Three major recent industry surveys, Fidelity, Vanguard and the Plan Sponsor Council of America (PSCA), highlight notable shifts in retirement plan design heading into 2026. Below are six trends plan sponsors should watch, and how they may shape plan strategy going forward.
Here’s What You Really Need to Know
- The survey findings offer an important competitive benchmark for plan sponsors evaluating benefits strategy, talent attraction positioning and participant readiness for long-term retirement success.
- The surveys show that themes are clear: Roth adoption is accelerating, eligibility windows are shrinking, automatic enrollment is becoming standard, and default contribution rates are rising. Meanwhile, optional SECURE 2.0 features are gaining traction slowly, with significant generational differences in uptake and awareness.
- The surveys also reflect an increased interest in cybersecurity issues, which indicates an issue that should be top of mind for plan sponsors in selecting and monitoring service providers, as well as securing their own systems with participant data.
Let’s Dive In
The surveys conducted by Vanguard and Fidelity provide insights into plan design trends and participant behaviors, specifically from the plans they record-keep, offering a view that reflects their client base.[i] In contrast, the PSCA survey aggregates data across multiple recordkeeping platforms, giving a broader perspective on industry-wide practices and participant activity.[ii] This distinction is important because Vanguard and Fidelity’s findings may highlight patterns unique to their demographics or service models, whereas PSCA’s results capture a more diverse cross-section of retirement plans and providers.
Trend One: Roth Takes Center Stage
It is likely no surprise that the utilization of Roth contributions is becoming increasingly common. The surveys show that Roth availability is nearly universal. At year-end 2024, 86 percent of Vanguard plans offered a Roth contribution option, and 18 percent of participants in these plans elected to use it, an all-time high. Additionally, 36 percent of plans now offer Roth in-plan conversions (RIPCs), and 10 percent include an automatic RIPC feature to help participants maximize their retirement savings.
Why the growing popularity? Roth contributions are made with after-tax dollars, grow tax-free within the plan, and allow tax-free withdrawals in retirement. They also provide tax diversification alongside pre-tax contributions. Roth in-plan conversions have gained traction because they enable participants to convert pre-tax contributions to Roth without moving the money out of the plan. Taxes are due the year of the conversion, but once converted, the funds grow tax-free and can be withdrawn tax-free in retirement.
SECURE 2.0 expanded options for Roth contributions by allowing employer contributions to be elected as Roth. Adoption is growing, with 20 percent of responding plans now offering this feature, up from 13 percent last year.
Roth generational trends are clear: Fidelity reports that 20 percent of Gen Z 401(k) participants choose Roth contributions, compared with just 13 percent of Boomers.
What This Means for Plan Design: Younger workers are driving Roth growth, and new Roth catch-up rules from Section 603 of SECURE 2.0 are likely to accelerate growth in the years ahead.
Trend Two: Eligibility and Vesting Accelerate
Eligibility sets the foundation for the plan by determining when employees may start participating and saving for their future. In 2015, 66 percent of Vanguard record-kept plans offered immediate eligibility, and by 2024, that figure had risen to 76 percent. The PSCA survey shows similar progress: nearly half (47.3 percent) of the respondents now offer immediate eligibility, and among plans with more than 5,000 participants, the number jumps to 74.3 percent.
Vesting trends are changing. Vesting determines when employees fully own the employer contributions in their 401(k) accounts. Nearly half of Vanguard plans now give participants immediate ownership of employer matching contributions. However, some plans still require employees to stay with the company for a certain period before they are fully vested.
What This Means for Plan Design: Immediate participation (and even immediate vesting) is becoming a competitive baseline — especially for large employers attracting early-career talent.
Trend Three: Automatic Enrollment Becomes the Default
By year-end 2024, 61 percent of Vanguard defined contribution (DC) plans had adopted automatic enrollment. The PSCA survey results show similar trends: 64.3 percent of respondents to the PSCA survey now use automatic enrollment, rising to 71.6 percent among plans with more than 5,000 participants. Most plans (95.6 percent) apply automatic enrollment to new hires, while about 13 percent re-enroll all non-participants annually.
The impact is significant: Vanguard plans with automatic enrollment achieved a 94 percent participation rate versus 64 percent for voluntary enrollment plans. PSCA data shows a similar gap, 92.8 percent versus 78.8 percent. However, the average deferral rates were slightly lower in automatic enrollment plans, (7.5 percent vs. 8 percent) likely due to conservative default settings.
What This Means for Plan Design: Automatic enrollment drives participation, and under SECURE 2.0, will be mandatory for most new plans, so expect an increase in adoption in the coming years.
Trend Four: Automatic Enrollment Default Savings Rates Rise
For plans with automatic enrollment, the default contribution rates are rising. In the PSCA survey, 29.7 percent of plans now set the automatic enrollment default to 6 percent, compared with 33.8 percent that still use 3 percent. Vanguard data shows similar movement: 30 percent of plans default enroll at 6 percent or more, versus 33 percent that still use 3 percent. Additionally, 69 percent of plans automatically increase contribution rates annually via the auto-escalation feature that may be added to the plan design.
