Helping Your Participants "Catch Up"

Helping Your Participants "Catch Up"

Catch-up today!

We know that you know that one of the best ways to help participants prepare for retirement is to encourage them to start contributing to their accounts early. What you may not know is that participants who may have gotten a late start on planning or who want to contribute more to their accounts as they near retirement may be eligible to make additional “catch-up” contributions.

Catch-up contributions are an opportunity for eligible participants who are 50 years of age and older to make additional deferrals to their 401(k), 403(b) and governmental 457(b) plans.  Participants who are, or will become, age 50 during the calendar year are eligible to make catch-up contributions; however, at least one of four limits must be exceeded before amounts can be considered catch-up. The applicable limits are:


  • The maximum dollar deferral limit ($19,000 for 2019; $19,500 in 2020)
  • The annual additions limit, which is the lesser of 100 percent of compensation or the annual additions dollar limit (($56,000 for 2019; $57,000 in 2020)
  • The plan’s deferral limit
  • The actual deferral percentage limit for a highly compensated employee in a particular plan year


Plans are not required to permit for catch-up contributions; however, according to research from the Plan Sponsor Council of America (PSCA), 97.1 percent of all 401(k) plans allow for these contributions. If you sponsor multiple plans, it is important to know that if one plan permits catch-up contributions, all of the plans must allow for them.

As your employees approach retirement, you should enhance their education and communication efforts. Information about catch-up contributions may help many plan participants better prepare for retirement. For more information about catch-up contributions and other topics for participants nearing retirement, visit the nearing retirement section of One Day is Today!

Note: Provided content is for overview and informational purposes only and is not intended as tax, legal, fiduciary, or investment advice.

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