Both SECURE 2.0 and the Big Beautiful Bill Act (OBBBA) include provisions that affect 401(k) contributions, especially for highly compensated employees (HCEs). Here’s what’s already in place for 2025 and what’s coming in 2026 . . .

2026 Dollar Limits

Let’s start with the inflation-adjusted contribution limits for 2026:

The maximum amount that can be contributed by an employee under age 50 is $24,500, up from $23,500 for 2025.

Employees age 50+ can make an additional catch-up contribution of $8,000 (up from $7,500 in 2025). A special catch-up contribution of $11,250 is available for employees ages 60-63 if the plan document allows.

Mandatory Roth Catch-Up Contributions for HCEs

In 2026, participants age 50+ whose FICA wages exceed $150,000 in 2025 must make their catch-up contributions on an after-tax “Roth” basis. These individuals will no longer be able to make pretax catch-up contributions.

In order for HCEs to make Roth catch-up contributions, the plan must allow these after-tax contributions. If a plan does not allow Roth contributions, HCEs will not be able to make catch-up contributions unless the plan is amended.

Tasks for Plan Sponsors Before January 1, 2026

• Ensure that 401(k) deduction limits are set at the correct 2026 levels in your payroll system

• Identify any employees whose FICA wages (Form W-2, Box 3) in 2025 are $150,000 or more and communicate the new rules to these HCEs

• Ensure that participant deductions are calculated correctly to distinguish between pretax and after-tax catch-up contributions

• If desired, visit with your 401(k) administrator to amend your 401(k) plan document if it does not already allow Roth contributions