Catch-up 60-63

A client mentioned they were considering including the new 60-63 catch-up provision.  I was under the assumption that if a plan included the regular catch-up provision the new higher amount was automatically available.  Is it even possible to have a plan that allows for regular catch-up deferrals but not the new 60-53 catch-up amount?  Will this be in an amendment or is it just effective via IRS regulation automatically?

Thank you,

Tom

The document providers (ASC and FTW) I have talked to are taking the all-or-nothing approach absent guidance from IRS that says you can do one without the other.  Pretty sure I have seen the same from FIS.

The existing language in the pre-approved documents that I have seen incorporate the catch-up limits by references to code and regulatory which include the age 60-63 increased limit.  If no action is taken, then the increase is automatic under these documents.  A plan is not required to offer any catch-up contributions, and if it does offer them, it is not required to offer the maximum available catch-up contribution.  The only requirement is the catch-up provision be universally available.  A plan that does not want to have the age 60-63 limit should adopt an amendment or a formal administrative procedure documenting their position, and then make sure everything is included in the plan document when all the other recent legislation changes are required to be included in the document.

I’ve heard many employers’ paymasters lack software to apply the three age ranges of age-based catch-up limits. Some can sort for whether a participant will be 50 by the end of a year. But some can’t sort for whether an individual will be 60, or will be 64.

Let’s hope designers of IRS-preapproved documents will, when the remedial-amendment time comes, allow users choices about whether to provide or omit the 60-63 catch-up.

From the preamble to the proposed catch-up regulations, released today:

Quote

The higher applicable dollar catch-up limit for participants attaining age 60 through 63 may, but is not required to be, included in an applicable employer plan. Thus, an applicable employer plan may also be designed to limit the catch-up contributions for those participants to the same applicable dollar catch-up limit that applies for all other catch-up eligible participants.

This is found in a footnote on page 15 of the 57-page document.

https://public-inspection.federalregister.gov/2025-00350.pdf

1 hour ago, C. B. Zeller said:

From the preamble to the proposed catch-up regulations, released today:

This is found in a footnote on page 15 of the 57-page document.

https://public-inspection.federalregister.gov/2025-00350.pdf

Thanks CBZ.  Been reviewing the Autoenrollment guidance today so hadn't gotten to this yet.  Good thing we have nothing else to do in January