submitted by vachta@augsburg.edu
Effective January 1, 2026
We are updating our 403(b) plan to offer new retirement saving options for eligible employees.
1. New Roth Contribution Option
– What it is: You can now direct your regular employee contributions to a Roth 403(b) account.
– Roth Benefit: Contributions are made after taxes, and all qualified withdrawals (contributions + earnings) are tax-free in retirement.
– Action: You will be able to choose between the existing pre-tax option or the new Roth option beginning December 29, 2025. Employees must opt in to the Roth contribution option.
2. Mandatory Roth Catch-Up Contributions (SECURE 2.0 Act)
– Who is affected: Employees age 50 or older who had FICA wages exceeding $150,000 in 2025.
– The Change: In compliance with federal law, any catch-up contributions you elect to make in 2026 MUST be designated as Roth (after-tax). Pre-tax catch-up contributions will no longer be available to those who meet this threshold.
– Action: If this applies to you, your catch-up contributions will automatically be designated as Roth.
Want to learn more about after-tax Roth contributions?
Compare Roth & Pre-Tax Contributions: https://web.augsburg.edu/hr/2026benefits/403bRoth.pdf
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