The SECURE 2.0 Act of 2022 ( SECURE 2.0 ) implements many changes designed to encourage participation in qualified retirement plans. While many of these provisions have been in effect for a couple of years, we want to highlight a few key provisions which have become effective recently.
Catch-up Elective Deferrals: This is a mandatory provision effective for taxable years beginning after December 31, 2025. Previously, catch-up deferrals to qualified retirement plans could be made on a pre-tax or Roth basis, as permitted by the plan document. However, Section 603 of SECURE 2.0 requires that catch-up deferrals be made on a Roth basis for participants whose prior year wages are above a certain threshold, to be adjusted annually. If a plan document does not allow Roth contributions, participants with wages above the annual threshold will not be able to make catch-up contributions. In 2026, the provision applies to employees whose 2025 wages exceeded $150,000.
Paper Benefit Statements: Section 338 of SECURE 2.0, effective for plan years beginning after December 31, 2025, is intended to address the digital divide and protect segments of the population with less motivation, skill, or access to obtain and understand digital statements. This provision requires that defined contribution plans provide a paper benefit statement at least once a year to participants who have not affirmatively opted out of receiving such paper statements. Similarly, defined benefit plans are required to provide a paper benefit statement once every three years.
Plan Amendments: While qualified retirement plans are required to operate in accordance with SECURE 2.0 provisions based on their individual effective dates, formal plan amendments to implement such provisions are not required to be made until the last day of the first plan year beginning on or after January 1, 2025.
Catch-up Limits: Section 109 of SECURE 2.0 introduced a voluntary provision to increase the catchup limits for participants aged 60 to 63. The limit is adjusted annually for inflation. For 2026, the limit for these participants is $11,250, while the standard catch-up limit is $8,000.
