Final regulations have been issued on changes that the Secure 2.0 Act made to the provisions for catch-up contributions in employer retirement plans. Beginning in 2025, the following increases will apply:
Non-SIMPLE plans
- For individuals ages 60-63 in 2025, the catch-up limit is increased to 11,250. However, if the taxable compensation of the participant exceeds 145,000, the increased deferral must be in the form of a Roth contribution.
For SIMPLE plans
- For individuals ages 60-63, the limit is increased to 5,250 if the employer has less than 100 participants in the plan.
- For individuals ages 50-59 and greater than 64, the limit is 3,850 if the employer has less than 25 participants in the plan.
- For individuals ages 50-59 and greater than 64, the limit is 3,850 if the employer has 26-100 participants in the plan and provides a 4% fully vested employer matching contribution or a 3% non-elective employer contribution.
These rules are complex. Employers should consult with their CPAs for a detailed explanation and analysis.