The IRS & Treasury Issue Final Regulations on SECURE 2.0 Provisions

Congress passed the Setting Every Community Up for Retirement Enhancement (SECURE) Act in 2019 to address issues workers faced in saving for retirement. Congress amended this Act in 2022 with SECURE 2.0, adding many provisions to further strengthen retirement savings opportunities.

The Department of the Treasury and the Internal Revenue Service (IRS) have issued final regulations addressing several SECURE 2.0 Act provisions relating to catch-up contributions. Catch-up contributions are additional contributions under a 401(k) or similar workplace retirement plan for employees who are age 50 or older. The final regulations include final rules related to a SECURE 2.0 Act provision requiring that catch-up contributions made by certain higher-income participants - workers who earn at least $145,000 per year - be designated as after-tax Roth contributions.

The final regulations also provide guidance relating to increased catch-up contribution limits under the SECURE 2.0 Act for certain retirement plan participants, in particular employees between the ages of 60-63 and employees in newly established SIMPLE plans.