Employees ages 50 and over can make additional contributions to voluntary retirement plans on top of regular IRS limits. Starting in 2026, high earners must make these extra contributions, known as catch-up contributions, as Roth (after-tax) contributions.
Does this apply to me?
This requirement applies to you if:
- You are eligible to make catch-up contributions. (You’re at least age 50 as of December 31, 2026.)
- You earned $150,000 or more in 2025 with a single employer. (This number is per Box 3 on your W-2—your reported 2025 FICA eligible earnings—and is not cumulative. That means that if you have more than one employer, your cumulative income does not count toward the limit.)
- For reference, you'll receive your University W-2 at the end of January.
If you are eligible to make catch-up contributions and your 2025 University earnings are at least $150,000, OHR will email you in January or February to remind you of this change.
Examples of employees with multiple employers
| Example | Age (as of December 31, 2026) | UMN compensation | Second job compensation | Do any catch-up contributions need to be made as Roth? |
|---|---|---|---|---|
| UMN employee #1 | 50 | $120,000 | $35,000 | No (employee doesn’t make $150,000 with a single employer) |
| UMN employee #2 | 60 | $150,000 | $35,000 | Yes, only with University plans |
| UMN employee #3 | 60 | $150,000 | $150,000 | Yes, with both employers' plans |
| UMN employee #4 | 45 | $150,000 | $150,000 | No (employee is not eligible for catch-up contributions) |
How will this happen?
If this requirement applies to your University position, any catch-up contributions you make to the University’s Optional Retirement Plan (ORP) or 457 Deferred Compensation Plan (457 Plan) will be made as Roth. This will happen automatically once you meet the regular limit and continue until you reach your catch-up limit. Learn more about IRS limits and your UMN retirement plans.
Special considerations
- If you hold a position outside of the University of Minnesota (such as with University of Minnesota Physicians) and earned more than $150,000 with that employer in 2025, please contact your retirement plan administrator to discuss your options.
- These limits apply separately to the ORP and 457 Plan.
What are Roth contributions?
The key difference between Roth and pretax contributions is that Roth contributions are taxed when you make them, unlike pretax contributions. When you withdraw Roth funds, you don’t pay taxes on your contributions or earnings as long as:
- You’re at least age 59½.
- It has been at least five years since your first Roth contribution.
What do I do next?
We encourage everyone affected by this new requirement to meet with Fidelity, your financial advisor, or your tax preparer to discuss your personal situation.
You can contact Fidelity at 800-343-0860 with any questions. Or, set up a free one-on-one meeting with a Fidelity financial consultant to discuss your situation in depth.