It’s fall of 2025, and we have finally received guidance for the new catch-up rules outlined in SECURE 2.0.
Applicable in taxable year 2026, pre-tax catch-up contributions are no longer permitted for participants who earn over $150,000 in FICA-eligible wages during 2025 (indexed thereafter). Instead, these Highly Paid Individuals (HPIs) will be permitted catch-up contributions on a Roth basis only. Unfortunately, HPIs with no Roth feature in their plan will not be permitted to make any catch-up contributions.
Since this rule only applies to FICA-eligible wages (W-2 box 3), pre-tax catch-ups will still be allowed for self-employed individuals and sole proprietors even if their “earned income” exceeds $150,000.
SECURE 2.0 also added new “super catch-ups” for participants age 60-63, discussed further in this October 2025 blog.
Given the complicated and last-minute nature of these changes, we expect there may be a bit of clean-up in order come 2027. Plans should have policies and procedures in place to correct for participant catch-ups that violate the new rules.
