How the 2026 midterm elections could shape retirement policy

While some form of divided government is the most likely outcome after the 2026 midterms, retirement policy could remain one area where progress is still possible. For example, both the SECURE Act and SECURE 2.0 advanced with broad support from lawmakers in both parties.

Regardless of the election outcome, policymakers continue to face many of the same retirement challenges, including expanding coverage, increasing participation, and helping workers convert savings into retirement income. Those priorities have historically attracted bipartisan interest and are likely to remain part of the policy conversation over the next two years.

For plan sponsors, proposed policy changes can provide an early look at the trends and priorities that may influence future plan design, administration, and participant engagement. Understanding where policymakers are focusing their attention can help employers evaluate how their plans may need to evolve over time.

It’s also important to watch policymaking immediately after the election during the so-called “lame duck session,” before the new Congress is sworn in.  Post-election lame-duck sessions often free lawmakers to address unfinished priorities, and this year’s session could provide an opportunity for limited but impactful retirement policy changes.

While stand-alone retirement bills introduced during the 2025-26 congressional session may change or stall in committee, there is a common theme: policymakers are looking for ways to bring more workers into the retirement system, expand lifetime income options, and make retirement savings easier to manage throughout a participant’s career and retirement years.

1. Expanding access
Closing coverage gaps remains a priority in Washington, which could bring more employers and worker populations into the retirement system over time. Organizations that don't currently offer a plan, or have employee groups with limited access to benefits may face growing expectations to expand retirement coverage.

Proposed legislation includes:

• Universal retirement coverage approaches that would require most employers to offer a retirement plan or automatically enroll workers into an IRA.
• Increased tax incentives for the smallest employers, generally those with 10 or fewer employees, to help offset startup and administrative costs.
• Expand tax incentives for starting a retirement plan to tax-exempt organizations by applying the credit against the employer’s share of FICA taxes. 
• Expand retirement plan coverage for independent workers without triggering worker reclassification.
• Lower the participation age requirement below the current threshold used by most plans (typically age 21).
• Create new ways for full-time or heavily engaged family caregivers to make accelerated retirement contributions when caregiving responsibilities interrupt traditional employment.

Employers that currently offer limited access to retirement benefits or have significant populations of part-time, seasonal, or independent workers may want to monitor these proposals closely.

2. Expanding retirement income options
As retirement income continues to gain attention, lawmakers are exploring ways to help participants turn savings into lasting income. This trend could further elevate retirement income from an optional feature to a more central part of the workplace retirement experience.

Proposed legislation includes:

• Require most plans to make a distribution option available to participants that guarantees income for life.
• Allow Qualified Default Investment Alternatives (QDIAs) to include guaranteed income components with limited liquidity.
• Provide additional flexibility in retirement income planning by allowing penalty-free, in-service distributions at age 50 or older to purchase an income annuity.

Plan sponsors may want to evaluate whether current plan design, participant education, and retirement income resources support employees’ transition from saving for retirement to generating income in retirement. 

3. Simplifying plan administration
Policymakers recognize that administrative complexity can discourage employers from starting or maintaining retirement plans. Proposed changes aim to reduce friction in plan operations while giving sponsors greater flexibility to manage their responsibilities.

Proposed legislation includes:

• Extend the Form 5500 filing deadline.
• Permit all employers with 100 or more participants in a defined contribution group (DCG) to be subject to a consolidated audit.
• Allow certain Roth IRAs to be rolled into qualified retirement plans.
• Expand investment options available to 403(b) plans.

While the legislative path remains uncertain, the proposals demonstrate continued momentum behind efforts to strengthen workplace retirement programs. Plan sponsors will want to monitor how these developments could affect plan design, administration, and participant engagement.

Retirement policy can also advance outside of Congress through executive actions, regulatory guidance, and state initiatives. Recent developments suggest these channels may become increasingly important if a split government limits major legislative action.

Executive brand initiatives

One example is the administration's TrumpIRA.gov initiative, which aims to create a federal marketplace that connects workers without access to a workplace retirement plan with private-sector IRA options. The initiative highlights how retirement policy objectives can be advanced through executive branch actions and administrative programs, in addition to congressional legislation.

Saver’s Match implementation

The Saver's Match is a significant retirement provision still moving toward implementation under SECURE 2.0. It replaces the Saver's Credit with a federal matching contribution deposited into an eligible retirement account, potentially expanding retirement saving opportunities for lower-income workers.

Implementation remains complex, and federal agencies continue to evaluate how the program will operate. Additional guidance could shape how retirement providers, recordkeepers, and plans support eligibility, contributions, and participant communications.

For plan sponsors, the Saver's Match could help encourage participation and retirement savings among lower- and moderate-income employees. As details are finalized, sponsors may want to consider how participant communications can help employees understand and take advantage of the incentive.

State-run retirement programs

States continue to play an active role as well. More than 20 states have adopted auto-IRA programs to expand access to retirement plans for workers without an employer-sponsored plan.

Understanding the various channels through which retirement policy can happen is important. Focusing only on congressional activity could mean missing changes that ultimately influence plan administration, overall employee benefits strategies, and retirement readiness efforts.

Social Security discussions

Although retirement policy has often been one of the few areas where lawmakers from both parties have found common ground, Social Security presents a different challenge. While there is agreement that the program's long-term finances need attention, policymakers often disagree on how to address it, making comprehensive reform difficult in virtually any political environment. Although administrations have limited ability to make significant changes to Social Security without Congress, they can influence the broader retirement landscape through executive orders, regulatory priorities, research efforts, and public policy proposals. These actions may shape retirement policy discussions even if major legislation remains difficult to advance.

For plan sponsors, the key takeaway is that Social Security policy discussions can influence participant behavior regardless of whether new legislation is enacted. Questions about future retirement income may increase employee interest in workplace savings programs, retirement income solutions, and retirement planning education.

For a deeper look at the potential future of Social Security, read my article, Social Security at a crossroads: What reform could mean for retirement plans.

Election outcomes may influence the path retirement policy takes, but they are unlikely to change the underlying challenges policymakers are trying to address.

Four actions plan sponsors can take now:

• Evaluate plan design. Review whether automatic (auto) enrollment, auto-increase, and employer contribution structures align with retirement readiness goals.
• Assess retirement income readiness. Determine whether participants have access to tools, education, and solutions that can help convert savings into retirement income.
• Monitor state initiatives. Multi-state employers should remain aware of expanding state auto-IRA requirements and associated compliance obligations.
• Prepare participant communications. Develop strategies for addressing employee questions about retirement income, workplace savings, and Social Security.