Do Employers Match Catch-Up Contributions?
Whether an employer matches catch-up contributions is not a universal rule but is determined by your specific retirement plan's design.
For employees over fifty, making additional contributions to their retirement plans is a common strategy to boost savings. These extra savings can substantially increase a nest egg, but they also raise a question: will an employer match these additional amounts? The answer is not straightforward and depends entirely on the specific rules established by the employer’s retirement plan. Understanding these rules is the first step for older employees looking to take full advantage of their workplace savings opportunities.
Defining Catch-Up Contributions
Catch-up contributions are a provision in the U.S. tax code that allows individuals aged 50 and over to make additional contributions to their retirement savings accounts, beyond the standard annual limit. To be eligible, an employee must reach the age of 50 by the end of the calendar year. This feature helps older workers accelerate their savings as they get closer to retirement.
The Internal Revenue Service (IRS) sets the limits for these contributions annually. For 2025, employees in 401(k), 403(b), and governmental 457(b) plans can contribute an additional $7,500. This is on top of the regular elective deferral limit of $23,500 for 2025.
A “super catch-up” provision takes effect in 2025 for those aged 60 through 63. These individuals can contribute an even higher amount, set at $11,250 for most plans. For SIMPLE plans, the standard catch-up is $3,500, and the super catch-up is $5,250. The option to make these contributions must be permitted by the employer’s plan.
Standard Employer Matching Formulas
Employer matching is a common feature in retirement plans designed to incentivize employees to save. The match is calculated using a formula set by the employer, and these funds are a form of additional compensation.
One common formula is a dollar-for-dollar match, where the employer contributes one dollar for every dollar the employee saves, up to a certain percentage of salary. For example, a company might offer a 100% match on the first 4% of an employee’s pay.
Another formula is a partial match, where an employer might match 50 cents for every dollar an employee contributes, up to the first 6% of their salary. Using an $80,000 salary, if the employee contributes 6% ($4,800), the employer would contribute $2,400. Some plans use a tiered formula, such as matching 100% on the first 3% of pay and 50% on the next 2%.
Employer Matching on Catch-Up Contributions
Whether an employer matches catch-up contributions is at their discretion, as there is no legal requirement to do so. The plan’s design and official documents dictate the policy. Many retirement plans are structured to match these additional contributions through a method known as “spillover.”
With the spillover method, the plan does not distinguish between regular and catch-up contributions on a per-paycheck basis. It treats all employee deferrals as regular contributions until the annual IRS limit ($23,500 for 2025) is reached. Contributions made after hitting that limit are then re-categorized as catch-up contributions. If the plan’s matching formula is based on total contributions up to a percentage of pay, this method allows catch-up dollars to be matched.
The SECURE 2.0 Act of 2022 permits plan sponsors to treat catch-up contributions as regular elective deferrals for calculating the employer match. This change provides employers with clear authority to match these amounts if they amend their plans to do so.
A related rule from the SECURE 2.0 Act takes effect in 2026. This provision will require employees with prior-year FICA wages exceeding $145,000 from the same employer to make their catch-up contributions on a Roth (after-tax) basis. If a plan does not permit Roth contributions, these high-earning employees will not be able to make any catch-up contributions.
How to Verify Your Plan’s Matching Policy
The definitive source for understanding your employer’s rules on matching contributions is the Summary Plan Description (SPD). This document is required by the Employee Retirement Income Security Act (ERISA) for most employer-sponsored retirement plans. Employers must provide the SPD to participating employees free of charge, and it is available through a company intranet, online benefits portal, or the human resources department.
When reviewing the SPD, look for sections with headings like “Matching Contributions” or “How the Plan Works.” Pay close attention to the definition of “compensation” used for calculating the match. If the plan’s definition of compensation includes all employee deferrals up to the plan’s limit, it is more likely that catch-up amounts will be matched.
The document should clearly outline the matching formula and any limits that apply. Search for specific language regarding “catch-up contributions” to see if they are explicitly included or excluded. If the language in the SPD is unclear, contact your HR department or the plan administrator for clarification.