Not-for-Profit 403(b) Plans: Navigating the 2026 IRS Restatement & Roth Mandates
By Tim Hayes, Financial Advisor for the Public and Not-for-Profit Sector
What?
Between the One Big Beautiful Bill and the IRS 2026 deadline, non-profits are being hit from both sides. You have a mandatory requirement to rewrite your 403(b) plan by December 31, 2026, and a new Roth Mandate that most legacy systems can’t handle. At the same time, your major donors are facing a new tax floor that could change how they support your mission.
So What?
If you sign what the plan provider sends you, you might be locking yourself into another decade of high fees and administrative headaches. You’re doing the work of a restatement but getting none of the benefits of a modern plan. And if your payroll isn’t ready for the 2026 Roth rules, your highest-paid staff — the people you can’t afford to lose — will be the ones who get penalized.
Now What?
Use the 2026 deadline as a catalyst to upgrade. I don’t do audits — I do a side-by-side compliance and cost review. I’ll get you on track for December 31, solve your Roth payroll glitch, and show you how to move to a transparent, fiduciary model that puts your mission first.
What the Deadline Actually Means for Your Organization
The 2026 restatement is your opportunity to find out what your plan is actually costing your employees. Before you sign anything, I review your fees, investments, and options so you can decide whether to stay or switch.
Your plan provider is charging fees your employees rarely notice. Since you have to sign a new document anyway, this is your best chance to move to Vanguard or Fidelity with a flat-fee administrator. Instead of your staff paying a “tax” on their growth, they pay a simple, transparent fee for the service. Your employees keep more of their returns, and you fulfill your fiduciary duty. You get a modern plan without the “insurance-wrapped” drag.
Your payroll needs one fix before January 1, 2026. Employees over $150k must route catch-up contributions into Roth starting next year. If it is not set up correctly, your highest earners can’t contribute and HR gets the blame. I coordinate the fix before it becomes a crisis.
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I have been working with Tim for over 30 years. At all times Tim has made himself available to answer any of my questions or concerns. His explanations on market trends have always been thorough and helpful.
Kathy Rodger
Client
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Pre-Approved vs. Individually Designed 403(b) Plans: What's Your Deadline?
Pull out your plan document and look for the Adoption Agreement.
Check boxes on the front page? You have a pre-approved plan. Your document must be restated by December 31, 2026 — no exceptions.
Custom-written legal document with no check boxes? You have an individually designed plan. You have more flexibility on the restatement itself, but you must still adopt SECURE 2.0 and One Big Beautiful Bill amendments by December 31, 2026.
Either way, something needs to be signed before December 31. The pre-approved plan has the harder deadline. The individually designed plan has more options — but the same date.
What Is a Restatement and Why Does It Matter?
Your 403(b) plan runs on a legal document. The law changed. Here is what needs to be added:
- SECURE Act and SECURE 2.0 updates
- Required Minimum Distribution age changes
- Part-time employee eligibility rules
- Hardship distribution and loan updates
If your document does not reflect these changes your tax-exempt status is at risk even if your plan is running fine.
Your 2026 Deadline:
- Pre-approved plan: Your document must be restated by December 31, 2026.
- Individually designed plan: You must sign SECURE 2.0 and One Big Beautiful Bill amendments by December 31, 2026.
Either way something needs to be signed. The question is whether you sign what your provider sends — or take a closer look first.
You only have five months left; let me help you get it done.
These are the opinions of Financial Advisor Tim Hayes and not necessarily those of Cambridge Investment Research. They are for informational purposes only and should not be construed or acted upon as individualized investment advice. Content provided via links to third-party sites should not be considered an endorsement of content that we cannot verify completeness or accuracy of.