BENEFITS EVENTS CALENDAR
A Roth 403(b) is a tax-advantaged retirement savings plan available to employees of public schools, nonprofit organizations, and religious institutions. Contributions are made on an after-tax basis, meaning taxes are paid upfront; however, qualified withdrawals in retirement—including all investment earnings—are completely tax-free.
You may take tax-free withdrawals of both your Roth contributions and associated earnings once you reach age 59½, provided your first Roth contribution was made at least five years earlier. This feature can offer a meaningful advantage over pre-tax contributions, which are subject to federal income tax at your applicable tax rate upon withdrawal.
Special Note for Plan C Participants: Unlike pretax contributions, which are eligible for matching contributions, Roth Plan contributions do not receive matching contributions.
Important Update Regarding Catch-Up Contributions
Effective January 1, 2026, a new federal requirement under the SECURE Act 2.0 will affect how certain employees may make catch-up contributions to their retirement plans. Under this rule, eligible employees will be required to make any catch-up contributions on an after-tax Roth basis. For these individuals, pre-tax catch-up contributions will no longer be permitted once the annual IRS elective deferral limit under Section 402(g) has been reached.
This requirement applies to employees who meet both of the following criteria:
- Will be age 50 or older by the end of the current calendar year, and
- Earned FICA wages from the University exceeding $150,000 (subject to annual indexing) in the immediately preceding calendar year.
If you meet both conditions, any contributions made above the standard annual elective deferral limit for the year must be designated as Roth (after-tax) contributions. Contributions made up to the standard limit may continue to be allocated as either pre-tax or Roth, based on your existing election.
No action is required unless you wish to avoid making Roth catch-up contributions. In that case, you must submit a new Salary Reduction Agreement for Plan A or Plan C to ensure your total contributions do not exceed the standard annual elective deferral limit for the year.
If you have questions about how this change may impact your retirement planning or tax strategy, we encourage you to consult with your financial advisor.
Vanguard Participants: To find out how the new federal change affects you, click this link Roth catch-up participant web portal and enter your plan number:
Plan Name Plan ID
CWRU Plan C CWR-099016
CWRU Plan A CWR-090272