As retirement plan advisors, we’re seeing growing interest from clients about what many in the industry have nicknamed the “Super Catch-Up” provision. This enhanced retirement saving opportunity, officially known as the Age 60-63 Catch-Up Contribution, stems from the SECURE 2.0 Act of 2022 and took effect January 1, 2025. If you’re a plan sponsor, here’s what you need to understand about this new provision and how Rea will be handling its implementation.
The Enhanced Catch-Up: A Closer Look
The Age 60-63 Catch-Up gives near-retirees an additional opportunity to boost their retirement savings during what are typically their highest earning years. As of 2025, retirement plan participants who are between ages 60 and 63 (inclusive) by the end of the calendar year can now contribute more than the standard catch-up amount.
Specifically for 2025, individuals will be eligible for the “Super Catch-Up if born in the years 1962-1965. Individuals will be able to contribute 150 percent of the regular Age 50+ Catch-Up contribution limit. For context, the regular Age 50+ Catch-Up contribution limit for 2025 is $7,500. The enhanced catch-up limit for 2025 will be $11,250. Combined with the elective deferral limit of $23,500, Super Catch-Up Eligible individuals may defer $34,750 in total.
It’s worth noting that this new provision applies to 401(k), 403(b), and governmental 457(b) plans. However, there are different eligibility requirements depending on the plan type:
- For 401(k) and 403(b) plans: Participants must have already contributed the maximum amount under the Internal Revenue Code Section 402(g) general annual deferral limit.
- For governmental 457(b) plans: Participants must have contributed the maximum amount of the Code Section 457 general contribution limit.
Once a participant reaches age 64, they revert to the standard Age 50+ Catch-Up limit for future contributions.
Important Considerations for Plan Sponsors
As with many retirement plan provisions, there are several important nuances to understand:
- This provision is optional for plan sponsors. Plans are not required to offer enhanced catch-up.
- The enhanced catch-up coordinates with existing catch-up provisions. For 403(b) plans, enhanced catch-up coordinates with the Special 15-Year Catch-Up. For governmental 457(b) plans, participants cannot use both the enhanced catch-up and the Special 457 Catch-Up in the same tax year but can use whichever is greater.
- Relationship with mandatory Roth contributions. Under SECURE 2.0, participants whose wages exceeded $145,000 in the previous year (subject to annual cost of living adjustments) can only make catch-up contributions as Roth contributions. However, the Internal Revenue Service has provided an administrative transition period for 2025, meaning this Roth requirement won’t apply to the enhanced catch-up in 2025.
- The enhanced catch-up is not subject to the annual additions limit. Like the standard Age 50+ Catch-Up, these contributions do not count toward the Internal Revenue Code Section 415(c) annual additions limit.
Rea’s Approach to Implementation
For plan sponsors whose retirement plan documents are handled through Rea’s prototype document services, our default approach is to allow the Age 60-63 Enhanced Catch-Up provision. We believe this offers participants valuable flexibility in their retirement planning journey and aligns with our commitment to helping clients achieve their financial goals.
However, we understand that every plan sponsor has unique needs and circumstances. If you prefer not to offer this enhanced catch-up option in your plan, please reach out to your Rea team member as soon as possible. We’ll work with you to ensure your plan document properly reflects your preferences now that this provision is in effect.
Implementation of this provision may require:
- Plan document amendments
- Updates to salary reduction agreements
- Adjustments to payroll systems to properly identify eligible participants and apply correct limits
- Communication materials to inform participants about this opportunity
Looking Forward
The Age 60-63 Enhanced Catch-Up represents a meaningful opportunity for older workers to accelerate their retirement savings during their final working years. As your retirement plan advisors, we’re here to help you understand and implement these changes in a way that best serves both your organization and your plan participants.
For more information about the enhanced catch-up provision or other aspects of retirement plan administration, please contact our Retirement Plan Advisory team. We’re committed to helping you maintain a compliant, effective retirement plan that serves the needs of your workforce while supporting your organizational goals.
