SECURE 2.0 Act Retirement Plan Update: Roth Catch-Up Contributions in 2026

On September 16, 2025, the U.S. Department of the Treasury and Internal Revenue Service (IRS) issued final regulations implementing the Roth catch-up contribution provisions of the SECURE 2.0 Act of 2022. These provisions require employers to shift the tax treatment for catch-up contributions for higher earners and comply with new administrative obligations, with good faith compliance generally required beginning January 1, 2026.

Roth Treatment Required for Higher Earner Catch-Up Contributions Beginning in 2026.

Beginning in 2026, if a retirement plan participant age 50 or older who earned more than $145,000 in FICA wages from their employer in the prior year elects to make any catch-up contributions, those “higher earner” catch-up contributions will need to be made on a Roth (after-tax) basis. The threshold for who is a higher earner is indexed for inflation. Only wages from the participant’s common law employer count for this purpose, unless the plan document specifically provides for aggregation across related entities, such as common paymasters or controlled group members.

While plans are not required to offer Roth contributions, those that don’t will be prohibited from accepting catch-up contributions from otherwise eligible employees. This provision appears to effectively force sponsors of plans that currently allow only pre-tax catch-up contributions to either (1) amend their plans to permit Roth deferrals, or (2) limit catch-up eligibility to non-highly compensated employees.

Increased Catch-Up Contribution Limits.

The final regulations address two types of catch-up contributions for 401(k) plans: (1) catch-up contributions for employees age 50 or older, and (2) the new “super catch-up” contributions that may be offered to employees ages 60 through 63 beginning in 2025. Importantly, if one employer within a controlled group adopts the optional super catch-up limits, all other plans maintained by the group are required to follow suit under the universal availability rule.

There is a carve-out for collectively bargained employees: employers may offer super catch-up contributions to non-union employees while keeping union employees subject to the standard catch-up limit without violating the universal availability requirement.

Applicability and Compliance Deadlines.

While the Roth catch-up contribution requirement for higher earners becomes effective in 2026, the final regulations themselves are not effective until 2027. In the meantime, the IRS will apply a reasonable, good faith compliance standard through the end of 2026.

Employers that sponsor governmental plans or plans maintained pursuant to collective bargaining agreements benefit from later applicability dates, depending on legislative or contractual timelines.

Plan amendments reflecting these changes must generally be adopted by December 31, 2026, though the deadline is extended to 2028 for collectively bargained plans and 2029 for governmental plans.

Special Rules for 403(b) Plans, SIMPLE, and Governmental 457(b) Plans.

Sponsors of 403(b), SIMPLE, and governmental 457(b) plans should note that certain different rules and exceptions apply under SECURE 2.0 and final regulations.

For 403(b) plans, the special 15-year catch-up contribution, which is available to long-term employees with at least 15 years of service, is not subject to the Roth-only requirement, even if the participant earned over the FICA wage threshold in the prior year. A 403(b) plan may allow participants to make both (1) the special 15-year catch-up contributions, and (2) age-based catch-up contributions (i.e., the age 50+ catch-up and age 60–63 “super catch-up”) in the same year. In such cases, any catch-up amounts will be applied first to the 15-year special catch-up, and then to the age-based catch-up limits. The age 60–63 super catch-up is available in addition to the 15-year catch-up.

For governmental 457(b) plans, the special catch-up contributions allowed during the three years prior to normal retirement age are exempt from the Roth-only requirement. Any catch-up contributions for higher earners that exceed these special catch-up contribution limits are required to be made on a Roth basis.

For SIMPLE plans, the final regulations clarify that the age 60–63 super catch-up limit and the 10% increase to the standard catch-up limit cannot be combined for the same participant in the same year. A SIMPLE plan may choose to offer the higher of the two limits but not both simultaneously.

Next Steps for Plan Sponsors.

With the final regulations in place, employers should begin preparing now for operational and document compliance. Key action items include:

• Determining whether Roth contributions will be added to the plan if not already available.
• Coordinating with recordkeepers and payroll providers to ensure systems are ready to administer Roth catch-ups.
• Amending plan documents by the December 31, 2026 (or later) deadline.
• Developing participant communications explaining the impact of the new rules.

The 2026 annual limits on catch-up contributions are expected to be released soon.