No Items in Cart 
On September 15th, 2025, the Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) issued final regulations regarding retirement catch-up rules. Specifically, the regulations address several provisions of the SECURE 2.0 Act relating to catch-up contributions. According to the IRS, retirement catch-up rules allow employees aged 50 or older to make additional contributions under a 401(k) or similar workplace retirement plan. Earlier this month, the Treasury released a preliminary list of occupations that are affected by the new “No Tax on Tips” deduction.
Background of the SECURE 2.0 Act
Three years after the signing of the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act), President Joseph R. Biden signed the SECURE 2.0 Act. Markedly, this Act made further revisions to some of the statutes under the original SECURE Act. These included several changes affecting retirement plans, plan sponsors, and plan providers. These revisions included:
- Incremental increases to the age requirement of terminated participants after which required minimum distributions (RMDs) must begin;
- Offering small financial incentives for contributions, provided that the incentives are de minimis and not paid for with plan assets;
- Allowing employer contributions to be treated as Roth after-tax contributions if the employee elects; and
- Plan overpayment recovery limits.
Effective dates for those revisions ranged from immediate to as late as 2033.
Overview of the New Retirement Catch-Up Rules
Subsequently, the final regulations include clear guidance for plan administrators regarding catch-up contributions. For example, the final rule includes a provision requiring that catch-up contributions made by certain higher-income participants be designated as “after-tax” Roth contributions. According to both agencies, the changes were made in response to comments received after a proposed version of the regulations was released in January 2025.
Additionally, the final regulations include guidance on the new retirement catch-up rules for the following plan participants:
- employees between the ages of 60 and 63
- employees in newly established SIMPLE plans
Differences Between the Proposed and Final Versions
As shown above, the proposed version of these updates to the SECURE 2.0 Act was released in January 2025. Thereafter, the public was allowed to submit comments on what they agreed with and what they felt needed to change. The Treasury and the IRS considered those comments and made some changes to the proposed regulations. For example, the final regulations now permit a plan administrator to aggregate wages received by a participant in the prior year. This action will help to determine whether the participant is subject to the Roth catch-up requirement.
Also, changes to specific provisions of the proposed rules were made as they relate to:
- correction of a failure to comply with the Roth retirement catch-up rules,
- implementation of a deemed Roth election, and
- plans that cover participants in Puerto Rico.
Employer Takeaways
In conclusion, according to the federal agencies, the final regulations relating to the retirement catch-up rules generally apply to contributions in taxable years beginning after December 31st, 2026. However, the final regulations provide a later applicability date for plans maintained under a collective bargaining agreement. It is also important to note that, although updates were made to the SECURE 2.0 Act, no changes were made to the Employee Retirement Income Security Act of 1974 (ERISA).
Generally, ERISA gives the Employee Benefits Security Administration (EBSA) authority to protect employee retirement investments. In brief, federal law sets minimum standards for private industry plans. Among the retirement plan requirements set forth by ERISA are fiduciary responsibilities for plan managers and administrators. Specifically, ERISA requires plan fiduciaries to act in the financial interests of plan participants. To that end, plan fiduciaries must take professional care when choosing investment options for inclusion in retirement plan menus. In addition to their fiduciary responsibilities, plan administrators are also responsible for retaining records of agency filings, participation, and beneficiary disclosures.
