In retirement plan administration, contribution timeliness is foundational work that protects participant savings and shields sponsors from liability. Contribution timeliness is important for both employee deferrals and employer contributions, including matching and nonelective contributions.

The Rules at a Glance

Employee Elective Deferrals and Loan Repayments.  Elective deferrals and loan repayments become plan assets on the earliest day they can reasonably be segregated from employer assets.  They must be deposited as soon as administratively feasible, but never later than the 15th business day of the following month.  Plans with fewer than 100 participants at the beginning of a plan year have a seven-business-day safe harbor.  A facts and circumstances rule applies to larger plans (often 1-5 business days).  Late deposits are prohibited transactions requiring correction with lost earnings, Form 5330 excise tax (generally 15% of the amount involved for each year, with a potential additional excise tax if not timely corrected), Schedule H reporting, and often VFCP correction.

Employer Contributions (Match and Nonelective).  Key deadlines for taxable employers include:

• Tax deductibility (Section 404). Deposit by the employer’s tax-return due date, including extensions.
• Annual additions limit (Section 415). To count for the prior limitation year, contributions generally must be allocated/credited to the prior year under the plan’s terms and actually made no later than 30 days after the tax-return due date with extensions.
• Plan document & safe harbor rules. Plan documents may require specific timing (e.g., matching contributions contributed each payroll or true-ups by a set date).  Safe harbor nonelective contributions must usually be funded by the last day of the following plan year.

Why Advisors Should Care

Contribution delays risk qualification failures, prohibited transaction issues, and fiduciary breach claims.  Advisors can add value by helping ensure contributions are timely made, thus helping plan sponsors avoid costs, compliance issues, and participant complaints.

How Advisors Can Help

• Provide plan sponsor education regarding contribution deadlines and best practices.
• Provide a year-end checklist to help clients remember the timing rules.
• If errors occur, guide clients through VFCP for deferral issues and EPCRS for employer-side operational failures, with full documentation.

Your proactive guidance on contribution timing can help plans stay compliant, and sponsors and participants happy.

The continued rollout of SECURE 2.0 and other updates means 2026 will likely be a busy year for regulatory guidance.  Below are a few items that are likely to matter to advisors in 2026.

1. More SECURE 2.0 guidance expected. Treasury and the IRS are still working through a long list of SECURE 2.0 projects, and their 2025-26 Priority Guidance Plan calls out multiple SECURE 2.0 deliverables, including student loan matching contributions, long-term part-time employees, automatic enrollment requirements, pension-linked emergency savings accounts, and required minimum distributions.

In 2025, the IRS finalized regulations regarding the Roth catch-up contribution requirement for high earners.  Advisors should bear in mind that the Roth catch-up contribution requirement generally applies now, but the specific provisions of the final regulations generally aren’t mandatory until tax years beginning after December 31, 2026.

2. New plan corrections guidance. The 2025-26 Priority Guidance Plan indicates the IRS hopes to provide a new version of the Employee Plans Compliance Resolution System (EPCRS) to reflect changes since the most recent (2021) version.
3. Cybersecurity enforcement. The DOL’s enforcement focus for fiscal year 2026 names cybersecurity a national enforcement project, signaling DOL investigations will treat cyber risk as a priority ERISA compliance issue.  Advisors should expect investigators to ask not just whether a plan has policies, but whether fiduciaries have a documented process for selecting and monitoring recordkeepers and other vendors, negotiating and enforcing cybersecurity-related contract terms, and obtaining evidence of controls.  The shift builds on EBSA’s recent clarification that its cybersecurity guidance is intended to apply broadly across employee benefit plans.
4. Other enforcement priorities. For 2026, DOL has identified enforcement priorities (in addition to cybersecurity) that include protecting benefit distributions, retirement asset management, and criminal abuse of contributory benefit plans.  Collectively, this indicates heightened scrutiny of distribution safeguards (including fraud prevention and service-provider oversight), fiduciary oversight of investments and fees, and timely handling and remittance of participant contributions.

DOL also stated it will reduce its focus on missing participants following establishment of the Retirement Savings Lost and Found Database, though plan fiduciaries should still maintain reasonable missing-participant procedures.

