Compliance Stuff

Takeaways Generally, plan sponsors should be prepared to implement the Roth catch-up rule for taxable years beginning after December 31, 2025 (i.e., January 1, 2026, for calendar year plans).  This will require coordination with ERISA counsel, the company’s payroll provider, and the plan’s recordkeeper and third-party administrator. Be prepared to discover mistakes and correct them quickly. Related Links Catch-Up Contributions Final Regulations Notice 2023-62 Article On September 16, 2025, the Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) issued Final Regulations (Treasury Decision 10033) under Section 603 of the SECURE 2.0 Act. Section 603, as enacted, generally requires that catch-up-eligible participants whose prior-year FICA wages exceeded $145,000 (as indexed) make all catch-up contributions as designated Roth contributions for taxable years beginning after December 31, 2023.  However, in Notice 2023-62, the IRS provided an administrative...

Recently, the Department of the Treasury and the IRS issued the long-awaited final regulations regarding the provisions of SECURE 2.0 relating to catch-up contributions made by participants in qualified defined contribution plans (including 401(k), 403(b), and governmental 457(b) plans) (the “ Final Regulation s”). In general, the Final Regulations followed the proposed regulations that were published in January. However, the IRS did make some key changes in the Final Regulations in response to comments submitted after the proposed regulations were published. Notably, despite pressure from plan sponsors and service providers, the IRS did not extend the administrative transition period with respect to required Roth catch-up contributions for certain higher paid catch-up eligible employees. Accordingly, the required Roth catch-up rules become mandatory effective January 1, 2026, for plans with calendar year plan years . However, the Final Regulations do provide some relief for reasonable...