The SECURE 2.0 Act of 2022 includes a provision that requires catch-up eligible participants with Federal Insurance Contributions Act (FICA) wages of more than $145,000 (indexed) in the preceding calendar year to make catch-up contributions as Roth contributions starting in 2024.
In response to plan sponsor concerns about being able to timely implement this change, the IRS issued Notice 2023-62. The Notice provides a two-year administrative transition period so plan sponsors, payroll providers, and recordkeepers have more time to modify systems and procedures. As a result, catch-up contributions made in 2024 and 2025 will be treated as satisfying SECURE 2.0, even if the contributions are not designated as Roth contributions and a plan does not provide for Roth catch-up contributions.
The IRS intends to issue additional guidance regarding SECURE 2.0’s Roth catch-up contributions requirement to assist plan sponsors and service providers in implementing the change.