Council amends town 457(b) plan to permit Roth catch-up contributions starting 2026

The New Shoreham Town Council voted Oct. 20 to amend the town’s 457(b) deferred-compensation plan to permit Roth catch-up contributions consistent with the Secure 2.0 mandate for age-based catch-up contributions.

Town staff explained that the federal Secure 2.0 law requires, beginning in an upcoming compliance cycle, that employees earning more than $145,000 in the prior calendar year who use age-based catch-up provisions must make those catch-up contributions on a Roth (post-tax) basis unless the plan offers an alternative. The town currently offers pre-tax 457(b) contributions; the amendment adds an option so employees who are eligible for the higher catch-up contribution can use Roth accounting for those additional catch-up amounts.

There was no cost to the town to make the plan amendment; staff described it as an administrative change to keep the town’s plan compliant and to preserve catch-up contribution opportunities for longer-service employees. A councilor moved to amend the plan’s contract with the plan administrator to permit Roth contributions effective Jan. 1, 2026; the motion was seconded and the council approved by voice vote.

Staff encouraged employees to use deferred-compensation vehicles, where appropriate, and to consult plan administrators or financial advisors about the tax implications of Roth vs. pre-tax contributions.

Action: council vote to amend the town 457(b) plan to permit Roth catch-up contributions effective 2026-01-01.