How 401(k) Sponsors Can Help Employees Maximize the New Super Catch Up Contributions

More than half of American workers feel they are behind on retirement savings according to a recent Bankrate survey. [i] Some individuals are not just worried—they’re wondering if retirement will ever be a reality. But here’s the good news: a new provision under the SECURE 2.0 Act could be the lifeline your older employees need, allowing them to save significantly more for a few years. The catch? One survey found that 55% of eligible workers don’t even know this time-sensitive opportunity exists. [ii] That’s where you come in. In this article, we’ll break down the new Super Catch Up Contributions, explain why they matter, and show you how to help your employees take full advantage of this powerful benefit.

New for 2025: Super Catch-Up Contributions for Older Workers

Since 2002, the Economic Growth and Tax Relief Reconciliation Act has allowed workers aged 50 and above to make catch-up contributions. This feature enabled older employees to save a bit more annually, helping them bolster their retirement savings as they approached the end of their careers.

However, the SECURE 2.0 Act takes this capability to a new level with the introduction of a “super catch-up” provision starting in 2025. This significant enhancement enables employees aged 60 to 63 to contribute about $11,000 more annually on top of the existing contribution limits. Unfortunately, not everyone is aware of this, which may mean lost opportunities.

How It Works: A Closer Look at Super Catch-Up Contributions

The new super catch-up provision is designed to help employees in their early 60s save more during what is often their peak earning period. Beginning in 2025, employees aged 60 to 63 can contribute an additional amount equal to the greater of $10,000 or 150% of the regular catch-up limit for that year. For 2025, this amount is projected to be $11,250. This amount is on top of the standard 401(k) contribution limit and the traditional catch-up contributions for employees over 50, which means eligible employees could save as much as $34,750 in a single year.

This opportunity is time-sensitive: once employees turn 64, the standard catch-up limit of $7,500 applies. Because the window is limited, plan sponsors should communicate these changes effectively, helping employees take full advantage of this enhanced savings opportunity.

Which Plans Are Eligible for Super Catch-Up Contributions?

The new super catch-up contribution provision applies to several types of employer-sponsored retirement plans, including:

401(k) plans
403(b) plans
Governmental 457(b) plans
SIMPLE IRAs (with adjusted limits specific to these plans)

However, not all retirement plans automatically offer catch-up contributions, and employers need to review their plan documents to determine if these features are already included. If your plan doesn’t currently allow catch-up contributions—or if it isn’t structured to accommodate the new super catch-up provisions—it’s essential to take action now if you’d like to add it.

How Plan Sponsors Can Prepare

You may need to update your plan and communication strategy to ensure your employees can take advantage of super catch-up contributions. While you need to work closely with your retirement plan professionals to do this, here are general steps to consider:

Update Plan Documents: If you haven’t already, work with your plan administrator to amend your retirement plan documents to include the new contribution limits and age-specific provisions.
Coordinate System Adjustments: Collaborate with payroll providers and recordkeepers as needed to update contribution tracking systems. This step is critical to ensure accuracy and prevent errors when employees begin making larger contributions.
Communicate Proactively: Employees can’t benefit from these changes if they’re unaware of them. It’s crucial to create an engaging communication strategy to inform eligible employees about the new limits, emphasizing the benefits of maximizing contributions. For best results, we recommend using multiple channels—emails and webinars, for example, to reach employees effectively.

Key Takeaway: Strengthening Financial Futures for Everyone

The super catch-up provision represents a win-win for both employees and employers. Employees can build greater financial security during a critical time in their careers, while organizations can achieve a more retirement-ready workforce. So, if you haven’t already, take action now to ensure your team can benefit from this unique opportunity before it’s gone.