One of SECURE 2.0’s interesting provisions was that people who are highly compensated employees (HCEs) will be forced to make the catch-up contributions they want on an after-tax basis. That provision was a revenue generator for the Federal government, which is a necessary evil for tax laws, that offer some sort of tax relief.

While employers and plan providers are begging for a delay for this provision, which is supposed to be effective January 1, 2024, my greater concern is that the elimination of having tax-deferred savings in catch-up will increase the chances that the Federal government, could one day, eliminate the tax-deferred aspect of participant 401(k) deferrals. Requiring Roth treatment of some or all salary deferral contributions will likely mean that people will defer less because upfronting the taxes is a huge burden these days. Just my two cents.