8 Questions Answered About the New Mandatory Roth Catch-Up Role
Many employers with company plans, and their recordkeepers, are scrambling to be ready for the soon-to-be-effective SECURE 2.0 rule requiring high-paid employees to make plan catch-ups contributions to Roth accounts. Here are 8 Q&As about the new rule:
1: When is the rule effective?
For most plans, it’s effective January 1, 2026. (Plans with non-calendar year fiscal years must comply as of the first day of the 2026 fiscal year). The law was originally scheduled to be effective January 1, 2024, but the IRS delayed it two years after plan recordkeepers complained that they didn’t have enough time to comply. On September 15, 2025, the IRS issued final mandatory catch-up regulations. The IRS did not extend the effective date of the law but did extend the effective date of the regulations until January 1, 2027. During 2026, plans have some leeway in applying the law.
2: Who is affected?
You are affected if you earned more than $145,000, as indexed, of “wages” in the prior year from your current employer. Although the 2025 dollar threshold hasn’t yet officially been announced, it’s likely to be $150,000. If you’re affected, you cannot make catch-ups on a pre-tax basis.
3: What kind of “wages” count?
Box 3 W-2 wages count. Box 3 shows wages on which your Social Security taxes are paid.
4: What if I’m a self-employed person with income, not wages?
You are not subject to the mandatory Roth catch-up – no matter how high your income is in the prior year.
5: Which plans must comply?
401(k), 403(b) and governmental 457(b) plans must comply. The rule doesn’t apply to other 457(b) plans or SIMPLE IRA plans. It also doesn’t apply to traditional IRA or Roth IRA catch-up contributions.
6. Which catch-ups are affected?
The mandatory Roth requirement applies to the age 50 or older catch-up (up to $7,500 for 2025) and the “super” catch-up for ages 60-63 (up to $11,250 for 2025).
7. How does the rule apply to new employees?
New employees are never affected in their first year of employment – no matter how well paid. That’s because they don’t have any prior-year wages from their current employer. And, in some cases, new employees won’t be affected in their second year of employment since the prior-year dollar threshold isn’t pro-rated.
Example: Claire is hired at Pritchett’s Closets & Blinds as of July 1, 2026 with an annual salary of $250,000. She will not be subject to the Roth mandate during 2026 because she had no 2025 wages with her new company. Assume the 2026 threshold is $150,000 and Claire earns $125,000 in 2026. In that case, Claire will also be exempt in 2027 since the $150,000 threshold isn’t pro-rated.
8. What if my plan doesn’t offer Roth contributions?
Plans are not required to offer Roth contributions at all. The new law doesn’t change that. But the IRS says that if a plan doesn’t permit Roth contributions, only low-paid employees can make catch-up contributions. High-paid employees (those affected by the Roth mandate) can’t make any catch-up contributions – pre-tax or Roth.
By Ian Berger, JD
IRA Analyst
Ed Slott and Company, LLC
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Christian Cordoba, founder of California Retirement Advisors, has been a member of Ed Slott's Master Elite IRA Advisor Group since 2007.