SECURE 2.0 plan sponsor update
Implementation updates
2026 required provisions are now in effect
Roth catch-up contributions
Beginning January 1, 2026, participants ages 50 and older who earned more than $150,000 in FICA wages* in the previous calendar year (Roth catch-up required participants) may only make catch-up contributions as Roth contributions.
- This provision is effective for tax years on or after January 1, 2026, regardless of the plan year. The FICA wage limit is calculated on a calendar year basis.
- Plans that added a Roth contribution option will require a plan amendment by the end of the year in which the Roth contribution option was added.
- Plans that offer catch-up contributions without a Roth contribution feature may continue to do so; however, Roth catch-up required participants are no longer eligible to make any catch-up contributions.
On September 16, 2025, the IRS issued a final regulation impacting key catch-up contributions of SECURE 2.0, including the Roth catch-up provision. While this final regulation formally takes effect in 2027, plan sponsors may rely on a reasonable, good faith interpretation throughout 2026. For more information on this regulation, please read our paper: From Proposal to Policy: IRS Finalizes Awaited SECURE 2.0 Catch-up Regulations
* Wages, for the purpose of this provision, are defined in the Internal Revenue Code (IRC) Section 3121(a) as wages subject to FICA (generally, Social Security wages in box 3 of the W-2).
Plan sponsors are now required to submit an annual report identifying all of their Roth catch-up required participants after the final payroll of the year and before the first payroll of the new year.
- This new report is an annual requirement for plan sponsors going forward. The first report was required to be submitted after the final payroll of 2025 and before the first payroll of 2026.
- Plan sponsors should submit these reports on My Plan ManagerTM using the Roth catch-up required participant tracking template provided by Vanguard.
- Plans that do not offer a Roth contribution option are still required to submit the template to ensure that their Roth catch-up required participants do not make any catch-up contributions at all.
Correction methods for Roth catch-up failures
The final catch-up regulation issued in September 2025 provides more flexibility for plan sponsors when it comes to correcting Roth catch-up errors.
- No correction is required for failures involving less than $250 or those that result from a W-2 issued after the deadline for correction.
- Correction deadlines have been extended but vary by type of failure.
- Two additional correction methods are available for plans with the deemed Roth election option. Plans can either:
- Transfer any pre-tax catch-up contributions that should have been Roth to Roth catch up (as long as the plan sponsor has not issued the W-2 for the year); or
- Complete a Roth in-plan conversion and issue a 1099-R to the participant.
- A plan can return the erroneous catch-up contribution as an excess regardless of whether or not they are using the deemed Roth election.
Now that the provision is in effect, we are working harder than ever to ensure both you and your participants are confident in your understanding of what is required under this new rule. With that in mind, we encourage you to review the following new and updated resources:
- NEW: Roth Catch-up Participant Web Portal: We are pleased to announce the launch of a new, interactive web portal that provides access to plan-specific Roth catch-up information simply by entering a plan ID. Through the portal, participants can instantly see relevant guidance and educational content specific to their plan scenario while plan sponsors have access to client-facing tools and educational materials.
Note: Plan sponsors must opt in to have information for their plan(s) included in the portal. To opt in, please reach out to your Vanguard representative. Participants in plans that have opted in to the portal will receive a branded communication from Vanguard with a unique visit link to the portal and their plan ID. - Roth Catch-up Playbook: This playbook is designed to help plan sponsors navigate the complexities of the Roth catch-up provision, even after the effective date of January 1, 2026, has passed. We encourage you to review the playbook often, as it will be continuously updated with information on participant education, implementation updates, and information on our future service.
Annual paper statement requirement
The annual paper statement provision of SECURE 2.0, effective as of January 1, 2026, requires defined contribution plans to provide at least one paper benefit statement annually to plan participants who have not affirmatively elected electronic delivery.
- Plans that rely on the DOL’s 2002 electronic disclosure safe harbor regulation are exempt from this requirement. However, a one-time paper notice for new participants after December 31, 2025, explaining their right to request paper disclosures is required.
- Participants who have affirmatively elected e-delivery with Vanguard are exempt from this requirement.
- Vanguard is targeting fourth-quarter statements to ensure compliance with this provision.
On February 25, 2026, the Department of Labor issued a proposed regulation on the paper statement requirement seeking to update two electronic safe harbor disclosures and bring consistency between this SECURE 2.0 provision and existing federal regulations. Comments on the proposed guidance are accepted until April 26, 2026—60 days after the guidance was issued.
- Plan sponsors are encouraged to inform their participants that have been defaulted into e-delivery that they are subject to this new annual paper statement requirement.
- Participants who do not wish to receive paper benefit statements can make an affirmative election for electronic delivery by choosing this prompt under the “Communications preferences” tab. Participants who take this action will no longer be subject to this provision.
- Vanguard will update additional communications to inform participants of this requirement throughout 2026. Updated communications will include the e-delivery notification, additional required disclosures and legal notices, and the quarterly statement email reminder.
Vanguard is here for support as you navigate the annual paper statement requirement. To help you and your participants feel confident in understanding and complying with this new rule, we encourage you to review:
- Annual Paper Statements brochure: This guide details the actions Vanguard is taking to ensure compliance with this new requirement, recommended plan sponsor actions, and participant impact.
Plan amendment deadlines
