Groom principals David Levine, co-chair of the firm’s Employers & Sponsors practice, and Brigen Winters, chair of the firm’s Policy practice, were highlighted in PLANSPONSOR’s article, “NAGDCA Provides Roth Catch-Up Plan Guidance for Government Plan Sponsors,” which recapped highlights from a National Association of Government Defined Contribution Administrators (“NAGDA”) webinar where both attorneys spoke as panelists. The webinar focused on the IRS announcement that allows plan sponsors two years to implement the Roth catch-up contributions ordered by SECURE 2.0 and additional guidance considered by the Internal Revenue Service (“IRS”).
PLANSPONSOR reported that Winters, “clarified that employers can allow catch-up contributions on a pre-tax basis until 2026, if the plan does not currently offer a Roth, and the plan will still be considered compliant.”
They went on to add, “Winters said employers should expect that the Roth requirement will begin in two years, as it is seen as a ‘revenue raiser’ for the IRS.”
Regarding plan participants with no prior-year FICA wages, PLANSPONSOR wrote, “David Levine…said the IRS is considering allowing employees, who are not subject to FICA, a pass on making Roth catch-up contributions.”
“For [employers] who don’t have Roth or don’t feel comfortable providing a Roth for people making over $145,000, you might have a pass here,” Levine said.
According to PLANSPONSOR, on plan designated Roth catch-ups, “Levine said this is relevant to governmental plans, as they may have several employers within one system.”
The outlet indicated that “Levine said this guidance would potentially take away a lot of administrative hurdles for government employers.”
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