.
June 30th – Deadline for refunds to HCE participants due to failed ADP/ACP tests for plans with an Eligible Automatic Contribution Arrangement. After this date a 10% excise tax may apply.
July 31st – Deadline to file Forms 5500 and 5330 without extension for calendar year plans.
Cycle 2 Restatement for 403(b) Plans
Plan Sponsors of our 403(b) plans should be aware of the need to restate their plan documents to reflect current IRS regulations and guidance before the end of the year. “Pre-approved” plans are retirement plan documents that have been reviewed and approved by the Internal Revenue Service to avoid the need to prepare and submit a fully customized plan. In exchange for approval under the IRS document program the IRS agrees it will not challenge the language in the plan on the basis that it does not comply with the Internal Revenue Code provisions. The vast majority of private employer retirement plans utilize the pre-approved document program.
A cycle restatement is the process of updating the existing plan document to the most recent version of the plan that the IRS has reviewed and approved. The IRS requires a restatement to a pre-approved plan approximately every six years to update the documents for legislative and regulatory changes that have occurred since the last time the IRS approved the form of the plan. As a document provider, H&S automatically prepares and disseminates the required Cycle 2 updates to the plans that we support. Starting in Q2 of this year we will begin sending the Cycle 2 restatement documents to our 403(b) Plan Sponsors for review and signature. The Cycle 2 restatement will also include the most recent SECURE 2.0 Interim Amendment. If you recently onboarded with H&S your plan document may have already been restated to a Cycle 2 version but will still require a SECURE 2.0 Interim Amendment that we will provide. The Cycle 2 restatement documents and SECURE 2.0 Interim Amendments must be signed by December 31, 2026.
New H&S Service Agreement with Document Maintenance
Our last service agreement update occurred in approximately 2016. Since that date many significant changes have occurred both in the technology available to service providers and the demands from regulators for clear contractual provisions regarding aspects of plan administration, such as protection of client data or use of cybersecurity insurance. New clients that have been onboarding with us in the last several months have already adopted the updated version of our service agreement through our recently launched Ignition platform that allows for streamlined billing management and easy agreement maintenance. Throughout the year we will work to start migrating existing clients to our updated service agreement starting with the Cycle 2 restatement before shifting to the Cycle 4 restatements for the 401(k) Plans that will launch later this year or early next year.
In addition to modernizing our service agreement and payment portal, our new Ignition platform allows us to move to a document maintenance model with monthly billing. With the increasing frequency of regulatory changes and the cost associated with the six-year restatement cycles we have looked for ways to reduce the burden on our Plans associated with maintaining the plan document. With a document maintenance format our Plan Sponsors avoid large intermittent expenses related to the restatement process. Our document maintenance program will also eliminate the per-amendment charge for up to two amendments per year to add further value to the document maintenance arrangement.
New Paper Statement Rule
One of the lesser-known changes of the SECURE 2.0 legislation is an update to the participant disclosure rules in ERISA Section 105(a) requiring a paper benefit statement. Prior to SECURE 2.0, a plan administrator could choose to deliver electronic notices to “wired-at-work” participants (those whose job duties require employer-provided electronic access) or to participants that affirmatively opt into electronic notice after receiving certain disclosures under the 2002 electronic disclosure safe harbor. Effective for plan years commencing after December 31, 2025, the SECURE 2.0 paper statement rule now requires a one-time initial paper notice for those participants who first become eligible to participate in the plan in the 2026 calendar year or any subsequent year. The new paper statement rule also allows a participant to opt out of electronic delivery entirely and receive only paper disclosures. A Plan Sponsor may not charge a fee for the required paper statements.
To help in administering the paper statement rule, the Department of Labor (DOL) released proposed regulations on February 24, 2026, on the paper statement requirement with RIN 1210-AC27. For those opting into electronic delivery the DOL anticipates that the current advance notice and consent document will effectively satisfy the one-time paper statement requirement. However, for wired-at-work participants the DOL will require that such participants receive a paper benefit statement before any further statements are delivered electronically. Separately, the proposed DOL regulations also include a requirement for a paper statement even when a plan utilizes default electronic delivery under the 2020 electronic disclosure safe harbor that would otherwise allow plans to default participants to deliver via work email unless the participant opts out.
To comply with the new noticing rules, recordkeepers have begun adjusting their statement processes and Plan Sponsors should expect more communication this year on how this works in practice. Plan Sponsors should also review whether newly eligible participants are set up to receive an initial paper notice and whether they are using the most recent version of any notice if provided by a recordkeeper.
Disclaimer: This content is for informational purposes only and does not constitute legal, tax, or financial advice.
Written by: Sam Dart, on behalf of Hunnex & Shoemaker