Upcoming Change to Retirement Plan Catch-up Contributions
Under the federal SECURE 2.0 Act, a new rule requires that catch-up contributions made by highly compensated employees be made on a Roth after-tax basis. While this requirement was originally set to take effect earlier, implementation was delayed until January 1, 2026 to give employers and recordkeepers time to prepare.
Employees with 2025 W-2 FICA earnings from the university of $150,000 or more– You may continue to contribute pre-tax dollars to the University’s 403(b) and 457(b) Plans up to the IRS annual maximum (the same as all employees). However, Age 50 catch-up contributions and special Age 60–63 “super” catch-up contributions must be made with after-tax Roth dollars.
The $150,000 threshold will be adjusted annually by the IRS. Toward the end of each year, HR sends a universal availability notice that includes the updated IRS limits for the upcoming year.
HR is coordinating with our systems teams to ensure compliance by January 1, 2026. Employees subject to this requirement will be notified after 2025 W-2s are issued. We expect that no action will be required on your part – catch-up contributions will automatically shift from pre-tax to Roth for those who are required to make catch-up contributions with Roth after-tax dollars.
All employees can start, stop, or change their elective deferrals to the retirement plans at any time through UBenefits.