News Archive

"Instead of recalculating the [super catch-up] limit as 150% every year, the IRS will now index that dollar amount ($11,250) to cost-of-living adjustments (COLA).... in 2026, the super catch-up isn't just 150% of the regular catch-up -- it's whatever the indexed amount turns out to be (which, in this case, meant there was no adjustment, and it stayed at $11,250)."  MORE >>

"The IRS is back to work and just announced the 2026 annual limits that will apply to tax-qualified retirement plans ... [including] a surprise increase in the inaugural FICA wage limit for purposes of the mandatory Roth catch-up requirement. Employers maintaining tax-qualified retirement plans will need to make sure their plans' administrative procedures are adjusted accordingly."  MORE >>

"Although SEPs can be beneficial, there are certain types of small businesses that may want to evaluate a 401(k) plan in comparison to a SEP. Some small business owners may find that a 401(k) plan is better suited to meet their objectives when considering three factors: [1] contribution allocation; [2] maximum contribution deduction; and [3] eligibility and vesting conditions."  MORE >>

With the shutdown ended, the [IRS] has finally issued Notice 2025-67, setting out the limits on benefits and contributions for 2026. Maximum deferrals under a 401(k) or 403(b) plan rose from $23,500 to $24,500, while maximum benefits under a defined benefit plan rose from $280,000 to $290,000. This page includes a chart showing details, and limits from 1996 to 2026.  MORE >>

"If reading all these rules has you thinking about eliminating Roth provisions or catch-ups from your plan, I don't blame you, so here are some of the most common considerations ... [1] Plans do not have to offer a Roth option. [2] Plans cannot require that ALL catch-up contributions be ROTH contributions. [3] Plans cannot make Roth available only for catch-up contributions. [4] Plans cannot make Roth available only to catch-up eligible participants. [5] Catch-up eligible participants who are not High Earners are not precluded from making catch-up contributions in a plan that does not have a Roth feature."  MORE >>

"Sponsors will need to amend plan documents implementing the Roth catch-up rule no later than December 31, 2026 ... With respect to safe harbor 401(k) plans, the IRS indicated that a midyear plan amendment implementing this feature does not constitute a prohibited midyear change that would jeopardize safe harbor status."  MORE >>

"87.4 percent of eligible employees contributed to their 401(k) accounts up from 86.9 percent the previous year.... Average employee deferrals were 7.7% of pay (down from 7.8% in 2023), and employer contributions averaged 4.8% (down from 4.9%) for a total savings rate of 12.5% of pay.... 2.7% of participants took a hardship withdrawal in 2024, up from 2.1% in 2023 -- while plan loan usage declined ... 20 percent of plans now offer [Roth employer contributions], up from 13 percent in 2023, with a third of plans considering adding it."  MORE >>

"[P]lan sponsors reported a near equal focus on financial wellness for participants (39%) ... ensuring regulatory compliance (37%) and reducing costs (36%) in their plan.... 44% [state] that AI will have the greatest impact on the success of their plan over the next three- to five-year period.... 29% reported they are currently using or considering a MEP or PEP specifically as a way to lower plan costs.... 67% of plan sponsors said they are considering switching to a MEP or PEP or may consider it in the future. "  MORE >>

The IRS has now released all of the 2026 benefit limits, including both the cafeteria and health plan limits as well as all of the qualified retirement plan limits. Earlier this year, IRS also released the High Deductible Health Plan (HDHP) and Health Savings Account (HSA) limits. This chart shows all of these limits for 2025 and 2026.  MORE >>

• "Effective January 1, 2026, the limitation on the annual benefit under a defined benefit plan under section 415(b)(1)(A) of the Code is increased from $280,000 to $290,000....
• "The limitation under section 402(g)(1) on the exclusion for elective deferrals described in section 402(g)(3), which includes elective deferrals made to the Thrift Savings Plan, is increased from $23,500 to $24,500.
• "The limitation on deferrals under section 457(e)(15) concerning deferred compensation plans of state and local governments and tax-exempt organizations is increased from $23,500 to $24,500.
• "The limitation under section 414(v)(2)(B)(i) for catch-up contributions to an applicable employer plan other than a plan described in section 401(k)(11) or section 408(p) that generally applies for individuals aged 50 or over is increased from $7,500 to $8,000.
• "The limitation under section 414(v)(2)(E)(i) for catch-up contributions to an applicable employer plan other than a plan described in section 401(k)(11) or section 408(p) that applies for individuals who attain age 60, 61, 62, or 63 in 2026 remains $11,250.
• "The Roth catch-up wage threshold for 2025, which under section 414(v)(7)(A) is used to determine whether an individual's catch-up contributions to an applicable employer plan (other than a plan described in section 408(k) or (p)) for 2026 must be designated as Roth contributions, is increased from $145,000 to $150,000....
• "The threshold used in the definition of “highly compensated employee” under section 414(q)(1)(B) remains $160,000.
• "The threshold under section 416(i)(1)(A)(i) concerning the definition of “key employee” for top-heavy plan purposes is increased from $230,000 to $235,000.
• "The annual compensation limitation under sections 401(a)(17), 404(l), 408(k)(3)(C), and 408(k)(6)(D)(ii) is increased from $350,000 to $360,000. "

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"This updated article reflects a revised estimate of the 2026 “super catch-up” limit for employees ages 60-63. The previous article showed a projected 2026 limit of $12,000, equal to 150% of the projected 2026 regular catch-up limit of $8,000. However, while the statute is not entirely clear, published IRS regulations on IRC section 414(v) suggest the super catch-up limit will be indexed separately from the regular limit, in increments of $500. In this case, we project the limit will remain $11,250 for 2026."  MORE >>

