Starting January 1, 2026, all catch-up contributions for employees aged 50 and older who earn more than $145,000 in FICA wages in the prior year must be made as Roth contributions. This means these contributions will be made on an after-tax basis.

• Effective Date: January 1, 2026
• Applicability: Participants who earned greater than $145,000 in FICA wages in the prior year.
• Impacted Contribution Type: Roth (after-tax) age 50 catch up contributions.
• Action Required: Plan sponsors may need to update their Plan and payroll systems to accommodate this change. More details to follow on the timing.

Final guidance from the IRS is still pending, but to ensure you are compliant with the new rule, we recommend starting to prepare now. Here are some questions to ask:

1. Are you or your payroll provider prepared to track FICA wages threshold to identify employees subject to the Roth age 50 catchup mandate?
2. Does my plan allow Roth contributions?
3. What and when do I need to communicate to my participants?

We appreciate your attention to this important update. We understand that changes like these can be challenging, but we are here to support you every step of the way. If you have any questions or need assistance, please do not hesitate to reach out to us.