IRS recently issued Notice 2023-62, which addresses a couple of DC-related items connected to SECURE 2.0.
Specifically, the big news item included in the Notice is a delay in the effective date that requires any catch-up contributions made by higher‑income participants in DC plans to be designated as after-tax Roth contributions from 2024 to 2026.
In addition, the Notice clarifies that plan participants who are age 50 and over can continue to make catch‑up contributions after 2023, regardless of income. In the original text of SECURE 2.0, a conforming change appeared to have inadvertently eliminated all catch-up contributions after 2023. Congress’ intent with SECURE 2.0 was not to eliminate catch-up contributions altogether, so Notice 2023-62 corrects that inadvertent change in the original language of SECURE 2.0.
Additional details and a link to the Notice are below. If you have any questions about the Notice or its implications, please let us know – we’d be happy to set up some time to discuss.
Link to the IRS Article: https://www.irs.gov/pub/irs-drop/n-23-62.pdf
Source: IRS Newswire, 2023, https://www.irs.gov/newsroom/irs-announces-administrative-transition-period-for-new-roth-catch-up-requirement-catch-up-contributions-still-permitted-after-2023
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