Congress Clarifies Catch-Up Contributions Are Here to Stay

Just Catching Up? Oops! Congress Clarifies Catch-Up Contributions Are Here to Stay


In this series of articles, we explore the implications of SECURE 2.0’s changes to catch-up contributions and how employers should respond.

Section 603 of the SECURE 2.0 Act requires catch-up contributions made by certain high-wage earners to be made on a Roth basis beginning in 2024. But it also contains one of the most talked about technical errors in the legislation, one that resulted in Congress eliminating all catch-up contributions—for everyone.

Not surprisingly, that isn’t quite what Congress had in mind. In an open letter to Secretary of the Treasury Janet Yellen and IRS Commissioner Daniel Werfel, congressional leaders recently clarified that they did not intend to disallow catch-up contributions. Instead, their intent was simply to require catch-up on a Roth basis for high-wage earners, i.e., those making more than $145,000 from their employer in the prior year, and to permit other participants to make catch-up contributions on either a pre-tax or Roth basis.

The letter indicated that Congress intends to correct this error in the legislation itself—rather than directing the US Department of the Treasury to issue regulations consistent with such intent—but did not address the timetable for doing so.

For any questions regarding SECURE 2.0 changes, please contact your regular McDermott lawyer or one of the authors.


Read First Article: Just Catching Up? SECURE 2.0 Roth Catch-Up Contribution Requirement Leaves More Questions than Answers

Read Second Article: Just Catching Up? All for One, or None for All, Catch-Up Contributions Under SECURE 2.0

Read Third Article: Just Catching Up? Wages, by Any Other Name, Not So Sweet for Employers Under SECURE 2.0

Read Fourth Article: Just Catching Up? Payroll Challenges Plague Roth Catch-Up Contribution Implementation

Read Sixth Article: Just Catching Up? For SECURE 2.0’s Catch-Up Contributions, Age Is More Than Just a Number