- with Inhouse Counsel
Each April, National Employee Benefits Day provides an opportunity to reflect on the rapidly shifting landscape of employer‑sponsored benefits.
From implementing new tax laws, a flurry of executive orders with implications for both retirement and welfare plans, updated agency guidance, increased litigation and enforcement activity, and updates to longstanding requirements, plan fiduciaries have a great deal to manage as they work to stay current. Layered onto these federal developments is a growing patchwork of state and local regulation. Jurisdictions continue to expand mandated benefits, including insurance coverage requirements and state retirement savings programs. For plan sponsors operating across multiple jurisdictions, coordinating compliance has become not only an administrative challenge, but a strategic one.
Here is a sampling of what we are seeing this year:
- PBM Reform and Pharmacy Benefit Fiduciary Oversight
In the PBM space, we have seen new federal legislation, sustained state‑level activity, and heightened ERISA fiduciary scrutiny. In February 2026, Congress enacted PBM transparency and rebate pass‑through provisions as part of the Consolidated Appropriations Act, 2026, requiring 100% rebate pass‑through and expanded reporting obligations for PBMs serving employer-sponsored plans (effective on a delayed basis). These changes build on years of state‑level PBM regulation addressing transparency, pricing practices, and audit rights.
At the same time, the Department of Labor (DOL) has proposed rules that would subject PBMs to ERISA compensation disclosure requirements, reinforcing the expectation that plan fiduciaries understand—and actively monitor—PBM compensation structures and potential conflicts.
The takeaway: PBM arrangements are no longer viewed as purely operational matters; they now sit squarely within fiduciary governance.
- SECURE 2.0: Implementation and Compliance Risk
Retirement plans remain a central focus in 2026, as many provisions of SECURE 2.0 have shifted from long‑term planning considerations to immediate operational realities. Mandatory automatic enrollment for newly established plans, Roth‑only catch‑up contributions for certain higher‑paid employees, and increased catch‑up limits for participants ages 60–63 are prompting plan sponsors to reassess whether their retirement offerings remain aligned with both workforce expectations and compliance obligations.
- 401(k) Plans and Alternative Investment
The White House has consistently signaled interest in expanding access to alternative investments—such as private equity, private credit, and other non‑traditional assets—within defined contribution retirement plans. On March 30, 2026, the Department of Labor took the next step by issuing proposed regulations, the intent of which is to "increase potential retirement investment options" while reaffirming that ERISA's fiduciary standards remain unchanged. Notably, the proposed regulations do not create a safe harbor for alternative investments, nor do they declare any specific alternative asset class to be per se prudent. Instead, the regulations reiterate that fiduciaries must evaluate any investments like these using traditional ERISA principles of prudence and loyalty. That said, a door that may once have seemed closed in the 401(k) space now appears to be opening.
- ERISA Litigation Expands into Voluntary Benefits
ERISA litigation continues to expand in both scope and creativity. Of particular note in 2026 is a growing wave of lawsuits targeting voluntary employee benefits, including accident, critical illness, hospital indemnity, and other supplemental insurance programs. As we've previously noted, these claims have the potential to reshape traditional plan‑broker relationships and increase fiduciary scrutiny in an area that historically attracted relatively little litigation risk.
While the ultimate outcomes remain uncertain, the trend underscores the importance of governance, documentation, and service provider oversight, even for voluntary benefit programs.
This April, we wish to remind you that, although the considerations involved in sponsoring employee benefit plans are complex and continually evolving, plan sponsors and fiduciaries do not have to navigate them alone.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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