Treasury And IRS Issues Regulations On SECURE 2.0 Act Retirement Plan Catch-Up Provisions

The U.S. Department of Treasury and the Internal Revenue Service (IRS) has proposed regulations concerning SECURE Act 2.0 changes to retirement plan catch-up contributions. The changes include increased catch-up contributions for plan participants between ages 60 and 63 and mandatory Roth tax treatment for catch-up contributions made by certain 401(k) plan participants.

Increased Catch-Up Contributions for Certain Plan Participants

The proposed regulations relate to Section 109 of SECURE 2.0 in reflecting the new dollar amounts for individuals between the ages of 60 and 63. Beginning in January 2025, affected employees may contribute the greater of $11,250 or 150% of the current age 50 catch-up limit. When the employee turns 64, they must revert to the standard catch-up limit. Cost-of-living adjustments will apply to catch-up contribution limits in years after December 31, 2025.