“Value of Benefits” Focuses on Roth Resources for 401(k) Plan Participants

Do your 401(k) Pension Plan participants understand the difference between making pre-tax and Roth contributions to their 401(k) account?

As participants in the 401(k) Plan, they can choose to make either type of contribution—or both. But these decisions can be confusing. How can participants decide which approach makes the most sense for them?

As part of the Value of Benefits campaign, you have access to a new two-minute video that helps explain differences between the two strategies. The video highlights how take-home pay and distributions in retirement are affected when making each kind of contribution.

There are also additional resources available on the Employee Benefits website to help your employees understand the Roth option:

• About Roth Contributions, a page where participants can read more and also access the next two items.
• The Roth Analyzer tool, a calculator that lets participants model different contribution scenarios.
• The Understanding Roth Contributions brochure, which provides additional detail about how Roth contributions and withdrawals work. You can also request print copies of the brochure for your employees by calling or emailing the Member Contact Center at 866.673.2299 or contactcenter@nreca.coop; request publication RMBR18021.

New catch-up rules involve Roth
Starting January 1, 2026, any catch-up contributions to a 401(k) account that are made by high-earning employees must be made as Roth contributions, according to the SECURE 2.0 Act. A “high earner” is defined as an employee who earned more than $145,000 in FICA wages during the previous year; this value will be indexed for inflation. Look for more information about this change and impacts to payroll and compliance reporting in the coming weeks.