SECURE 2.0 Roth catch-ups

I’ve been reading through the final SECURE 2.0 Roth catch-up regs and trying to picture what this actually looks like in real life starting in 2026.

On paper it’s simple: prior-year wages over the threshold → catch-ups must be Roth.

In practice, it feels like this touches a lot of systems that don’t talk cleanly:
payroll → prior-year wage history → contribution coding → plan admin → audits → corrections.

Curious how people think this will go.

Where do we expect the biggest problems?

• payroll pulling the wrong wage data
• employers mis-certifying eligibility
• misclassified catch-ups getting deposited
• cleanup/corrections later
• audit documentation
• something else?

And realistically — who ends up dealing with the mess when it happens? 

Realistically, I think the plan will end up having to deal with the messes.  I can't think of any reason why a plan would not want to have the deemed Roth election for catch-ups for those required to have Roth catch-ups.

The first line of defense is payroll.  Hopefully, they can recognize when someone who is required to have Roth catch-ups hits the regular deferral limit with pre-tax deferrals and switch them to Roth deferrals if the plan has a deemed Roth election for Roth catch-ups, or stop their deferrals if the plan doesn't allow Roth deferrals. 

The easiest solution is for those required to have Roth catch-up to elect to have Roth deferrals during the year of at least their catch-up limit.  That avoids a lot of problems.  The IRS says the pre-tax amounts are not treated as catch-up until the correction has been completed.  That means the 10% tax on late correction of the ADP test applies if the correction isn't done within 2.5 months, or double taxation of excess deferrals applies if not corrected by April 15. 

If payroll lets them have pre-tax catch-up and the plan has the deemed Roth election, it gets corrected in the plan.  The correction method used will depend on when it is discovered.  If it is discovered before the W-2 is sent, the W-2 gets adjusted to show the catch-up as Roth and the catch-up, adjusted for earnings is moved to the Roth account. If it's discovered after the W-2s are sent, it's corrected with basically an in-plan Roth conversion and the catch-up, adjusted for earnings, is reported on a 1099-R for the year of the correction. 

Without a deemed election, or if the plan doesn't allow Roth deferrals, the excess, adjusted for earnings, is distributed and reported on a 1099-R for the year of the correction.   

I agree, they are not the easiest regulations to read.  https://www.federalregister.gov/documents/2025/09/16/2025-17865/catch-up-contributions