Top considerations for defined contribution plan sponsors in 2026 

Investment Fee Review

Investment fee reviews should go beyond periodic peer universe comparisons. We have seen some notable changes in investment management fees over the past year, including an institutional “fee-free” index fund². If you have not conducted proactive negotiations recently, we recommend engaging with your investment managers to evaluate how plan growth and market dynamics may create opportunities for new vehicles or fee structures. We do recommend being cautious about opportunities that may seem too good to be true – there is no such thing as a free lunch.

Retirement Income/Fixed Income

Retirement income offerings are gaining traction. Sponsors who have not yet received education on this topic should do so. For those who are ready to evaluate retirement income offerings, we encourage you to build a long-term strategy based on demographic data to help prioritize which offerings to evaluate. The keys to a successful retirement income offering are effective communication and offering an array of options to meet varying needs. Particular attention should be paid to the range of fixed income offerings in DC plans. We encourage plan sponsors to consider whether the structure of their fixed income offerings can support both the accumulation and decumulation needs of participants, or whether other fixed income fund structures should be considered to better meet the needs of participants’ portfolios.

Alternative Investments

The August 2025 Executive Order entitled Democratizing Access to Alternative Assets for 401(k) Investors is not a mandate to include alternative assets in DC plans. Rather, it directs the Department of Labor to evaluate current and past guidance related to alternative investments. We have already seen the DOL take steps³ toward clarifying how plan fiduciaries could consider alternatives, and we believe that more will come in the near future. Simultaneously, we have seen a plethora of investment products come to market that include allocations to private investments. There are merits to private investments, including diversification and the potential to improve risk-adjusted performance. However, there are also considerations around fees, liquidity, participant communication, and administration. Plan sponsors should undertake general education on what constitutes alternatives and the possible benefits and considerations, so they can properly understand and digest industry and regulatory developments in this space.

Participant Touchpoints

When was the last time you looked at your plan experiences through the eyes of participants? Overlooked components, such as website and mobile experiences and routine participant communications, play a critical role in achieving successful participant engagement and plan utilization. The incorporation of AI and “nudges” may be driving participants in unintended directions – or worse, failing to promote advantageous features of your carefully crafted plan design. To help optimize plan utilization, you should review all participant touchpoints and plan communications, and monitor data on how different participant segments engage with your recordkeeper.

Aligning Plan Objectives

Align your recordkeeper to your retirement plan’s objectives and not the other way around. Recordkeepers have expanded their offerings to include products and services that were historically shunned by plan sponsors due to concerns over self-promotion and conflicts of interest. Plan sponsors overburdened with daily operations have often taken a passive approach, while fiduciaries defer on philosophical issues. Sponsors must now reevaluate their recordkeeping relationships with a participant-first mindset to ensure that services and the manner of their delivery align with the organization’s philosophical perspective and risk tolerance. This involves negotiating service-level agreements that emphasize participant outcomes, transparent and aligned fee models, and collaborative innovation to enhance education and engagement tools that are unbiased towards proprietary recordkeeper solutions. Governance frameworks should incorporate participant experience metrics to hold recordkeepers accountable and drive continuous improvement aimed at maximizing the benefits provided to participants.

AI Roadmaps

The AI train has left the station and there are many new sights to see. For DC plan sponsors, it is vital to consider AI’s future impact on how your participants consume the retirement program and how administrative services are executed. There is also an opportunity to look beyond the retirement program to broader benefits. With the evolution of agentic AI, we anticipate a future where agents help with broader aggregated views of benefits to more effectively guide personalized next best steps, and implement those steps in a way that is easier than ever before. It is essential to understand how AI is being deployed today, and to construct a roadmap to help your recordkeeper and other benefit providers build for the future. 

What’s Not on Your Fiduciary Calendar?

Look beyond your fiduciary calendar. These calendars can be helpful tools supporting myriad ongoing monitoring responsibilities, but they do not always capture evolving or more administrative items. Consider recent case-law developments, such as proxy voting practices, and whether your fiduciary committee needs to conduct regular reviews. Contract reviews for providers, like recordkeepers and managed account providers, can help ensure alignment with current services, performance standards, and relationship goals. Be sure to consider cybersecurity, solicitation terms, availability of plan records, and management of third parties involved in service delivery during these reviews. 

Delegation in Support of Strategic Priorities

Consider how delegation can help to achieve strategic priorities. As employers anticipate continued increases in benefit costs, while simultaneously facing the need to cut costs⁴, they need options to support the goal of “doing more with less.” In our 2025 DC Practices Survey: Voice of the Plan Sponsor, we found that over 80% of respondents were interested in exploring partial or full delegation. Plan sponsors should review roles and responsibilities relative to resources and priorities. Delegation may be the answer to support business needs with the potential to help employees achieve better retirement outcomes and enhance efficiencies, while reducing fiduciary risk. Sponsors who have not yet evaluated the spectrum of delegated models should consider how such strategies can help to enhance DC plan outcomes amid today’s complex retirement landscape.

45% of respondents reported a reduction in fiduciary liability insurance premiums since employing an ERISA 3(38) or 402(a) delegated model.⁵

PEPs Are Moving Up-Market

It has been over five years since Pooled Employer Plans (PEPs) were enabled in the US. Adoption has been moving up-market, as sponsors have learned how PEPs can reduce administrative burdens, lower costs, and simplify fiduciary responsibilities in an environment of continued litigation and plan design complexity. As PEPs continue to grow, the efficiency and scale they bring should start to affect the competitive position historically enjoyed by some single-employer plans. We recommend taking time to understand how PEPs work, the potential advantages they may offer, and the implications that may be in store.