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...

SECURE Act 2.0 introduces new rules applicable to 401(k) plan catch-up contributions that will take effect in 2026. This Alert provides a brief explanation of catch-up contributions and actions which plan sponsors and employers need to take now to address this change in the law. Participants in a 401(k) plan who are age 50 or older by the end of the calendar year can make “catch-up contributions” if they have made their maximum 401(k) contributions for the year. In 2025, the 401(k) contribution is limited to $23,500. The maximum catch-up contribution in 2025 is $7,500 , with an exception for participants ages 60-63 whose catch-up contribution limit in 2025 is $11,250 . These dollar amounts are subject to cost-of-living adjustments. In 2025, 401(k) and catch-up contributions can be made either on a pre-tax basis or after-tax as a Roth contribution. Investment earnings on both types of catch-up contributions are tax-deferred while they remain in the plan. However, pre-tax catch-up contr...

The IRS has made it easier for retirement plan sponsors to fix common plan mistakes without going through a formal filing process. Under interim guidance in Notice 2023-43, sponsors can now correct a broader range of errors internally -- saving time, cost, and administrative hassle. This expanded self-correction relief, part of the SECURE 2.0 Act, is available immediately and gives plan sponsors more flexibility, provided that certain conditions are met. Expanded Self-Correction Authority Now in Effect Effective immediately and continuing until Rev. Proc. 2021-30 is formally updated, plan sponsors may self-correct “eligible inadvertent failures,” including some plan loan failures, under the interim framework. This expansion covers certain failures that previously required formal correction through the Voluntary Correction Program (VCP), which required filing with the IRS and paying a user fee. Conditions for Self-Correction of Eligible Inadvertent Failures To self-correct under the ex...

  Changes help employers, plan officials comply with law, protect workers’ benefits WASHINGTON  – The U.S. Department of Labor announced that its Employee Benefits Security Administration today announced  updates to its Voluntary Fiduciary Correction Program  providing employers and other plan officials with more efficient ways to voluntarily correct compliance issues in retirement, health and other employee benefit plans.  The most si gnificant change is a self-correction tool that employers and other plan officials can use to remedy delays in sending participant contributions, such as employee payroll deductions, and participant loan repayments to retirement plans . Employers and other plan officials can also fix mistakes related to participant loans from retirement plans, as provided by the SECURE 2.0 Act.  “The Employee Benefits Security Administration is pleased to provide these improvements to our Voluntary Fiduciary Correction Program so that employe...

  WASHINGTON  – The U.S. Department of Labor’s  Employee Benefits Security Administration  today issued a notice requesting information from retirement plan administrators that will allow it to begin populating the Retirement Savings Lost and Found database, an online search tool to help America’s workers locate lost retirement savings they earned. Retirement plans, including pension and 401(k) plans, sometimes lose track of retirement plan participants owed benefits. These people are known as “missing participants.” Retirement plans lose track of missing participants for a variety of reasons, including incomplete recordkeeping and workers changing jobs. In other cases, workers may lose track of their retirement plans after their former employer goes out of business or when companies merge. The SECURE 2.0 Act directed EBSA to establish the Retirement Savings Lost and Found database to help missing participants and their beneficiaries find their retirement benefits . ...