As we have been communicating over the past two years since the adoption of SECURE 2.0 in December 2022, many provisions of the legislation have a delayed effective date.  One such provision affecting most 401(k) plans beginning in 2025 is Section 109 which provides for Super Catch-Up contribution limits for employees aged 60-63 only. 

Currently, 401(k), 403(b) and Governmental 457(b) employee deferrals are limited to an annual dollar threshold which the IRS announced recently will be $23,500 in 2025.  Additionally, employers may allow for catch-up contributions which increases the threshold for employees aged 50 and older and is limited to $7,500 in 2025.  New for 2025, a super catch-up is also available for employees aged 60-63 only.  For 2025, the super catch-up limit for those aged 60-63 is $11,250.  This results in the following maximum deferral limits for 2025:

Catch-up contributions are widely available in most retirement plans, and it is anticipated the super catch-up will be likewise.  However, this additional option will require programming changes to payroll systems, retirement plan recordkeeping systems, internal employer benefit platforms, etc.  Employers are encouraged to check with their payroll company to ensure the payroll company is ready to handle the super catch-up contributions in 2025.

MVP’s recordkeeping system is ready to accept the super catch-up contributions beginning in 2025.  For clients who utilize an outside recordkeeper, most are programmed to accept the super catch-up contributions.  We will reach out to clients directly if your recordkeeper has indicated they cannot accept the super catch-up contributions in 2025.

For all 401(k) and 403(b) plans utilizing MVP’s document services that currently allow for catch-up contributions, the super-catch up will automatically be applied beginning in 2025.  No action is required on your part to update this provision however you are still strongly encouraged to verify with your payroll company they are ready to handle the additional contribution limits.  Plan amendments to formally adopt this provision are required by 12/31/2026 but the increased limits can be applied operationally in the interim.  The SECURE 2.0 amendment, once available, will include language for this super catch-up limit.

We are here to help!  Please contact your Relationship Manager with any questions you may have regarding the enclosed communications or your retirement plan in general.  As always, we appreciate your continued partnership.