The Roth Catch Up Contribution Requirement and a Statutory Merger

As the Roth catch-up contributions become effective this month, issues not addressed in the final regulations are coming to light.

Question: Our company completed a statutory merger — how does that impact the Roth catch-up contributions requirement?

Answer: Based on past IRS guidance, it is more than likely that an employee of either company in a statutory merger that was subject to the Roth catch-up contribution requirements of SECURE 2.0 Act prior to the statutory merger will continue to be subject to the Roth catch-up contribution requirements after the merger. Similarly, if the statutory merger occurs midyear, the employee’s compensation for the year of the merger will include compensation paid by either entity.