Employer Update

Employers participating in the Commonwealth of Virginia 457 Deferred Compensation Plan must follow new rules for age-based catch-up contributions under the federal SECURE 2.0 Act (Section 603).

Key Requirement

Employees who earned $150,000 or more in FICA wages in the prior year must make age-based catch-up contributions as Roth after-tax contributions. This requirement applies only to age-based catch-up contributions based on age eligibility. Standard catch-up contributions, which require VRS approval, are not subject to this post-tax rule.

Employer Action Steps

• Create the Mandatory Roth Catchup indicator file, which should be provided to Voya by January 31, 2026.
• Monitor prior-year FICA wages. If wages exceed $150,000, age-based catch-up contributions must be Roth.
• Remind employees to plan ahead. For participants who reach the pre-tax limit early, pre-tax deferrals will stop until a Roth election is made, which may impact employer match contributions.
• Hybrid Retirement Plan members: Voluntary contributions remain pre-tax only. Calculate voluntary contributions first, then determine remaining supplemental plan limits.

Resources

• Job Aid: Instructions for creating the Mandatory Roth Catch-up (MRC) indicator file. Submit annually; updates accepted throughout the year.
• Reporting: Use the sample MRC file to identify affected participants.
• Webinar: Watch the recorded Defined Contribution Employer Secure 2.0 overview.
• Additional support: Reach out to Voya Employer Support for additional assistance by phone at 844-570-1482 or by email at DCPERSSupport@voya.com.