401(K) plan sponsor year-end checklist

Last updated: December 10, 2025

Year-end checklists help plan sponsors future-proof their 401(k) plan, strengthen their fiduciary foundation and modernize plan administration with integrated payroll and retirement technologies. Reviewing contributions, testing results, plan documents and provider performance helps organizations meet their fiduciary obligations and provides a valuable employee benefit.

401(K) plan sponsor year-end checklist key takeaways:

• A 401(k) plan sponsor checklist helps keep plans compliant and organized.
• Year-end is the best opportunity to optimize plan design and strengthen fiduciary processes.
• Integrated and embedded retirement plan technology reduces manual work and supports compliance.
• Annual fiduciary reviews of fees, services and governance are essential.
• With the right technology partner, plan sponsors can simplify year-end administration and focus on improving participant outcomes.

Stay organized, compliant and ready to elevate plan performance with a 401(k) year-end checklist

For plan sponsors and leaders who oversee retirement plans, the close of the plan year is more than an administrative deadline – it’s a pivotal opportunity to evaluate performance, mitigate risk and set the tone for the year ahead. Year-end provides a natural checkpoint to confirm fiduciary compliance, assess plan costs and verify that employee contributions and employer matches align with organizational goals.

It’s also an ideal time to take a broader view by asking if plan design, participation rates and provider partnerships are driving the right outcomes for both the business and the employees. A structured 401(k) plan sponsor checklist helps leadership teams approach these questions strategically by turning routine year-end tasks into a roadmap for stronger governance and measurable results.

What employers are saying in 2025

• 31% of plan sponsors say participants aren’t on track for a secure retirement.
• 28% report low participation as their top plan concern.
• 43% are likely to evaluate or switch providers by year’s end to improve efficiency and reduce administrative burdens.
• 62% believe employees should focus on maximizing their company match above other financial goals.
• Over 50% would consider moving to a pooled employer plan (PEP) to simplify administration and reduce fiduciary risk.

Source: ADP Retirement Services, Employer Insights on Retirement Plan Benefits, 2025

Opportunities for plan sponsors:

• Transform year-end reviews into a strategic reset for retirement programs.
• Strengthen plan compliance, participation and outcomes with integrated retirement and payroll solutions.
• Leverage technology to automate administrative tasks and focus on improving participant success.

Year-end checklist for 401(k) plan sponsors: What to review before December 31

Before December 31, plan sponsors review contributions, testing, plan documents, notices and fees for compliance with Internal Revenue Service (IRS) and Department of Labor (DOL) regulations. When 401(k) plans and payroll providers sync together using embedded technology, it simplifies data management and reduces manual errors.

1. Review employee deferrals and employer contributions

Start by confirming that all employee deferrals and employer matching contributions are correctly recorded and allocated. Ensure the following:

• No employee exceeds IRS annual deferral limits ($23,500 for 2025, plus $7,500 catch-up for those 50-59).
• All eligible employees have received their employer match or non-elective contributions.
• Missed contributions or payroll errors are corrected before year-end.

Reconciliations like these can be automated using retirement plan technology integrations, which link payroll and plan data in real-time.

2. Verify compliance testing requirements

Annual compliance testing is a core fiduciary responsibility for 401(k) plan sponsors. It ensures that plans remain fair and non-discriminatory under IRS and DOL rules. Before year-end, employers should review the following:

• Actual Deferral Percentage (ADP)/Actual Contribution Percentage (ACP) testing – Confirms contribution rates between highly and non-highly compensated employees are balanced.
• Top-heavy testing – Verifies that key employees don’t hold a disproportionate share of plan assets.
• 402(g) and 415(c) limits – Validates participant contribution and total annual addition limits.

While plan administrators, third-party administrators (TPAs) or recordkeepers typically perform the calculations, the plan sponsor is ultimately accountable for verifying that:

• Testing is completed accurately and on time
  Sponsors must confirm that their provider conducts all required tests according to plan and IRS rules.
• Data supplied for testing is complete and correct
  Employee census data, compensation and contribution information drawn from payroll systems should be included.
• Corrective actions are taken promptly
  If the plan fails a test, the sponsor must work with providers to issue refunds, reallocate contributions or make safe harbor adjustments within regulatory deadlines.
• Results are reviewed and documented
  Fiduciary best practices include reviewing reports, retaining evidence of oversight and documenting decisions to demonstrate procedural prudence under the Employee Retirement Income Security Act (ERISA).