What This Means for Plan Design: Plans are increasingly setting defaults at levels that better support retirement adequacy — often high enough to capture the full company match. If your plan is still set at 1 or 2 percent as the automatic enrollment rate, it may be a good opportunity to revisit.
Trend Five: Target Date Funds (Still) Rule Default and Managed Accounts Emerging
Target Date Funds (TDFs) remain dominant as the plan’s default investment. The Vanguard survey results show that 84 percent of participants used TDFs, though only 71 percent of those investors held their entire account in a single TDF.
Generational differences are striking. Fidelity reports that 81.1 percent of Gen Z participants invest in TDFs, compared to 45 percent of Boomers.
Managed accounts are gaining traction but remain lightly used. Nearly half (45 percent) of Fidelity survey respondents now offer a managed account option, as do 55 percent of PSCA survey respondents, an increase of 11 percent in three years. Vanguard reports that 45 percent of its DC plans offer managed accounts, including 8 in 10 larger plans. Yet participation and adoption are low: only 9 percent use the service when available.
What This Means for Plan Design: TDFs remain the Qualified Default Investment Alternative (QDIA) of choice. Managed accounts are expanding in availability but have yet to achieve broad engagement.
Trend Six: Auto Portability: Preserving Retirement Savings
Auto portability is a network of leading recordkeepers that automatically roll over a participant’s retirement savings to their new employer plan when they change jobs. Awareness and adoption remain limited. Among the PSCA survey respondents, only 13 percent have joined the auto-portability network, while 32.3 percent have not, 24.4 percent are unsure, and 26.3 percent don’t know what it is.
What This Means for Plan Design: Expect steady growth as network participation increases and rollovers become more turnkey.
Other Key Trends
According to the PSCA survey:
- Student Loan Matching and Emergency Savings: Adoption of SECURE 2.0 optional provisions remain minimal; just 1.9 percent of plans offer student loan matching, and 1.2 percent offer Pension-Linked Emergency Savings Accounts (PLESA).
- Catch-Up Contributions: Three-quarters (73 percent) of plans have adopted the “super” catch-up provisions for workers aged 60-63.
- Cybersecurity: More than one-third of large plans have adopted a cybersecurity guarantee from their recordkeeper, compared with only 13.1 percent of smaller plans. Two-thirds (65 percent) run a cybersecurity awareness campaign.
- Savings Guidance: About one-third of plans provide a suggested savings rate, rising to 45 percent among plans with more than 5,000 participants.
What This Means for Plan Design: Adoption of SECURE 2.0 features are still in early stages, while cybersecurity and savings guidance are becoming standard best practices.
The Bottom Line
The theme across all surveys is momentum. Plans are enrolling faster, vesting sooner, saving more, defaulting smarter — and gradually adopting new SECURE 2.0 features. Leaders who adjust now will be better positioned to compete for talent and support long-term participant outcomes in 2026 and beyond.
Action Items for Plan Sponsors
- Evaluate eligibility, vesting, and default design: If the plan’s contribution rate is below 6 percent or lacks auto-escalation, you’re likely behind your peers. Consider adding automatic enrollment and auto-escalation to the plan design to help increase participation in the plan (but also consider the operational impact of these provisions and prepare accordingly).
- Review the plan design for Roth and Roth-conversion features — particularly for younger workforce segments: If Roth contributions are not yet available in the plan, consider updating the plan design to allow for this option.
- Assess optional SECURE 2.0 provisions for competitive positioning: Optional provisions may be adopted at any time. Consider which optional provisions make sense for the plan to enhance participant outcomes.
- Review cybersecurity practices and recordkeeper guarantees and document oversight: If cybersecurity protocols are not in place, consider establishing protocols that align with the Department of Labor guidelines.
- Evaluate TDFs and managed account offerings: TDFs remain the QDIA of choice, but managed accounts are gaining traction. Consider whether adding or promoting these options could improve participant engagement and outcomes (but remember these are fiduciary decisions that require a prudent process to implement).
- Revisit communication and education strategies: Generational differences in Roth adoption and managed account usage suggest the need for tailored messaging. Ensure participants understand plan features, defaults, and savings strategies.
[i] Vanguard, How America Saves 2025: Data That Leads (report, Vanguard, June 2025), PDF file, accessed November 30, 2025, https://workplace.vanguard.com/content/dam/inst/iig-transformation/insights/pdf/2025/has/2025_How_America_Saves.pdf, Fidelity Investments, Building Financial Futures (report, Fidelity Investments, November 20, 2025), accessed November 30, 2025, https://www.fidelityworkplace.com/s/page-resource?cId=fidelity_building_financial_futures_report
[ii] Plan Sponsor Council of America, Annual 401(k) Survey (report, PSCA, November 12, 2025), PDF file, accessed November 30, 2025, https://www.psca.org/news/psca-news/2025/11/psca-annual-survey-participation-climbs-as-employers-embrace-secure-2.0-flexibility