Secure Act 2.0: Roth & RMD Rules for 2026

The SECURE Act 2.0, signed into law on December 29, 2022, as part of the year-end spending bill, builds upon the original SECURE Act of 2019. This comprehensive legislation was designed to expand access to employer retirement plans and encourage greater employee participation in retirement savings. At Ameritas, we’re committed to helping both plan sponsors and their participants navigate these changes for a more fulfilling life.

Below are some upcoming provision changes for your clients to keep in mind, as well as reminders about existing provisions.

2026 and beyond provisions

Roth treatment for catch-up contributions 

As of January 1, 2026, employees aged 50+ who earned more than $145,000 (indexed) in FICA wages in the prior year must make catch-up contributions as Roth. If your client’s plan document allows catch-up contributions, but does not allow Roth contributions, they will need to amend the plan to either add Roth contributions or remove catch-up contributions.

It’s important that plan sponsors speak with their payroll provider to ensure they’re prepared for this notable change in 2026 so they can:

• Identify employees who meet the required income threshold and the year in which the employee is eligible for Roth catch-up contributions (the year following the year the employee earned $145,000 or more in FICA wages).
• Support Roth catch-up contributions, including deemed Roth catch-up if their plan document allows it.

Deemed Roth catch-up means the plan automatically treats catch-up contributions as Roth for eligible employees without requiring a separate Roth election from the participant. This simplifies administration and ensures compliance, but the payroll provider must support this functionality.

Roth sources not calculated in RMD

Beginning January 1, 2027, Roth sources will no longer be included in required minimum distribution (RMD) calculations. We have already completed our preparation for this change.

Saver’s match

In 2027, the current credit for retirement contributions will change to a federal matching contribution paid directly into retirement accounts. Ameritas is reviewing this provision pending additional guidance from the IRS.

Existing provisions supported by Ameritas for Secure 2.0

While not a complete list, the below provisions and implementation dates are of particular interest to many of our business partners. For additional information or to learn more, contact us at 800-745-9995.

Required minimum distribution (RMD) age change

The age to start taking RMDs increased to 73 in 2023 and will increase further to 75 in 2033.

Roth treatment for employer contributions

Please note that Ameritas is not currently supporting the feature that allows employees to designate employer matching or non-elective contributions as Roth contributions. While recent regulatory changes permit employers to offer this option, these designated Roth contributions are immediately taxable to the employee and must be 100% vested when made.

As an alternative, both our Elite Advantage and Elite Unlimited programs offer Roth conversions for employer contributions. This approach allows participants to achieve similar tax treatment by converting eligible pre-tax contributions to Roth, providing flexibility and alignment with their long-term retirement planning goals.

Deferral rate timing for 457(b) governmental plans 

Governmental 457(b) plan participants may now change deferral rates at any time instead of only during the first of the month.

Self-certification for hardship withdrawals

Participants can self-certify the existence of a financial need without providing documentation such as medical bills. At Ameritas, we consider this process our default approach for hardship documentation.

Multiple employer plans and pooled employer plans for 403(b) plans 

403(b) plans may now establish MEPs or PEPs, which are currently available through Ameritas.

Increased force out rollover limit

As of January 1, 2024, the maximum limitation for mandatory distributions increased from $5,000 to $7,000.  Sponsors can implement this change by contacting Ameritas.

403(b) hardship withdrawals

Employees can self-certify that a hardship withdrawal is based upon an immediate and heavy financial need, applying to all sources in a 403(b) plan.

Mandatory automatic enrollment

As of January 1, 2025, all 401(k) and 403(b) plans newly established on or after December 29, 2022, require automatic enrollment at 3-10% with automatic escalation of 1% per year up to at least 10% (but no more than 15%). Exceptions supported by Ameritas include governmental plans and church plans. If your plan is administered by a third-party administrator, you should work with your TPA for outreach on this provision.

Increase in catch-up contribution limits

This provision, implemented January 2, 2025, allows individuals ages 60-63 to make catch-up contributions of the greater of $10,000 or 150% of the regular catch-up limit.

Long-term part-time employees

As of January 1, 2025, the requirement for part-time employees to participate has been reduced from three consecutive years with 500+ hours to two consecutive years starting with the 2021 plan year. If your plan is administered by a third-party administrator, you should work with your TPA for outreach on this provision.

Retroactive provisions

A few additional provisions have been applied retroactively under Secure 2.0.

• Qualified disaster recovery distributions is an optional provision that allows up to $22,000 in “qualified disaster recovery distributions” without the 10% early withdrawal penalty.
• RMD surviving spouse elections is a required provision we support whenever a plan sponsor advises that a beneficiary meets the criteria.

At Ameritas, we’re committed to helping plan sponsors and participants navigate the SECURE Act 2.0 changes successfully. We’ll continue to provide updates as additional guidance becomes available and as we implement these provisions. For specific questions about how these changes affect plan sponsors and participants, please contact us at 800-745-9995.

Disclosures

This information is provided by Ameritas®, which is a marketing name for subsidiaries of Ameritas Mutual Holding Company. Subsidiaries include Ameritas Life Insurance Corp. in Lincoln, Nebraska and Ameritas Life Insurance Corp. of New York (licensed in New York) in White Plains, New York. Each company is solely responsible for its own financial condition and contractual obligations. For more information about Ameritas®, visit ameritas.com.

Representatives of Ameritas do not provide tax or legal advice.  Please consult your tax advisor or attorney regarding your situation.