IRS Releases Final Regulations on Roth Catch-Up Rule and other Secure 2.0 Provisions
On September 15, 2025, the Internal Revenue Service (“IRS”) and the Treasury issued final regulations addressing several provisions under the Secure Act of 2022 (“SECURE Act 2.0”) relating to catch-up contribution rules applicable to certain high earning employees age 50+, and “super catch-up contributions” for high earning employees between the ages of 60 to 63.
The benefit of offering catch-up and “super catch-up” contributions for older participants is that it enables them to catch up on their retirement savings faster as they approach retirement age, beyond the standard contribution limits, particularly those who began saving for retirement at a later age.
The final regulations introduced the following changes pertaining to catch-up and super catch-up contributions:
Mandatory Roth Treatment of Catch-Up Contributions for High Earners
Under the final regulations, catch-up contributions made by participants who earned $150,000 or more in FICA wages from their employer in 2025 are now required to be made on a Roth basis. While traditional catch-up contributions are pre-tax, contributions made on a Roth basis are post-tax. While the Final Regulations generally apply to taxable years after December 31, 2026, the statutory requirement applies for taxable years beginning on or after January 1, 2026. However, prior to 2027, the final regulations allow plans to implement the Roth catch-up provision in accordance with reasonable, good-faith interpretation of the statutory provisions. Collectively bargained plans and governmental plans may have additional time to implement.
Deemed Roth Elections: Plans can now automatically “deem” elections as being made on a Roth basis for participants who are subject to the mandatory Roth catch-up rule. With a deemed Roth election, a participant’s designation of any elective deferrals that are catch-up contributions are treated automatically as Roth. However, a plan that uses the “deemed” Roth election approach must give the participant the opportunity to opt-out of the deemed Roth election. If a participant opts-out, the participant can no longer make catch-up contributions.
While plans are not required to offer a Roth election option, plans without a Roth option can only allow catch-up contributions from participants with FICA wages below $150,000, earned in 2025. If a plan does not allow Roth, excess contributions not treated as Roth may need to be refunded instead of reclassified as catch-up contributions.
Elective “Super” Catch-Up Contributions:
Plans can permit a higher catch-up contribution limit (“super” catch up) for employees who attain age 60 through 63 during the plan year. The increased catch-up limit for 401(k), 403(b), and 457(b) governmental plans is 150 percent of the current catch-up limit. For example, the current catch-up limit in 2025 is $7,500, which means the super catch-up limit for those who attain age 60 to 63 during the plan year is increased to $11,250 for 2025.
This increase limit will remain the same in 2026, as announced in an IRS news release on November 13, 2025. The provisions related to super catch-up contributions are optional. The Final Regulations permitted plans to begin offering super catch-ups starting in plan years after December 31, 2024, with the regulations effective for taxable years after December 31, 2026. The regulations do not provide a reasonable, good faith standard for these provisions prior to the applicable effective date.
Your Ally in Managing Growing Fiduciary Exposure
At Zenith American Solutions, we recognize that evolving IRS regulations, such as the mandatory Roth catch-up requirements, create not only operational demands but also meaningful fiduciary exposure for jointly managed plans. We are dedicated to supporting our clients by ensuring these changes are implemented accurately, supported by proper documentation, and clearly communicated to participants. By aligning administration, compliance, and communication, we help boards mitigate fiduciary risk and protect the long-term integrity of the plans they oversee.