Payroll Pulse: 5 Updates That May Impact Your Retirement Plan

New retirement plan provisions are rolling out, and several updates impact employer responsibilities and payroll processes

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Retirement legislation continues to evolve, and the Secure Act 2.0 introduces several changes that may impact how employers manage retirement plans and payroll deductions.

To help keep things simple, here are a few highlights employers should be aware of.

Automatic Enrollment for New Retirement Plans

Beginning in 2025, most newly established 401(k) and 403(b) plans must automatically enroll employees with a starting contribution rate between 3% and 10% of salary. The rate will increase gradually each year.

Expanded Catch-Up Contributions

Employees ages 60 to 63 will soon be able to make higher catch-up contributions to their retirement plans. This creates new contribution limits that payroll systems must accommodate.

PayOptions will be able to accommodate this change however we will need your Date of Birth in order for correct calculation. If this additional catch-up contribution is applicable to you or your employees please get with your payroll processor to ensure proper setup.

Roth 401k Catch-Up Requirement for High Earners

Starting in 2026, employees earning over $150,000 in 2025 will be required to make catch-up contributions as Roth (after-tax) contributions rather than pre-tax.

It is critical that you get with your 401k record keeper to ensure this Roth Catch Up category is established on your plan. PayOptions will be reviewing income totals for 2025 and will defer any catch up contributions to Roth deductions in 2026.

Student Loan Matching Contributions

Employers can now choose to match employees’ student loan payments with contributions to their retirement plan, helping employees save for retirement while paying down debt.

Expanded Access for Part-Time Employees

Long-term part-time employees will become eligible to participate in retirement plans sooner, expanding access for more members of your workforce.

At PayOptions, we stay on top of evolving payroll and compliance requirements so you don’t have to.

Questions about Secure Act 2.0?
Your PayOptions team is here to help you navigate compliance updates and payroll changes with confidence.

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