Even when testing is outsourced, fiduciary duty doesn’t transfer. Plan sponsors must actively monitor, verify and document compliance testing to meet their ERISA obligations and protect both the plan and participants.

3. Confirm required minimum distributions (RMDs) are processed

Participants aged 73 or older and terminated employees meeting RMD criteria must receive their RMDs by December 31. Failure to deliver can trigger steep IRS penalties – up to 25% of the required amount. Integrated systems that track eligible participants and automate RMD processing can help reduce this risk.

4. Distribute annual participant notices

Plan sponsors must send several annual notices before year’s end, including:

• Safe harbor notice
• Qualified default investment alternative (QDIA) notice
• Automatic enrollment notice

Notices must be distributed at least 30 days before the start of the new plan year (by December 1 for calendar-year plans). Leveraging benefits integration for retirement plans allows employers to deliver these notices electronically and confirm receipt more efficiently.

5. Review plan documents and amendments

Make sure plan documents reflect all recent legislative changes and internal policy updates, particularly new options introduced by SECURE 2.0, such as:

• Mandatory automatic enrollment for new plans (effective 2025)
• Roth employer match elections
• Emergency savings accounts linked to 401(k)s

Employers can work with their fiduciary financial advisor or TPA to document and execute all plan amendments by the required deadline. A well-organized 401(k) administration checklist that includes document review, signature verification and amendment archiving may also be helpful.

6. Reconcile plan assets and participant accounts

Before closing the plan year, it’s essential to confirm that the plan’s financial records reconcile across all systems – payroll, record keeper and third-party administrator. Employers should check for:

• Discrepancies in loan balances or repayments
• Contribution mismatches
• Incorrect participant data

This data can be automatically synced across platforms using modern HR and retirement plan integrations, minimizing errors and improving audit readiness.

7. Prepare for Form 5500 filing

Although Form 5500 isn’t due until July 31 (for calendar-year plans), gathering documentation at year’s end helps prevent delays. Large plans with 100+ participants should also confirm whether an audit is required and engage auditors early. Embedded retirement plan technology can help streamline this process by consolidating participant data, fee disclosures and audit logs.

8. Evaluate plan fees and service providers

Each year, plan sponsors must conduct a fiduciary review of plan fees and service providers to confirm costs remain reasonable and competitive. This review should cover:

To confirm fees remain reasonable and competitive, plan sponsors must conduct an annual fiduciary review of the following:

• Recordkeeping, administration and advisory fees
• Investment management expenses
• Consulting and fiduciary support

Reviewing this information fulfills the sponsor’s fiduciary responsibility and helps protect both the employer and the plan participants. If assistance is needed in identifying potential cost savings or performance gaps, fiduciary financial advisors can benchmark the plan against industry peers.

Fiduciary review: 401(k) plan sponsor checklist

Annual fiduciary review essentials:

• Confirm plan fees are “reasonable” per DOL guidance.
• Benchmark service providers and investment performance.
• Review plan governance documents and committee minutes.
• Verify that fiduciary roles are clearly assigned and documented.
• Work with a fiduciary financial advisor to document the review.

Maintaining fiduciary duty is required under ERISA.

9. Plan ahead for next year

Once year-end tasks are complete, employers should set goals for plan improvement. They may want to consider the following enhancements:

• Adding automatic enrollment or escalation
• Offering Roth match options
• Implementing student loan matching under SECURE 2.0
• Expanding financial wellness or advice programs

Key year-end 401(k) deadlines for plan sponsors

Key 401(k) deadlines include December 1 for participant notices and December 31 for RMDs, safe harbor adoption and contribution corrections. Preparing early with automated alerts helps plan sponsors stay compliant.

Deadline	Task	Details
December 1	Distribute required participant notices	Safe harbor, QDIA, auto-enrollment notices for Jan. 1 plans
December 31	Process RMDs	Required for eligible participants
December 31	Adopt safe harbor plan (if applicable)	SECURE 2.0 allows late adoption
December 31	Correct contribution errors	Must be resolved before year’s end
January 31	Provide W-2 forms	Include deferral and match reporting
March 15/July 31	Complete compliance testing and Form 5500	Early preparation reduces stress

ADP payroll and retirement plan solutions provide automated reminders, compliance alerts and real-time reconciliation that can help plan sponsors meet every deadline with confidence.

Frequently asked questions

Plan sponsors often ask about the frequency of plan reviews and how to manage missing participants. Regular reviews and proactive data management help ensure plans are compliant and participant records are up to date.

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