In the fourth quarter, several items are converging for retirement plan sponsors. Target-date funds continue evolving toward retirement income features while incorporating new asset classes. Additionally, AI is changing how participants get information and support from their recordkeepers, and SECURE 2.0’s remaining required and optional provisions bring a full year-end document and administration checklist. Meanwhile, courts continue to test whether plans are administered exactly as written, and whether the benchmarks used in litigation match the ones committees use to monitor investments. Across all of it, a well-documented, consistently followed process remains central to how an ERISA plan sponsor demonstrates prudent oversight.  

Here are the developments most relevant to closing out 2026 and setting your governance framework up for the year ahead.

Target-date funds keep moving beyond their original design. The developments worth watching are the build-out of retirement income features aimed at sustainable spending power and the introduction of limited private-asset allocations inside professionally managed vehicles. Neither requires action from sponsors whose menus don’t include them, but both raise the bar for what “understanding your investment options” means at the next committee review.

AI is having a similar effect on the participant side. Recordkeepers are increasingly using AI to power self-service tools. Personalized guidance, conversational search, and transaction support can assist live representatives on service calls. None of these use cases would change a plan sponsor’s fiduciary obligations directly, but they do raise a version of the same governance question the Employee Benefits Security Administration (EBSA) has flagged elsewhere: how participant data is being used and whether AI-driven guidance is balanced or steers toward a provider’s own solutions. Sponsors should ask their recordkeeper directly how AI is being used today and what oversight exists.

SECURE 2.0: The year-end checklist isn’t optional

With the year closing, SECURE 2.0 Act compliance work shifts from tracking to execution. Sponsors should confirm required changes are in place, document any optional provisions their plan has adopted, and work through a formal year-end document checklist covering amendments and restatements. Several plans still have work to do simplifying rollover procedures under the Act’s newer guidance. A missed amendment deadline is one of the more avoidable fiduciary failures a committee can have on its record. Also, 403(b) plan documents must be fully restated before the calendar hits 2027 to comply with the IRS Cycle 2 deadline.

The litigation landscape: Documents and definitions

This quarter’s litigation focused on what plan documents say and how courts choose benchmarks. In litigation over forfeiture practices, including a closely watched case against Charter Communications, a court allowed fiduciary-breach claims to proceed specifically because the plan’s language required forfeitures to be used for administrative expenses before reducing employer contributions. The plaintiffs allege the plan did not follow that order. The case isn’t finally decided, but the principle already is. Whatever a plan’s permitted uses of forfeitures may be, they need to be administered exactly as the document provides.

Benchmarking is also drawing closer scrutiny, with courts increasingly focused on whether the “meaningful benchmark” used in litigation is genuinely comparable to the fund or retirement plan being challenged. A benchmark is not always the same one a fiduciary uses internally to monitor an investment under their plan’s own process. As menus add less comparable strategies like private assets, that gap between litigation benchmarks and monitoring benchmarks is likely to widen further.

The bottom line

Evolving target-date structures, AI in the participant experience, and this year’s litigation all test the same discipline. Does the plan operate the way its documents say it does, and can the committee show its work? Sponsors that close out 2026 with their SECURE 2.0 amendments current and their forfeiture practices matched to plan language are better positioned heading into 2027. As AI continues to reshape how participants get information and support, sponsors should also be able to address how it fits into their governance framework.

Read the full Quarterly research review here.

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