Apart from the expected new guidance and focus areas, advisors should remember that for many plans, amendments to plan documents for recent law changes will be required by December 31, 2026.

As plan advisors, you’re likely already aware that the retirement landscape continues to shift under SECURE 2.0. Beginning January 1, 2026, one major change from SECURE 2.0 will require certain high-earning participants to make catch-up contributions as Roth, rather than pre-tax, deferrals. Advisors should help plan sponsors and participants prepare now to ensure compliance and effective communication.

The Rule In Brief

• Effective Date: Tax years beginning after December 31, 2025 (final regulations generally apply beginning in 2027)
• Affected Participants: Participants age 50 or older (including those who will turn 50 by year-end), whose prior-year W-2 wages exceed $150,000 (indexed for inflation). Only FICA wages reported in Box 3 on Form W-2 are considered under the regulations; thus, self-employed individuals are not subject to this new rule.
• What Changes: All catch-up contributions for high earners must be Roth. Participants whose prior year FICA wages fall below the $150,000 threshold may still choose between pre-tax or Roth contributions, if the plan allows.
• Plan Types: The new rule applies to 401(k), 403(b), and governmental 457(b) plans. SIMPLE and SEP IRAs are excluded.

Key Implications for Plans

Plans should be mindful of several key considerations going forward. First, if a plan does not offer Roth deferrals, affected participants will not be able to make catch-up contributions after December 31, 2025. Plan sponsors should determine now to change their plan features and should coordinate with their service providers if they wish to add or update Roth functionality. To this end, employers should identify high-wage participants using 2025 W-2 wages, so that the Roth rule is correctly applied in 2026.

Next, 401(k) and 403(b) plan documents generally must be amended by December 31, 2026, to comply with SECURE 2.0 requirements. Later deadlines apply to governmental and collectively bargained plans.

Correcting Failures

Final regulations clarifying the Roth catch-up contribution requirements provide two correction methods that may be used when participants subject to the Roth catch-up requirement make pre-tax catch-up contributions that should have been designated Roth contributions. To use either method, plans must include a deemed Roth election feature, to clarify that the plan will automatically treat an affected participant’s catch-up contributions as Roth contributions.

• Form W-2 Correction Method: Any catch-up contributions that should have been designated Roth contributions (adjusted for gains or losses) is transferred from the participant’s pre-tax account to the participant’s designated Roth account. The transferred amount is then reported as a designated Roth contribution on the participant’s Form W‑2 for the year of the deferral. This correction method is not permitted if the participant’s Form W-2 for the year has already been filed or furnished to the participant.
• In-Plan Roth Rollover Correction Method- A plan may directly roll over any catch-up contributions that should have been designated Roth contributions (adjusted for gains or losses) to the participant’s designated Roth account and report the amount of the in-plan Roth rollover on Form 1099-R for the year of the rollover. This contribution and any related earnings will need to be included in the participant’s gross income in the year the rollover occurs. This correction method is allowed even in plans that do not permit participant-elected in-plan Roth rollovers, as it is intended to correct an operational failure.

Next Steps for Plan Advisors

As we move quickly towards implementation of the Roth catch-up contribution requirement, plan advisors can assist their clients by confirming plans’ Roth deferral capability and catch up provisions, coordinating with payroll and other service providers to ensure plan features and operations will align with the new rule, identifying participants who are likely at or over the $150,000 threshold, and providing clear participant communications advising on the new rule. For plan sponsors, readiness will help mitigate compliance errors; for participants, Roth catch-ups may enhance long-term tax free growth. Plan advisors who can assist their clients through this transition will add significant value as 2026 approaches.

If you have any questions about the Roth Catch-Up Contribution Rule, our team is here to help. Please contact your trusted TBC advisor for the latest updates and guidance.

REMINDERS:

• December 1, 2025: Deadline to distribute annual safe harbor notices to plan participants.
• December 1, 2025: Deadline to distribute annual QDIA notice to plan participants, as well as annual automatic enrollment and default investment notices, which may be combined with the QDIA notice.