On Sept. 15, 2025, the Department of Treasury and the Internal Revenue Service released final regulations implementing the SECURE 2.0 Act’s catch-up contribution provisions, generally effective for plan years beginning on or after Dec. 31, 2026. These rules clarify the mandatory Roth catch-up contribution requirement for higher-income participants and the optional enhanced catch-up provisions for participants ages 60 through 63.
Background
Catch-up contributions allow retirement plan participants ages 50 or older to contribute above the standard elective deferral limits. SECURE 2.0 modified these rules, notably by requiring higher-income participants to make catch-up contributions on a Roth basis and by creating a new, enhanced catch-up limit, or “super catch-up,” for participants ages 60, 61, 62 and 63. The final regulations provide guidance on SECURE 2.0 changes to catch-up contributions under Sections 401(k), 403(b), 414(v), and 457(b) of the Internal Revenue Code.
Below is an overview of the final regulations, highlighting key compliance and design implications for plan sponsors.
Rothification Requirement — Mandatory for Applicable Plans
Beginning as early as Jan. 1, 2026, participants whose prior-year FICA wages from the plan sponsor exceed $145,000 (adjusted annually for inflation) generally must make their catch-up contributions as Roth contributions, unless the plan is a collectively bargained multiemployer plan. If a plan does not permit Roth contributions, these high-wage participants will not be permitted to make catch-up contributions.
Plans may treat high-wage earners’ catch-up contributions as automatically Roth-designated, but they still must allow participants the opportunity to change or cease their catch-up contribution elections or Roth treatment. The deemed election ends if the participant no longer qualifies as a high-wage earner (e.g., via an amended Form W-2).
When determining high-wage earner status, the “sponsoring employer” is generally the participant’s common-law employer. However, for administrative ease and consistency, wages from multiple employers in the same controlled group or from a common paymaster can be aggregated so long as the plan document specifies.
Plans offering catch-ups to high-wage earners must allow all catch-up-eligible participants (ages 50 and older) to make Roth catch-ups to meet nondiscrimination rules.
General Applicability Date: All non-collectively bargained plans must implement the Roth catch-up mandate for taxable years after Dec. 31, 2025. However, prior to the effective date of the final regulations, plans may implement a reasonable, good-faith interpretation of the statutory provisions to comply with the Roth catch-up provision.
Special Applicability Dates: Applicability dates differ for the following plans:
- Non-Collectively Bargained Multiemployer Plans — Plan years beginning after Dec. 31, 2026.
- Collectively Bargained Plans — The later of Dec. 31, 2026, or the end of the last collectively bargained agreement in effect on Dec. 31, 2025 (or publication date for multiemployer plans).
- Governmental Plans — The later of Dec. 31, 2026, or after the first legislative session post-Dec. 31, 2025.
Correcting Operational Failures:
The final regulations contain two methods to correct a failure to comply with the Rothification requirement:
- Form W-2 Method — This method involves transferring excess pre-tax catch-ups to Roth accounts (with earnings) and reporting on Form W-2 for the deferral year, provided the Form W-2 has not yet been filed or furnished.
- In-Plan Roth Rollover — This method consists of rolling over excess contributions (with earnings) and reporting on Form 1099-R for the rollover year. The plan must describe how this correction method applies, but it is not required to otherwise permit in-plan Roth rollovers.
Super Catch-up Provision — Optional Design Feature
The final regulations also address certain aspects of the super catch-up concept added in SECURE 2.0. Catch-up-eligible participants attaining ages 60, 61, 62 or 63 in a given tax year may contribute up to (i) the greater of $10,000 (non-SIMPLE plans) or $5,000 (SIMPLE plans), or (ii) 150% of the standard catch-up limit (e.g., $11,250 for non-SIMPLE in 2025, subject to cost-of-living adjustment in future years). Plans are not required to offer this higher limit, but if they do, it must be offered consistently to all eligible participants (with a limited exception for employees covered by a collective bargaining agreement) and by all plans sponsored by members of the same control group.
Applicability Date: Plans may voluntarily implement these super catch-up provisions as early as Jan. 1, 2025. Under SECURE 2.0’s general amendment deadline extended by Notice 2024-2, plan amendments are generally due by Dec. 31, 2026, with additional extensions for collectively bargained and governmental plans.
Key Takeaways for Plan Sponsors
These changes bring about significant administrative complexities, such as integrating payroll systems, communicating with participants and potentially amending plans. Amendments are generally expected to be completed by Dec. 31, 2026. Key considerations include:
- Plan sponsors should review their plan documents to: (i) implement a “deemed Roth election” that automatically treats high-earner catch-ups as Roth, (ii) specify whether wages from multiple employers in a controlled group or from a common paymaster will be aggregated when determining high-earner status, (iii) describe any super catch-up opportunity for individuals aged 60 to 63 and (iv) describe any in-plan rollover feature that it may consider as a method of correction.
- Plan sponsors should revise their employee communications (e.g., summary plan descriptions and participant notices) to describe the deemed Roth election and any increased catch-up contribution opportunities.
- Plan sponsors should work with recordkeepers and payroll providers to ensure they understand system capabilities, implementation timing and information sharing.