Posted on Aug 28, 2023

The Internal Revenue Service (IRS) has just granted a two-year delay of the provisions in the SECURE 2.0 Act addressing Roth catch-up contributions. Specifically, this notice results in two important changes for employers and plan participants:

  • A technical error in the legislation has been addressed so that catch-up contributions can continue beyond 2023.
  • The mandate that individuals earning $145,000 or more can only make catch-up contributions to a Roth account in 2024 has been delayed for two years. Individuals may make catch-up contributions on a pre-tax basis during 2024 and 2025 regardless of their income.

This two-year transition period gives employers, sponsors, and record-keepers more time to prepare, especially for those employers who do not currently allow Roth deferrals in their retirement plans. 

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