The clock is ticking on SECURE 2.0 compliance, and for governmental plans, that clock may be moving faster than they can reasonably keep pace. As the sweeping retirement law continues to roll out with over 90 provisions across staggered deadlines, the National Association of Government Defined Contribution Administrators (NAGDCA) is once again urging the IRS and Treasury to provide additional relief—particularly on the controversial Roth catch-up mandate.

At the heart of the request is Section 603(b), which requires all catch-up contributions from employees aged 50 and over who earn more than $145,000 annually to be made on a Roth (after-tax) basis. Originally slated to take effect in 2024, the rule was temporarily delayed for two years, giving plan sponsors until 2026 to adapt. Collectively bargained plans—those negotiated under union contracts—were given an even longer grace period. But government-run retirement plans have not been afforded the same leniency, despite operating under arguably more complex administrative and legal frameworks.

Why Governmental Plans Face Unique Challenges

Public sector plans such as 457(b) and 403(b) arrangements are fundamentally different from their corporate counterparts. They often operate under state or local statutes, require extensive coordination with multiple agencies, and face procurement processes that can delay system upgrades by months or even years.

Unlike large private employers, many governmental entities must navigate budget cycles, legislative approvals, or multi-agency governance structures before implementing technical or procedural changes. Without final IRS regulations in place, plan sponsors are being asked to move forward in an environment of regulatory uncertainty—a scenario ripe for compliance missteps.

NAGDCA’s appeal for fairness reflects the reality that governmental employers are not resisting compliance, but rather grappling with the sheer complexity of implementing Roth catch-up requirements on compressed timelines.

The Broader Impact of SECURE 2.0

The Roth catch-up mandate is just one piece of the SECURE 2.0 puzzle. Across the retirement landscape, plan sponsors are juggling multiple provisions at once:

• Expanded automatic enrollment requirements for new plans.
• Increased catch-up contribution limits for individuals aged 60–63.
• Enhanced portability and rollover rules.
• Mandatory student loan payment matching provisions.

Each of these provisions introduces new recordkeeping demands, payroll integrations, and participant communications. For governmental plans, which often serve large, diverse employee populations, the challenge is magnified.

Why Compliance Is a Moving Target

Even as sponsors work to comply with existing provisions, the lack of finalized IRS guidance creates uncertainty. Questions remain about how Roth catch-up contributions should be tracked, how payroll systems should be updated, and how communication to participants should be structured.

This is more than an administrative headache. In today’s litigious environment, missteps—even unintentional ones—can translate into fiduciary risk under ERISA-like standards and heightened scrutiny from regulators. For public employers already under pressure to maintain employee trust, the stakes could not be higher.

How RetireBetter Supports Governmental Plans

This is where RetireBetter steps in. We understand that public sector organizations and non-profits face unique operational realities that can’t be solved with one-size-fits-all solutions. Our retirement plan services—including specialized 457(b) and 403(b) offerings—are designed to align with the distinct legal, administrative, and compliance needs of governmental plans.

Through a combination of:

• Expert Plan Administration: Handling day-to-day operations with precision and care.
• Proactive Compliance Monitoring: Tracking regulatory changes and implementing safeguards before deadlines hit.
• Participant-Centric Tools: Empowering employees with education, digital access, and support to make informed retirement decisions.

RetireBetter helps sponsors not just keep up with SECURE 2.0, but stay ahead of it.

Preparing for the Road Ahead

The call from NAGDCA underscores a simple truth: compliance is becoming a moving target. For government and non-profit employers, the question is not whether SECURE 2.0 will reshape retirement administration—it already has. The question is whether plans can adapt quickly enough to avoid disruption.

As new deadlines loom and regulations continue to evolve, modernization and expert guidance are no longer optional—they are essential. RetireBetter provides the tools and oversight that ensure plans remain compliant today while staying flexible for tomorrow.

Because in an era of complex legislation and rising fiduciary risk, government employers can’t just aim to comply. They need to future-proof their retirement plans.

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