"These steps should be taken by December 31, 2025: [1] Ensure systems will identify 'High Earners' ... [2] Confirm payroll is set to withhold catch-up contributions for High Earners as after-tax contributions. [3] Determine whether the plan will administer catch-up contributions as deemed elections or require affirmative election. [4] Confirm payroll and plan recordkeeping systems communicate wage data correctly and can segregate contribution types. [5] Communicate with participants."  MORE >>

"What's New: [1] Permanent credit for Achieving a Better Life Experience (ABLE) account contributions ... [2] New saver's match for qualified retirement contributions starting with 2027 tax returns filed in 2028."  MORE >>

"Generally, 401(k), 403(b) and 457(b) plans must comply with the Roth catch-up requirement as of January 1, 2026.... Employers may implement a 'deemed election' for participants who are subject to the Roth catch-up requirement. If an employer implements the deemed election, there are two new correction methods available to fix catch-up contribution characterization mistakes."  MORE >>

"The Roth catch-up contribution mandate applies to catch-up eligible participants (i.e., those who are age 50 or older) who had FICA wages for the preceding calendar year 'from the employer sponsoring the plan' that exceeded the Roth catch-up wage threshold. This leads to the following questions: How are FICA wages for the prior year determined? What is the Roth catch-up wage threshold for a given year and how is it applied? Who is the 'employer sponsoring the plan'?"  MORE >>

"Without emergency savings, employees are twice as likely to turn to workplace retirement accounts to cover unexpected costs ... [As] of 2024, nearly 6% of employees have taken a hardship withdrawal from their retirement account compared to roughly 2.7% in 2018, and retirement plan loans have been on the rise since 2021, rising from 6.5% to 9.2%.[1]"  MORE >>

"The most immediate operational problem is for 401(k), 403(b) and other DC plans that allow catch-up contributions.... Sponsors of tax-exempt governmental plans must make their changes by December 31, 2025, regardless of plan year. The Roth catch-up rule applies on a calendar-year basis, regardless of your plan year. Consequently, operational changes are needed by January 1, 2026 for all affected plans."  MORE >>

"According to the complaint ... IBM breached its fiduciary duties by retaining several underperforming propriety TDFs and several Vanguard mutual funds that consistently underperformed similar options ... costing plan participants $1.9 billion in returns. The allegations focus on IBM's proprietary suite of All-in-One Life Cycle funds, which includes both target-date retirement and target-risk funds used as default investment options." [Arechiga v. International Business Machines Corporation, No. 25‑9067 (S.D.N.Y. complaint filed Oct. 31, 2025)]  MORE >>

"While small business retirement plan assets went up, only 59% of small business employees who were eligible enrolled in their employer's defined contribution plan in 2024. This is considerably less than the 82% of all private sector employees -- irrespective of size -- who are enrolled ... Small plan participation was reported to be significantly higher in those plans with automatic enrollment (81%) than those with voluntary participation (52%). "  MORE >>

"While plans are not required to offer Roth contributions, those that don't will be prohibited from accepting catch-up contributions from otherwise eligible employees. This provision appears to effectively force sponsors of plans that currently allow only pre-tax catch-up contributions to either [1] amend their plans to permit Roth deferrals, or [2] limit catch-up eligibility to non-highly compensated employees."  MORE >>

"Defined Contribution (DC) plans -- primarily 401(k)s and 403(b)s -- now hold over $12 trillion in assets ... Within these plans, Target Date Funds (TDFs) are the default investment option for most participants. Increasingly, TDFs are being housed in Collective Investment Trusts (CITs) rather than SEC-registered mutual funds.... CITs operate in a poorly regulated gray zone.... TDFs held in state-regulated CITs are therefore emerging as one of the most dangerous and least transparent areas in the retirement system."  MORE >>

"Reasons to roll over ... [1] Your plan has high-cost investments.... [2] You have a trail of 401(k) accounts.... [3] You need more bond funds.... [4] You want flexibility for withdrawals.... Stick with the 401(k)? ... [1] You plan to retire early…or late.... [2] You want to invest in a Roth IRA, but you earn too much to contribute.... [3] You worry about the loss of Net Unrealized Appreciation (NUA).... [4] You're worried about lawsuits."  MORE >>

"Whether you're changing employers, retiring, or taking a career break, knowing how to manage your old 401(k) can help you avoid unnecessary taxes and keep your retirement strategy on track. Americans ... born between 1957 and 1964 held an average of 12.9 jobs between ages 18 and 58.5 Deciding what to do with an old 401(k) is therefore a common step in any career transition."  MORE >>

"The new regulations confirm that plans should determine impacted participants by looking at each participant's prior year Social Security earnings as reflected in Box 3 on Form W-[2] Participants whose earnings exceed $145,000 (or the COLA limit of $150,000, if applicable) in 2025 will be subject to the Roth catch-up requirement for plan years beginning in 2026. Employees who did not have Social Security earnings from the employer during the prior year will not be subject to the Roth catch-up requirement."  MORE >>

"If involuntary distributions are selected in your plan document, you must follow the mandatory cash-out rules. That means reviewing all terminated participant accounts at least once a year and taking the necessary action to distribute eligible balances. These distributions can occur without the participant’s authorization, as long as you’ve provided at least 30 days’ notice of the pending distribution."  MORE >>