Voluntary Plan Changes for 2026
Significant Change in 2026 to Catch-Up Contributions for High Earners
Starting January 1, 2026, under the federal Secure 2.0 Act, Section 603, catch-up contributions will be required to be made as Roth (post-tax) contributions for high earners.
Who is eligible to make catch-up contributions? Individuals who are age 50 or older can contribute an additional $8,000 over the general voluntary contribution limit, $24,500. Those who will be between the ages of 60-63 as of December 31, 2026, will be able to contribute $11,250 as their catch-up contribution instead of $8,000 for the VIP plan with TIAA only. The DCP plan’s catch-up limit is $8,000 for all employees age 50 and older.
Is this applicable to everyone over 50 who make catch-up contributions? No, it is only those who make $150,000 or more in 2025.
What retirement plans is this applicable to? At WSU the voluntary plans this applies to are the 457b Deferred Compensation Plan (DCP) through Department of Retirement Systems (DRS) and the 403b Voluntary Investment Plan (VIP) through TIAA. NOTE: Since these are under two different tax codes, maximum contributions could be made to both of these plans.
WSURP participants please note: If you are contributing at the 10% level, the employee 2.50% contribution counts toward the $24,500 limit for the VIP plan. If you participate in the DCP your 2.50% contribution does not impact this limit.
Examples:
2025 Earnings under $150,000
If your 2025 earnings are under $150,000 you can contribute the following amounts:
Regular Contribution: Up to $24,500, as pre-tax, Roth or a combination
Catch up Contribution DCP: Up to $8,000 as pre-tax, Roth or a combination
Catch up Contribution VIP: Up to $8,000 or $11,250, depending on age, can be pre-tax, Roth or a combination
2025 Earnings equal to or over $150,000
If your 2025 earnings are equal to or over $150,000 you can contribute the following amounts:
Regular Contribution: Up to $24,500, as pre-tax, Roth or a combination
Catch up Contribution DCP: Up to $8,000, MUST be Roth contributions
Catch up Contribution VIP: Up $8,000 or $11,250, depending on age, MUST be Roth contributions
If over 50, and you will earn $150,000 or more in 2025, and you want to capitalize on pre-tax contributions, look at contributing to both of the voluntary retirement plans (DCP and VIP), keeping the contributions at the regular limit of $24,500 or less. If you currently are only participating in one of these plans, you can participate in both and do the regular limit as pre-tax into both. For Example:
Regular Contribution: $49,000 as pre-tax contributions, being $24,500 into the DCP and the VIP accounts
Catch up Contributions: $16,000 as Roth contributions, equating to $8.000 into the DCP and VIP contributions
Catch up Contributions for those 60-63: $19,250 as Roth contributions, equating to $11,250 into the VIP contributions and $8,000 into the DCP.
How the additional 2.5% optional portion of the WSURP impacts the VIP contribution? Since the 7.5% is a required contribution, and the 2.5% is optional, the 2.5% counts towards the $24,500 general elective contribution limit.
Example: An employee earns $180,000 a year, and is over 50
$13,500: required 7.5% annual contribution to the WSURP
$4,500: optional 2.5% annual contribution to the WSURP
$24,500 – $4,500 = $20,000 can be contributed to the general contribution limit
$8,000: Additional catch-up contribution in addition to the $20,000 for a total of $28.000
$11,250: Additional catch-up contribution for employees between 60-63. When added to the $20,000, the total contribution would be $32,250.
Visit the Voluntary Retirement Plans website for information on the voluntary plans. Questions can be directed to HRS Benefits at hrs.benefits@wsu.edu or 509-335-4589.