SECURE Act 2.0: Key Audit Risks Plan Sponsors Should Address Before the 2026 Year-End Amendment Deadline

As retirement plans continue implementing the wide-ranging provisions of SECURE Act 2.0, 2026 represents an important compliance milestone for plan sponsors. Most calendar-year retirement plans must formally adopt their SECURE Act 2.0 plan amendments by December 31, 2026, even though many provisions have already become operationally effective. As a result, auditors are increasingly focused on whether sponsors have incorporated these changes into day-to-day operations and updated their governance and administrative processes accordingly.

For plan sponsors, the practical takeaway is that SECURE Act 2.0 compliance is no longer just a documentation exercise. Sponsors should be able to show how the new rules have been built into payroll, eligibility tracking, recordkeeping, and internal review procedures before the audit begins.

One of the most significant audit risks for 2026 involves the new Roth catch-up contribution requirements for certain higher-paid employees. Starting January 1, 2026, SECURE Act 2.0 mandates that retirement plan participants age 50 or older whose prior-year FICA wages from the employer sponsoring the plan exceeded $150,000 for the 2026 tax year must make all catch-up contributions on an after-tax Roth basis. Plans should confirm that payroll systems properly identify participants subject to the Roth catch-up rules and that contributions are administered accurately.

Plan sponsors should also pay close attention to long-term part-time employee eligibility requirements. Under SECURE Act 2.0, part-time employees become eligible to make elective deferrals to a 401(k) plan after working 500 hours in each of two consecutive 12-month periods, provided they have also reached age 21. In addition, for the 2026 tax year, the standard catch-up contribution limit for most retirement plans is $8,000 for participants aged 50 and older. Participants aged 60 to 63 benefit from an enhanced “super” catch-up limit of $11,250.

Errors in eligibility tracking, contribution calculations, or payroll coding may result in operational compliance failures. Plan sponsors should use the remainder of 2026 to confirm that required amendments are being prepared, payroll and recordkeeping systems are aligned with SECURE Act 2.0 requirements, and eligibility tracking procedures have been updated. Proactively addressing these areas can help reduce audit findings, avoid costly corrections, and support ongoing compliance as retirement plan requirements continue to evolve.