SECURE Act 2.0 Provision 603: Mandatory Roth Catch-Up Contributions

February 10, 2026 By Bene-Care

Beginning January 1, 2026, new rules under SECURE Act 2.0 changed how certain employees make catch-up contributions to their retirement plans.

If an employee earned more than $150,000 in FICA wages (box 3 of the W-2) in the previous year, any catch-up contributions they make must be treated as Roth (after-tax) contributions. These employees are considered Highly Paid Individuals (HPI) under the law.

isolved has introduced new functionality to help support compliance and simplify payroll processing as this change approaches.

What Employers Should Know

Beginning in 2026, catch-up contributions for Highly Paid Individuals will be subject to mandatory Roth rules.

An employee is considered an HPI if they earned more than $150,000 in prior-year FICA wages(box 3 of the W-2) with their current employer.

This requirement applies only to catch-up contributions, including:

  • Standard catch-up contributions for employees age 50+

  • Enhanced catch-up contributions for employees ages 60–63

Employees who earned $150,000 or less may continue making catch-up contributions the same way they do today.

isolved Updates to Support Compliance

To streamline this transition, isolved now includes automation and reporting enhancements, including:

  • New Roth Catch-Up deduction codes for Highly Paid Individuals

  • Automatically apply the new HPI Roth deduction codes when needed

  • Separate reporting visibility for mandated Roth catch-up contributions

  • A new Deferred Comp – Highly Paid Individuals report to help identify impacted employees

No manual action is required to move catch-up contributions to Roth — isolved will handle this automatically once limits are reached.

Action Item for Employers

Employers should review retirement plan and payroll processes, including:

  • Confirm Roth catch-up availability with your retirement recordkeeper

  • Identifying employees who may exceed the HPI threshold

  • Make sure employee birthdates are entered in isolved

  • Contacting your Bene-Care Payroll Specialist with any questions

If you would like to review your current setup or discuss how this change may impact your employees, please reach out to your Bene-Care Payroll Specialist.

For additional information, learn more about SECURE Act 2.0 Provision 603 and Roth catch-up requirements here.