John E. Chapman
Chief Executive Officer
As we move into the final quarter of 2025, October is the time to make sure your 401(k) plan is buttoned up for next year and fully prepared for the changes still to come. If you caught last month’s newsletter, we dove deep into the Roth catch-up transition and high-earner impacts. This month, we’re zeroing in on practical, year-end readiness steps to help you keep your plan on track and minimize compliance surprises come January.
What Should Plan Sponsors Be Doing Now?
1. Prepare for Enhanced Catch-Up Contributions (Super Catch-Up)
Employees ages 60-63 will soon be eligible to contribute up to an additional $11,250 through new “super catch-up” rules. Review your plan documents and coordinate with your recordkeepers to ensure you’re ready to implement these changes well before the December 2026 amendment deadline.
2. Annual Notice Checklist
Participant Fee Disclosure, Safe Harbor, Qualified Default Investment Alternative (QDIA), and auto-enrollment notices typically go out starting this month. Confirm templates with your recordkeeper/third-party administrator, verify mailing/email schedules, and double-check delivery logs; missed notices can mean headaches down the road.
3. Payroll & Data Precision
This is the moment to reconcile payroll data for FICA tracking and match eligibility, especially for high-earning participants. Making corrections now (rather than year-end) can streamline the Roth catch-up process and IRS reporting in 2026. For details on which employees are affected, see last month’s newsletter.
4. Fee and Fiduciary Benchmarking
October is ideal for a quick fiduciary check-up: review plan fees, investment menu performance, and provider contracts. A documented benchmarking report not only supports compliance but can signal strong governance should the Department of Labor come calling.
5. Error Correction: Don’t Wait
If there were any deferral or catch-up errors this year, notify your advisory and payroll teams ASAP. Earlier in the year is always easier for correction, whether it’s a W-2 adjustment or an in-plan Roth rollover—reference last month’s newsletter for step-by-step guidance on error management.
Next Steps
Let’s meet soon to review your compliance calendar, coordinate with your payroll and recordkeeping teams, and set up participant education for the “super catch-up” rollout. As always, the Clearwater team is here to support you every step of the way, so your plan can start 2026 ahead of the curve.
For more on Roth catch-up changes and participant communications, see our September newsletter. Questions? Reach out to your Clearwater Team, and we’d be pleased to assist you.
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