Current employers are experiencing the added complexity of changing contribution rules, Roth catch-up requirements, and evolving compliance operations. With the IRS finalizing regulations for its SECURE 2.0 Act’s Roth catch-up contribution rules as of January 1, 2026, high earners are now required to manage their pre-tax and catch-up contributions differently to maintain compliance.
At the beginning of this year, employees aged 50 or older who earned more than $145,000 in Social Security-taxed income with the same employer are required to make their catch-up contributions as post-tax Roth contributions, eliminating any pre-tax catch-up contributions. Modern HCM software, like UKG Pro HCM and UKG Ready, is instrumental in helping employers and their high-earning employees navigate new contribution rules and ensure compliance with key benefits and payroll requirements.
Understanding the SECURE 2.0 Act & Roth Catch-Up Changes
The SECURE Act, or the Setting Every Community Up for Retirement Enhancement Act, was passed in 2022 to modernize the US retirement system. With over 90 provisions, this act introduces mandatory auto-enrollment for new plans and extends the age for Required Minimum Distributions (RMDs), but its most significant immediate impact for payroll and HR teams is the restructuring of catch-up contributions.
With changing mandates beginning on January 1, 2026, the SECURE 2.0 Roth catch-up rule outlines the requirement for employees aged 50+ who earned over $145,000 (FICA wages) in the prior year to make Secure 2.0 catch-up contributions on an after-tax Roth basis.
The Additional “Super Catch-Up”
Adding to the complexity of the new SECURE 2.0 Act rules, the “Super Catch-Up” increased the catch-up limit for participants who reach ages 60, 61, 62, or 63 by the end of the calendar year.
These participants can contribute the greater of $10,000 or 150% of the standard catch-up limit. For the 2026 tax year, the super catch-up limit remains $11,250, compared to the standard $8,000 catch-up for those aged 50–59.
The Bottom Line: What You Need to Know
- Plan Design Mandate: If an employer wants to continue offering catch-up contributions, the plan must allow Roth contributions.
- Mandatory Roth for High Earners: Participants aged 50+ earning over $150,000 in prior-year FICA wages must make catch-up contributions as after-tax Roth.
- “Deeming” Elections: To minimize disruption, plan sponsors may adopt a “deemed Roth election,” allowing the system to automatically treat pre-tax catch-up elections as Roth for applicable participants.
- Cross-Entity Wage Tracking: While wages are generally determined per employer, plans can elect to aggregate FICA wages across related entities, such as controlled groups.
- Reporting and Coordination: Once the prior-year payroll is finalized, employers must identify RCR-eligible employees and sync this data with their retirement recordkeepers.
Managing Benefits with UKG HCM
By centralizing benefits administration and leveraging automated payroll operations, expanding capabilities within the UKG HCM system allows organizations to easily transition to the new Roth catch-up rules and minimize the risk of manual data-entry errors.
Here’s a closer look at how the UKG suite supports employers and their employees in managing benefits elections, payroll, and time data to simplify compliance.
UKG Ready
For mid-market organizations experiencing changes in benefits administration, UKG Ready provides a unified HCM platform that prioritizes speed and simplicity. This allows these organizations to automate compliance across employee profiles, accelerate the delivery of updated election and enrollment data to retirement records, and enhance compliance with federal and state mandates.
UKG Pro HCM
As an enterprise-grade HCM suite, UKG Pro is engineered to handle the complex configurability required for the Secure 2.0 Act. These advanced capabilities provide the tools needed to monitor and track prior-year wages and FICA taxes, streamline payroll and tax data integrations, and forecast the impact of “super catch-ups” on the health of existing retirement plans.
UKG Benefits Hub
The UKG Pro Benefits Hub functions as the central management engine for these complex legislative transitions, empowering employees to understand plan comparisons and streamline their catch-up contributions. This hub is designed to streamline employee benefits elections by automating enrollment workflows and centralizing the documentation required for new Roth elections.
Next Steps to Future-Proof Your UKG Investment
For HR and benefits leaders, this is a race against time to reconfigure enterprise systems like UKG Pro and UKG Ready, bridging the gap between complex legislation and payroll operations and ensuring compliance with new “super catch-up” requirements. Partner with Surety Systems to prepare your UKG HCM landscape and ensure a seamless, compliant transition for your workforce.
