1. Localization Information Guide
  2. Eligibility for Pretax Catch-Up Contributions for Deferred Compensation Plans

Eligibility for Pretax Catch-Up Contributions for Deferred Compensation Plans

Per the SECURE 2.0 Act, all catch-up contributions to qualified retirement plans are subject to Roth tax treatment. Employees earning less than $145,000 in eligible pay (indexed) in the prior calendar year can continue to make age-based pretax catch-up contributions to their deferred compensation plans.

Note: It's your responsibility to accurate identify employees who are eligible for plan enrolment. For further info, see the Oracle Fusion Cloud Human Resources Implementing Benefits Guide on the Help Center.

Pretax catch-up contributions apply to these plan types.

  • 401 (k)

  • 403 (b)

  • 457 (b)

Opt-out individual employees

Employees opt in to these contributions by default. These contributions include the catch-up contributions for employees who have enrolled in and contribute to a pretax deferred compensation plan, such as 401 (k), 403 (b), and 457 (b).

You must manually opt-out employees who:

  • Are ineligibile to contribute to an age-based pretax catch-up plan

    Note: It's your responsibility to ensure employee eligibility and ineligibility.

  • Have requested to opt out (such as high earners)

To opt-out an employee, do the following prior to processing the first payroll of the calendar year:

  1. Start the Calculation Cards task.

  2. Search for and select the person.

  3. Open their reporting information card for editing.

  4. Add the Reporting Information calculation component under the Federal component group.

  5. Under the calculation component details, set Eligible for Pretax Age Catch-Up Contributions to No.

  6. Click Save and Close.

You can do this for multiple employees through HCM Data Loader. See the next section for instructions.

Update calculation cards with HDL

You can use HCM Data Loader (HDL) to enable or disable these contributions for multiple employees.

Here's a sample CalculationCard.dat file you can use as a template.

METADATA|CalculationCard|LegislativeDataGroupName|DirCardDefinitionName|PayrollRelationshipNumber|EffectiveStartDate|EffectiveEndDate|CardSequence
MERGE|CalculationCard|PM US Sun Power|Reporting Information|300100006485851|2023/01/01|4712/12/31|1

METADATA|CardComponent|LegislativeDataGroupName|DirCardDefinitionName|PayrollRelationshipNumber|EffectiveStartDate|EffectiveEndDate|DirCardCompDefName|CardSequence|ComponentSequence|Context1
MERGE|CardComponent|PM US Sun Power|Reporting Information|300100006485851|2023/01/01|4712/12/31|Reporting Information|1|1|

METADATA|ComponentDetail|LegislativeDataGroupName|DirCardDefinitionName|PayrollRelationshipNumber|CardSequence|EffectiveStartDate|EffectiveEndDate|DirCardCompDefName|ComponentSequence|DirInformationCategory|FLEX:Deduction Developer DF|_LEGAL_REPRESENTATIVE_Display(Deduction Developer DF=HRX_US_REP_REL)|_CORPORATE_OFFICER_Display(Deduction Developer DF=HRX_US_REP_REL)|_ELIGIBLE_FOR_RETIREMENT_PLAN_Display(Deduction Developer DF=HRX_US_REP_REL)|_PROBATIONARY_CODE_Display(Deduction Developer DF=HRX_US_REP_REL)|_REP_LOC_FOR_WORK_AT_HOME_Display(Deduction Developer DF=HRX_US_REP_REL)|_FAMILY_MAJORITY_INTEREST_Display(Deduction Developer DF=HRX_US_REP_REL)|_ADP_SPCL_PROC_REQ_DisplayValue(Deduction Developer DF=HRX_US_THIRD_PARTY_INTERFACES)|_ADP_SPCL_SORT_CODE(Deduction Developer DF=HRX_US_THIRD_PARTY_INTERFACES)|_US_ELIGIBLE_FOR_PRETAX_CATCHUP(Deduction Developer DF=HRX_US_REP_REL)
MERGE|ComponentDetail|PM US Sun Power|Reporting Information|300100006485851|1|2023/01/01|4712/12/31|Reporting Information|1|HRX_US_REP_REL|HRX_US_REP_REL|||||||||N

Use the database item

The ORA_HRX_US_REP_CARD_ELIGIBLE_PRETAX_CATCHUP database item captures the value of the Eligible for Pretax Age Catch-Up Contributions field. You can use this item in any of your fast formulas to read the value.

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