Future of Retirement: 2026 Legislative & Regulatory Outlook

The retirement industry stands at a pivotal juncture, navigating a complex landscape of legislative proposals, evolving regulatory frameworks, and dynamic market forces. As the industry casts its gaze toward 2026, discussions among key stakeholders, such as Jeffrey Snyder of Broadcast Retirement Network and Chris Gaston of Davis & Harman, LLP, illuminate the critical priorities and anticipated shifts. This analysis delves into the accomplishments of the preceding year, the pressing legislative agendas, and the significant regulatory actions poised to shape the future of retirement savings and investment.

Reflecting on 2025: A Foundation for Future Growth

Before charting the course for 2026, it is imperative to acknowledge the achievements and lingering initiatives from the preceding year. The retirement industry experienced a quiet yet significant victory in 2025: the preservation of retirement savings tax incentives. Despite the ever-present search for revenue by tax-writing committees, the bipartisan consensus forged through the Secure Act and Secure 2.0 proved instrumental in shielding these vital incentives from adverse changes. This status quo, often underestimated, represents a foundational win, ensuring that the benefits underpinning millions of Americans’ retirement plans remained untouched. The fact that the second-largest tax incentive in the U.S. tax code was not a target for fiscal balancing underscores a robust, shared commitment to retirement security across the political spectrum.

The Unfinished Business: 403B Investment Expansion

While 2025 celebrated preservation, it also laid the groundwork for future advancements. A key legislative item that neared completion but ultimately "got left on the table" was the initiative to advance investment choice within 403B plans. This issue, a long-standing "half-loaf" from Secure 2.0, has garnered significant bipartisan support. The INVEST Act, which includes crucial exemptions for 403B Collective Investment Trusts (CITs) and unregistered separate account securities, saw substantial movement. Passed by the House Financial Services Committee on a bipartisan basis and later approved by the House as part of a broader banking package, this measure is poised as a front-runner for enactment in 2026. Its progress highlights a collective drive to modernize investment options and enhance flexibility for these retirement vehicles, ultimately benefiting participants.

The 2026 Legislative Horizon: Incremental Progress Amidst Shortened Calendar

As the calendar turns to an election year, the legislative landscape becomes inherently more constrained. The pace of major legislative packages typically slows, narrowing the focus to issues deemed achievable within a shortened window of attention. However, this does not mean a stagnant year for the retirement industry; rather, it implies a strategic emphasis on targeted initiatives and foundational work for future legislative cycles.

Advancing 403B Investment Choices: A Primary Objective

Foremost among the 2026 legislative priorities is the finalization of the 403B investment expansion. The strong bipartisan vote for the INVEST Act in the House, including significant Democratic support, places it on a favorable trajectory for Senate consideration. While no guarantee exists in the unpredictable legislative environment, the momentum suggests a decent chance for this provision to find a home within a bipartisan financial services or capital markets package. Its potential enactment would represent a significant step forward in aligning 403B plans with the investment flexibility often seen in 401k plans.

Emerging Discussions: Beyond Immediate Enactment

Beyond the 403B expansion, several other ideas are circulating within Congress, indicating areas of future legislative interest, even if immediate enactment in 2026 is unlikely. These include proposals for litigation reform, which have been introduced but lack the broad consensus needed for quick passage. Similarly, discussions around lifetime income products and their value within retirement plans, championed by members like Chairman Tim Wahlberg, signify an ongoing effort to enhance retirement security but are not expected to materialize into enacted legislation this year. Furthermore, bipartisan ideas from the Senate health committee, such as lowering the in-plan age for participants from 21 to 18 and encouraging greater auto-enrollment, are viewed as cornerstones for a potential "next retirement package." While these are sound, bipartisan initiatives, they are likely in the "seed planting" phase, requiring further education and coalition-building before becoming law.

The Legislative Pace: Seed Planting, Not Harvesting

The prevailing sentiment regarding 2026 is that it will be a year for laying groundwork rather than harvesting major legislative packages. Members of Congress are actively introducing various retirement-focused bills – from age 18 enrollment to auto-enrollment and lifetime income for employees – demonstrating a commitment to addressing retirement challenges. However, the path to a comprehensive "Secure 3.0" is expected to be longer and more arduous than the transition from Secure 1.0 to 2.0. The automatic IRA bill, reintroduced by Ranking Member Richard Neal, a key architect of previous Secure Acts, exemplifies this. While a significant proposal for expanding coverage, it currently lacks the Republican support needed for swift passage, underscoring the challenges of bipartisan agreement on broader, mandatory coverage requirements in an election year.

Regulatory Landscape: DOL's Proactive Stance and Emerging Trends

In an election year where legislative action might be constrained, regulatory bodies often step into the spotlight, and 2026 is anticipated to be particularly active for the Department of Labor (DOL). The DOL's initiatives are expected to bring significant changes and clarifications to several critical areas within the retirement industry.

Alternative Assets in Retirement Plans: Seeking Clarity

A prominent area of focus for the DOL is the executive order on alternative assets. The industry anticipates the DOL to issue guidance, potentially in the form of a safe harbor or other regulatory clarity, for plan sponsors considering offering greater access to alternative investments within 401k plans. This move recognizes the potential benefits of diversification and enhanced returns that alternatives can offer, while also aiming to provide a clear framework to mitigate risks for plan fiduciaries. Such guidance would be crucial for unlocking broader access to a wider range of investment opportunities for retirement savers.

Combating Frivolous Litigation: DOL's Amicus Brief Initiative

Another significant development from the DOL is its proactive stance against what is often termed the "greedy cookie-cutter plaintiff's bar." The DOL has adopted a "sea change" in its approach, becoming increasingly active in filing amicus briefs to push back on spurious litigation against plan sponsors and service providers. This initiative signals a renewed commitment to defending the retirement savings industry from overly aggressive or unfounded lawsuits, providing a much-needed shield for fiduciaries acting in good faith. This shift is expected to continue and expand throughout 2026, fostering a more balanced legal environment for those managing retirement plans.

The Rise of Trump Accounts: A New Dynamic

Finally, the coming online of "Trump accounts" represents an emerging trend that the retirement industry will closely observe. While not strictly retirement savings accounts, they possess many features that could influence the broader savings landscape. The implementation, selection of service providers, and uptake by companies will provide valuable insights into evolving personal savings vehicles and their interaction with traditional retirement offerings. This new dynamic will undoubtedly be a learning curve for the industry, potentially offering new avenues for individuals to save and invest for their future.

Key Takeaways for the Retirement Industry

The forecast for the retirement industry in 2026 paints a picture of active engagement, albeit with different primary drivers than previous years. The successful preservation of retirement savings tax incentives in 2025 underscores a fundamental bipartisan agreement on the importance of retirement security. Looking ahead, 2026 is strongly positioned to be the year for expanding investment choices in 403B plans, particularly through the enablement of Collective Investment Trusts and unregistered separate accounts. Crucially, the regulatory sphere, led by the Department of Labor, will command significant attention. Efforts to provide clarity on alternative assets in 401k plans and to actively counter frivolous litigation against plan sponsors are anticipated to shape the operational environment. Furthermore, the industry will keenly monitor the rollout and impact of Trump accounts, adding another layer of complexity and potential innovation to the savings landscape.

Indeed, the retirement industry is far from static. The continuous advocacy by professionals, policymakers, and industry groups ensures that the needs of millions of Americans saving for retirement remain at the forefront. As 2026 unfolds, a vigilant watch on both legislative momentum and regulatory guidance will be essential for navigating the evolving path towards enhanced retirement security.