As the SECURE 2.0 Act deadline for mandatory catch-up contributions for some plan participants looms, many retirement plan sponsors are beginning to amend their plan documents to meet its requirements. Under this SECURE 2.0 Act provision, plan participants aged 50 and older who meet certain higher earnings thresholds in the prior year must make any allowable catch-up contributions as designated Roth contributions. The applicable earnings threshold for 2026 is $150,000 in the prior year’s wages.
The mandatory Roth catch-up requirement originally applied to 2024, but the Internal Revenue Service (IRS) and the Treasury Department implemented transitional relief. As a result, the requirement became effective for contributions made in tax years beginning after December 31, 2025, which, for many plans, means January 1, 2026. More specifically, the catch-up requirement applies to contributions made in any taxable year that begins after December 31, 2026. Still, plans may implement the requirement earlier in 2026 based on their reasonable interpretation of the Act.
Plans must implement this change by adopting amendments to reflect the new rules no later than December 31, 2026. However, the deadline is extended by an additional two years — until December 31, 2028 — for plans subject to collective bargaining agreements. Some governmental plans have even later implementation dates.
Furthermore, if a plan does not currently allow Roth contributions, it must either amend the plan to add them if it wants to continue allowing higher earners to make catch-up contributions. Otherwise, the plan must restrict catch-up contributions for those plan participants.
The required changes go beyond modifications to plan documents. Plan sponsors, recordkeepers, and third-party administrators must amend contribution election processes, payroll interfaces, and participant communications before the end of the year. Other tasks include identifying participants subject to the new requirements, ensuring that catch-up contributions correctly go to Roth accounts, and advising participants about the changes.
SECURE Act 2.0 does not apply to SIMPLE IRA plans. Additionally, the law does not require that plans offer catch-up contributions at all. However, if the employer wishes to offer catch-up contributions, it must designate them as Roth contributions.
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