Compliance Corner: Q3 2025 – Year-End Deadlines & Roth Catch-Up Rules
Upcoming Deadlines
With the end of the year approaching, calendar-year plans must complete 2024 annual administration and electronically file Form 5500 by the October 15th deadline. If you’ve received correspondence from Hunnex & Shoemaker regarding outstanding action items, please respond promptly to ensure all filings are completed on time.
If you’re considering plan changes for the 2026 plan year, there’s still time, but deadlines are approaching for adopting or modifying a safe harbor design before the year begins. Contact your H&S Plan Consultant with any questions.
Key Compliance Dates for 2024 Plans:
October 15 – Contribution deadline for deductibility in 2024 for C-Corps and sole proprietorships (or LLCs taxed as such). Extended deadline for Form 5500 and 5330.
December 1 – Deadline to provide safe harbor/QDIA/automatic enrollment notices for 2026 plan year.
December 31 – Deadline for corrective distributions (subject to 10% excise tax).
January 1, 2026 – New Roth Catch-Up requirement begins for participants with FICA wages exceeding $145,000 in 2025.
New Roth Catch-Up Rules
Under SECURE 2.0 (2022), certain participants will be required to make catch-up contributions on a Roth (after-tax) basis starting January 1, 2026.
Applies to employees age 50+ whose prior-year FICA wages exceeded $145,000.
If a plan does not offer a Roth deferral option, these employees will lose the ability to make catch-up contributions unless Roth is added.
IRS Final Regulations Clarifications
Deemed Roth Election – Plans may choose to “deem” any catch-up deferral of a participant subject to the Roth catch-up rules as a Roth contribution. The IRS allows this provided participants receive advance notice and an effective chance to alter their election. This must be reflected in plan documents by December 31, 2026. Hunnex is working with its document provider to see if a snap-on amendment will be available before year-end. Plan Sponsors are also encouraged to coordinate with payroll providers to ensure systems can handle Roth catch-up contributions correctly2025 3Q Compliance Corner.
Calculation of FICA Wages – The IRS confirmed that the determination depends on Box 3 of the W-2 (not Box 5). Box 5 was rejected because it includes wages for some governmental employees not intended for this rule. Only wages from a common law employer are considered; however, employers may choose to aggregate related entities using a common paymaster for convenience2025 3Q Compliance Corner.
No Ability to Mandate Roth for All – Plan Sponsors cannot require all participants to make catch-up contributions as Roth for administrative ease. Participants subject to the mandatory Roth rule must contribute catch-up as Roth, but others may still elect pre-tax or Roth up to the 402(g) limit2025 3Q Compliance Corner.
Plans Without Roth – The IRS allows plans without Roth options to prohibit affected participants from making catch-up contributions, but only if non-FICA HCEs are also barred. This avoids nondiscrimination issues. Hunnex & Shoemaker is sending amendments to plans lacking Roth options to maintain flexibility for all participants beginning in 2026
Plan Sponsor Notice Requirements
Plan Sponsors have ongoing fiduciary responsibilities to distribute required notices. These notices are frequently reviewed during DOL audits.
| Notice | Description | Timing |
|---|---|---|
| Summary Plan Description (SPD) | Outlines plan provisions, eligibility, vesting, distributions, benefit formulas, and contact info. | Within 90 days of becoming a participant; updated at least every 5 years. |
| Summary of Material Modification (SMM) | Details material changes in benefits, contributions, or provisions. | Within 210 days of year-end, or when the change is effective. |
| Automatic Enrollment Notice | Describes default contribution rate and opt-out process. | At least 30 days before enrollment; annually for calendar-year plans. |
| Safe Harbor Notice | Outlines safe harbor formulas and participant rights. | 30–90 days before the start of each plan year. |
| 404a-5 Fee Disclosure | Explains plan fees, investment options, and historical performance. | Within 90 days of eligibility; annually thereafter. |
| Summary Annual Report | Summarizes financials from Form 5500. | 9 months after plan year-end, or 2 months after extended deadline. |
| Discretionary Match Notice | Details employer’s matching contribution formula. | Within 60 days after contribution is made. |
The above table describes the core annual notices Plan Sponsors are typically required to provide. Not all notices apply to all plan types. Additional notices are necessary for certain types of plans or for specific events. For example, plans that allow participants to direct investments must provide a “black out” notice at least 30 days before a conversion of assets or other event where participants will lose the ability to direct investments for an extended period of time. Specific notices are also required prior to making a distribution to inform participants of the plan distribution options and tax implications. Many of the investment and distribution disclosures are provided annually by a Plan’s recordkeeper or investment provider but the ultimate responsibility for notice maintenance and distribution remains with the Plan Sponsor. As a 3(16) fiduciary service provider, Hunnex & Shoemaker may handle required notices for Plan Sponsors if engaged to do so and subject to the limitations of certain payroll and recordkeeping platforms. If you have questions about our 3(16) notice services, please contact your H&S Plan Consultant for more information.
Disclaimer: This content is for informational purposes only and does not constitute legal, tax, or financial advice.
Written by: Sam Dart, on behalf of Hunnex & Shoemaker’s