IRS Releases Final Regulations on Roth Catch-Up Contributions

On September 15th, 2025, the IRS released final regulations on new Roth catch-up contribution rule from SECURE 2.0.[1]

On September 15, 2025, the IRS released final regulations clarifying the new Roth catch-up contribution rule established by SECURE 2.0. These regulations provide definitive guidance on catch-up contribution provisions, with significant implications for individuals aged 50 and older earning more than $150,000** in the prior year, as well as employees aged 60–63 who may exceed standard catch-up limits. Both retirement plan sponsors and participants should proactively prepare for these changes.

Background on Catch-Up Contribution Provision

SECURE 2.0, enacted in December 2022, introduced substantial reforms to U.S. retirement plans. While many provisions have already taken effect, several key changes are addressed in the new IRS regulations:

• Section 109: Increases catch-up contribution limits for participants aged 60–63.
• Section 117: Raises catch-up contribution limits for employees in SIMPLE plans.
• Section 603: Requires highly compensated employees to make catch-up contributions as Roth contributions.

Originally, the Mandatory Roth Catch-Up was to apply for taxable years beginning after December 31, 2023. Later, IRS Notice 2023-62 provided an administrative transition period, set to expire at the end of 2025.

While the regulations are generally not effective until 2027, the Mandatory Roth Catch-Up Requirement is still required to be implemented as of January 1, 2026. Prior to 2027, a reasonable, good faith interpretation standard applies with respect to the administration and operation of the Mandatory Roth Catch-Up Requirement.

Important Dates

• January 1, 2024 – Initial effective date for Mandatory Roth Catch Up; later extended for administrative transition period.
• December 31, 2025 – The closing of the administrative transition period
• January 1, 2026 – Mandatory Roth Catch-Up contributions effective
• January 1, 2027 – Final regulations effective

Impact on Retirement Plans

Plan sponsors must ensure their systems are equipped to process Roth catch-up contributions for eligible participants. This requires close coordination with retirement plan advisers, recordkeepers, and payroll providers to update all relevant processes. Additionally, sponsors should communicate these regulatory changes to participants well in advance, enabling employees to adjust their contribution elections and maintain compliance.

Impact on Participants

Participants should review and update their contribution elections to comply with the new regulations. For certain employees, catch-up contributions will transition from pre-tax to Roth, making it essential to understand the mechanics of Roth contributions and their impact on annual tax planning.

Possible Corrections

Failure to not comply with these new guidelines may result in operational issues requiring corrective action. The IRS permits self-correction of certain operational failures, with detailed procedures outlined in the regulations. Promptly addressing errors can help avoid further penalties or disqualification.

For additional insights on changes affecting retirement plans, read our blog post: “Trump’s 2025 Executive Order Opens Doors to Private market and Digital Assets for Retirement Plans.”

Investment advice offered through OneDigital Investment Advisors LLC.

**Number updated as of 11/13/25[3]

Sources:
[1]IRS, “Treasury, IRS issue final regulations on new Roth catch-up rule, other SECURE 2.0 Act provisions”
[2]National Association of Plan Advisors, “Breaking News: IRS Releases Final Roth Catch-Up Regulations”
[1]IRS, “Notice 2025-67”
ID: 00319664