SECURE 2.0 Catch-Up Contribution Rule Changes

1/23/2024 8:00:00 AM

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Under current law, employers may allow participants age 50 and older to make catch-up contributions on a pretax or Roth basis. SECURE 2.0 requires that all catch-up contributions for a participant whose FICA wages for the prior year exceed $145,000 (indexed beginning in 2025) be made on a Roth basis. SECURE 2.0 technically required that this rule go into effect beginning January 1, 2024. Subsequent to SECURE 2.0, however, the Internal Revenue Service (IRS) issued guidance that effectively delays this date to January 1, 2026. During this two-year delay, catch-up contributions will be treated as satisfying the requirements under SECURE 2.0, whether or not they are designated as Roth contributions.

Affected Plan Types

Although this provision affects participants in 401(k), 403(b), and governmental 457(b) plans, it does not apply to the special catch-up contributions permitted under 403(b) and governmental 457(b) plans. This provision does not apply to SEP plans or SIMPLE IRA plans. Possible Plan Design Implications Employers may decide to use one of the following plan design options to maintain compliance with the new Roth catch-up contribution requirement:

  • Employers who allow catch-up contributions will need to offer a Roth deferral feature.
  • Employers who don’t want to offer a Roth deferral feature will need to remove the catch-up contribution feature.

This new rule will require changes in plan operations and additional communication with service providers so that contributions can be properly categorized. Participants will need to be informed of the changes, as well.

Additional Guidance

There are several outstanding questions surrounding the Roth catch-up contribution requirement. The IRS has indicated that it will release additional guidance, which should help employers, recordkeepers, third-party administrators and payroll providers to comply with this SECURE 2.0 provision.

Questions on how this new rule will affect your business? Reach out to your Bell Bank Retirement Plan Consultant.

Interested in learning more about the retirement offerings at Bell? Email Mike Kobbervig, SVP/Retirement Plan Services Division Manager, at to start the conversation.


This material is for informational purposes only and is not intended – nor should it be relied on – as legal, tax, accounting or investment advice.

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