What: SECURE 2.0 includes a provision that allows participants in account-based plans, including governmental 457(b) plans, to designate employer-matching contributions as Roth contributions, and plans to deposit matching and/or non-elective contributions to employees’ designated Roth accounts as Roth contributions
Action Required:
Key Dates: Effective for contributions made after 12/29/2022
Impacted Audiences: Participants with a 457(b) plan
For More Information: Click "Read More" below
Key Information:
Optional treatment of employer matching or non-elective contributions as Roth contributions
Due to a provision within SECURE 2.0, participants in account-based plans, including governmental 457(b) plans are now allowed to designate employer-matching contributions as Roth contributions, and plans to deposit matching and/or non-elective contributions to employees’ designated Roth accounts as Roth contributions. Such amounts will be included in the employee’s income in the year of contribution, and must be non-forfeitable (i.e., not subject to a vesting schedule).
This change is effective for contributions made after 12/29/2022 and creates a plan design incentive for employers and allows more contributions to be made on a Roth (post-tax) basis.
More information: MERS SECURE 2.0 Resource Page