Dear COBA Members,

If you’re age 50 or older and make catch-up contributions into the Nassau County Deferred Compensation 457(b) Plan, there’s a new federal rule to be aware of starting in 2026. Under the SECURE 2.0 Act, participants who made $150,000 or more in FICA wages in the previous year must make their catch-up contributions as Roth (after-tax) contributions.

What are FICA wages?

FICA wages are the part of your pay that is taxed to fund Social Security and Medicare under the Federal Insurance Contributions Act (FICA). This includes your regular salary or hourly pay, bonuses, overtime, and some taxable benefits.

‌

The SECURE 2.0 Roth catch-up rule has a trigger: If your prior-year FICA wages exceeded $150,000 from a single employer, your catch-up contributions must be Roth in the following year. This threshold, which you can find in Box 3 of your 2025 W-2 (when it’s available early next year), is indexed for inflation and may increase on an annual basis.

What does this mean for you?

• Effective in 2026, if your 2025 FICA wages are $150,000 or more, any age 50+ catch-up or age 60-63 catch-up contributions into the Nassau County Deferred Compensation 457(b) Plan must be made as Roth contributions. This rule is mandatory under the SECURE 2.0 Act.
• Roth contributions come out of your paycheck after taxes have been deducted. However, withdrawals in retirement, including earnings, are generally tax-free when you take a qualified distribution (as long as you’ve held your account for five years and reached age 59½, or upon death or disability).¹
• Only your age-based catch-up contributions are changing. Your regular and special three-year catch-up contributions can still be made pre-tax.²
• If you earned less than $150,000 in FICA wages in 2025, or if you don’t pay FICA taxes, your catch-up contribution options will not change in 2026.

To ensure your financial goals stay on track, consider meeting with your local Nassau County Retirement Plan Advisor to review and adjust your strategy in light of these new rules.

‌

Reminder: Catch-up contributions are those which exceed the normal IRS limit and can increase annually. For 2026, contributions under $24,500 are not affected by this new rule. You may contribute an additional $8,000 if age 50+, or an additional $11,250 if age 60-63.

Take advantage of all that the Nassau County Deferred Compensation 457(b) Plan offers by logging in your account by clicking  empower.com/nassaucounty today or by visiting Andrew Estriech in the Officer's Mess Hall every Thursday .