Deemed Roth Elections and Inadvertent Catch-up

There has been some back and forth regarding the Deemed Roth Election and how it interacts with a participant’s affirmative election not to make Roth catch‑up contributions.   Our understanding is that the Deemed Roth Election is an administrative option that can be applied when a participant has not made an active election, allowing the plan to automatically designate catch‑up contributions as Roth.

If a plan fails ADP and a portion of the excess deferrals is recharacterized as catch‑up contributions, how should Roth treatment be determined?  Specifically, does the participant’s prior affirmative election not to make Roth catch‑up contributions override the Deemed Roth Election?  Or would the participant need to make an election at the time the catch‑up amount is calculated to determine whether it should be treated as Roth (assuming the contribution was originally pre‑tax and exceeds $250)?

Ultimately, we are trying to understand whether this introduces an additional tracking requirement—namely, whether a participant has made an affirmative election—before a plan administrator can rely on the Deemed Roth Election.