Plan Sponsor News

IRC Section 402(g): the maximum amount an individual can contribute in elective deferrals to certain retirement plans for a calendar year. For 2026, this amount is $24,500.
IRC Section 415(c): the maximum amount that can be allocated to an individual participant’s account in a defined contribution retirement plan during a given year. These total contributions (employee plus employer) include elective deferrals, employer matching, profit-sharing and after-tax contributions (but not rollovers). For 2026, this amount is $72,000.
Note: Employer matching contributions are included in the IRC Section 415(c) annual additions limit, even if they are made based on employee catch-up contributions; however, the employee catch-up contribution is not.

The following employee elective deferrals are in addition to the 402(g) limits above:

Age 50+ catch-up contributions: Individuals turning age 50 or older during the year can contribute up to an additional $8,000.

SECURE 2.0 Act enhanced “super” catch-up for participants attaining age 60, 61, 62 or 63: Individuals turning 60, 61, 62 or 63 can contribute an additional $3,250.
Note: Beginning in 2026, catch-up and enhanced catch-up contributions must be made on a Roth basis if the participant earned at least $150,000 in FICA wages in 2025.

How to Avoid Exceeding Limits

Mutual of America Data Validation Web (DVW) will track contributions per participant throughout the year and will alert you if a participant’s contributions exceed the annual limit. Talk to your Mutual of America CRM for more information about DVW.
Coordinate with payroll vendors to monitor limits. Your payroll vendor may monitor contribution limits for you. You should consult with your vendor to see if that is a service they provide.
Conduct year-end reviews. As the year-end approaches, it is prudent to review the annual contributions made to the plan to make sure your participants are not overcontributing.
Educate employees on contribution caps.
Include information on contribution limits when onboarding, including that the 402(g) limit is per individual, per year and not plan specific.
For employers with non-calendar-year plans, keep in mind that these are calendar-year limits.

Pro Tip: Contribution Limits and Onboarding Guidance

When onboarding new employees or enrolling participants into retirement plans, it’s important to communicate the IRS contribution limits, especially the 402(g) elective deferral limit. For 2026, this limit is $24,500, and it applies per individual, per calendar year, not per plan. This means that if an individual participates in multiple retirement plans (e.g., works for two employers offering separate 401(k) plans), their combined elective deferrals across all plans cannot exceed the $24,500 limit.

This distinction is crucial for compliance and helps participants avoid excess contributions, which can result in tax penalties. Including this information during onboarding ensures participants understand their annual limits and can plan their contributions accordingly.

How to Fix It

If an error does occur, here’s information on how to fix it:

Distribute excess deferrals to the participant by April 15 of the following year to avoid penalties.
After April 15, there may be tax and penalty implications for the participant and plan sponsor. It is considered an operational failure for plan sponsors.

Four Ways Mutual of America Helps

For clients who use DVW, we automatically monitor contributions, reject excess contributions and notify the plan sponsor if a participant exceeds 415(c) or 402(g) limits. (Note: given the information we have, which does not include previous employers. We track per participant, per plan contributions.)
For exclusive and coordinated services clients, we test for compliance with contribution limits during annual compliance testing.
Should an error occur, we can help with corrections.
We provide tools and education for your employees. Download our 2026 IRS retirement plan numbers participant tool.  

Final Tip

By staying informed, working closely with plan services providers, conducting regular reviews and educating your plan participants, you can keep your plan compliant while helping your participants maximize their retirement benefit. Should an error occur, we’re here to help. Reach out to your CRM with questions.

On December 11, Mutual of America Financial Group held a webinar covering SECURE 2.0 Act key provisions and insights that plan sponsors need to know about for 2026, including:

Expanded long-term, part-time (LTPT) worker coverage, including eligibility and vesting requirements, and compliance considerations.
Roth catch-up contributions, including employer responsibilities, employee eligibility, benefits and deadlines.
How Mutual of America is supporting compliance and education, as well as the next steps needed for your organization’s retirement plan.

Watch a replay of “SECURE 2.0 Act: What’s Coming in 2026,” with speakers Troy Johnson, Executive Vice President, Head of Service and Sales – West; Nick Curabba, Senior Vice President and Associate General Counsel; and Morgan Pace, Vice President, Client Relationship Manager Operations.

Contact your regional Mutual of America Financial Group representative with any questions you may have about how this information may affect you and your employees.

When it comes to retirement, almost 9 out of 10 employees (87%) are counting on Social Security to be a source of income; yet only 69% say they understand how the program works.¹ This is an opportunity for plan sponsors to support employees with information to help current and future decision-making.

Social Security Is Not Meant to Be the Only Source of Retirement Income

Before we get into the how the program works, perhaps the most important insight that employees need to know is that Social Security is not meant to be the only source of income for people when they retire. Social Security functions as a form of longevity insurance. It provides a guaranteed stream of inflation-adjusted income for life.

The following facts from the Social Security Administration’s Understanding the Benefits booklet may help employees understand the gap between the amount provided by Social Security and the amount needed to retire comfortably.

Social Security replaces a percentage of a pre-retirement income. Two factors determine this percentage:

A workers’ lifetime earnings and
When they choose to start taking benefits in relation to the “full retirement age.”

The estimated average 2025 monthly Social Security benefit for all retired workers is $1,976. Approximate percentage ranges of pre-retirement income provided by Social Security for a worker taking benefits at age 67 are:

79% for low earners
43% for medium earners
28% for maximum earners

In contrast, most financial advisers recommend workers will need about 70% to 80% of pre-retirement income—including Social Security benefits, investments and personal savings—to live comfortably in retirement.

Social Security: Five Things to Know

While there are different Social Security benefits available— disability, survivor, family, Supplemental Security Income and Medicare—our focus here is retirement benefits.

Social Security is funded through payroll taxes (commonly referred to as FICA) deducted from employees’ paychecks. Social Security tax is currently 6.2% and Medicare 1.45% from both employee and employer.
Monthly benefits typically become available beginning at age 62 if an employee has worked and paid into Social Security for at least 10 years. The years do not have to be consecutive but are based on a credit system where an employee can earn up to four credits per year for each $1,810 earned based on 2025 numbers (adjusted each year).
The amount employees will receive is impacted by their age when applying for benefits (between 62 and 70), lifetime earnings and other factors, such as taxes on benefits or Medicare Part B premiums (in 2025, the standard monthly premium for Medicare Part B is $185).
Employees are entitled to their full benefits once they reach full retirement age—between ages 66 and 67, depending on birth year.
Applying for benefits is allowed up to four months before the first payment.

Considerations in Deciding When to Take Benefits

Deciding when to receive Social Security is an individual choice; however, monthly benefits will be larger the later the start date.  Weighing a range of factors, from anticipated financial obligations to expected longevity, is generally advised before making the decision.

Your employees may choose to apply for Social Security while still working. Doing so, they should be aware of yearly earnings limits that could reduce their benefit amount if they’ve not yet reached full retirement age.  

Employees Can Get a Social Security Benefits Estimate

The good news is that employees can get estimates of their Social Security retirement benefits and compare the effects of beginning to take benefits at different ages by creating a personal my Social Security account at www.ssa.gov/myaccount.

Regardless of when they claim benefits, employees likely want to plan for additional income sources in retirement, including, of course, taking advantage of their workplace plan.

¹EBRI Retirement Confidence Survey Funders Report, Slide 7.