Announcements

September 25, 2023

We continue to await IRS guidance on SECURE 2.0 Roth contributions

The SECURE 2.0 Act of 2022, passed by Congress in December, included several provisions related to Roth after-tax retirement contributions. Beginning in tax year 2023, the Act allows 401(k) plan sponsors to give employees the option to take employer contributions on a Roth after-tax basis. The Act also enables SEP and SIMPLE IRA plans to accept Roth after-tax contributions in addition to traditional pre-tax contributions.

As a leading retirement plan provider, Capital Group is committed to offering Roth employer contributions in our PlanPremier® and RecordkeeperDirect® 401(k) solutions, as well as Roth options for our SEP and SIMPLE IRA plans.

However, clarification from the IRS is needed on several aspects of the provisions, including how to report employee taxes on Roth employer contributions. As a result, the timing of these features remains unknown as we and other recordkeepers continue to await IRS guidance. We’ll communicate updates as they’re available.

For more information on Roth employer contributions and other SECURE 2.0 Act provisions, review this summary guide. 

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