Compliance Stuff

  Beginning January 1, 2026, age 50+ catch‑up contributions for “high‑paid participants” of 401(k), 403(b), and governmental 457(b) retirement plans must be made on a Roth basis. As a result, employers must identify who is a “high-paid participant” and ensure that corresponding catch-up contributions are characterized as Roth — even if a participant’s standing catch-up deferral election is pre‑tax.   The Internal Revenue Service (IRS) recently released final regulations   implementing the mandatory Roth catch-up, which will create pressure points for payroll systems, retirement plan recordkeepers, and plan sponsors. This update summarizes the new mandatory Roth catch-up requirement, highlights selected issues for payroll and human resources to consider, and recommends solutions to reduce compliance risk.  The New Mandatory Roth Catch‑Up Rule Under final IRS regulations, a catch‑up eligible participant with FICA wages paid by applicable employer(s) above a wage thresh...

The Internal Revenue Service recently announced its cost-of-living adjustments applicable to dollar limitations on benefits and contributions for retirement plans generally effective for Tax Year 2026 (see IRS  Notice 2025-67 ). Most notably, the limitation on annual salary deferrals into a 401(k) or 403(b) plan will increase to  $24,500,  and the dollar threshold for highly compensated employees will increase to  $160,000 .  The more significant dollar limits for 2026 are as follows: LIMIT 2025 2026 401(k)/403(b) Elective Deferral Limit (IRC § 402(g))  The annual limit on an employee’s elective deferrals to a 401(k) or 403(b) plan made through salary reduction. $23,500 $24,500 Government/Tax Exempt Deferral Limit (IRC § 457(e)(15))  The annual limit on an employee’s elective deferrals concerning Section 457 deferred compensation plans of state and local governments and tax-exempt organizations. $23,500 $24,500 401(k)/403(b)/457 Catch-up Limit (IRC § 4...

The Internal Revenue Service recently announced its cost-of-living adjustments applicable to dollar limitations on benefits and contributions for retirement plans generally effective for Tax Year 2025 (see IRS  Notice 2024-80 ). Most notably, the limitation on annual salary deferrals into a 401(k) or 403(b) plan will increase to  $23,500 , and the dollar threshold for highly compensated employees will increase to  $160,000 . This year’s notice also includes the optional SECURE 2.0 Super Catch-up amounts for participants ages 61-63.  The more significant dollar limits for 2025 are [ included on this spreadsheet ]. Source(s): JacksonLewis , received on November 4, 2024.