- HIGH EARNERS: Effective January 1, 2026, employees whose FICA wages in the prior year exceeded $145,000, (hereinafter, High Earners), must make their catch-up contributions on a Roth basis (hereinafter, Roth catch-ups).
- The Roth Catch-up $145,000 threshold will be subject to cost-of-living adjustments in the future, just like other limits.
- Only wages earned from the employer sponsoring the plan are considered to determine the $145,000 threshold.
- Employers do not need to be concerned with a participant’s wages at another job held by the participant during the determination year (the previous year) to establish High Earners.
- Other members of the controlled or affiliated service group are not considered “the employer sponsoring the plan” even if they have adopted the same plan.
- An individual who works for more than one member of a controlled group would have separate $145,000 thresholds for each employer.
- Participants working for more than one employer that are sponsors of a MEP/PEP or Multiemployer Plan would not have their wages aggregated to determine High Earner status. Consistent with the controlled group situation, each employer has a separate $145,000 threshold. Collaboration is not needed across employers.
- The $145,000 threshold is not prorated for partial year employment.
- Since prior year FICA wages are used to identify the HIGH EARNER individuals, nobody can be a High Earner during their first year of employment.
