Important Update: Changes to Catch-Up Contributions for High Earners Effective January 1, 2026

This is a reminder about an important upcoming change to how catch-up contributions will be handled for certain employees, as required under new IRS regulations.

Effective January 1, 2026, employees who earned more than $150,000 in FICA wages in the prior calendar year will be required to make any eligible catch-up contributions on an after-tax Roth basis. This change is mandated by the SECURE 2.0 Act and applies to individuals age 50 or older who are eligible to make catch-up contributions to their retirement plans.

What This Means for You

1. If your prior-year wages exceeded $150,000 (as reported for Social Security and Medicare taxes) and you elect to make catch-up contributions, those contributions must be made as Roth (after-tax) contributions.
    
2. Pre-tax (traditional) catch-up contributions will no longer be permitted for employees in this earnings category.
    
3. Roth catch-up contributions are taxed at the time they are made, meaning they will be deducted from your take-home pay after federal, state, and applicable local taxes are withheld.
    
4. Employees are encouraged to consult with a qualified tax advisor or financial professional regarding their specific situation.
    

Next Steps

1. No immediate action is required at this time. If you are subject to this rule, you will automatically be defaulted to the Roth after-tax catch-up contribution option.
    
2. You are encouraged to review your current retirement contribution elections and consider consulting with a financial or tax advisor to understand how this change may affect your overall tax situation and retirement strategy.
    
3. Log on to CUBES to review your catch-up contribution elections and make changes as needed.
    
4. TIAA and Vanguard are available to provide one-on-one retirement planning sessions:
   1. Vanguard
      Website: https://retirementplans.vanguard.com/VGApp/pe/ekit/registration/organizations.jsf
      Phone: 800-662-0106, ext. 14500
   2. TIAA
      Website: www.tiaa.org/moc
      Phone: 800-732-8353
       

If you have any questions, please contact the Benefits Service Center at 212-851-7000 or [email protected].