P&G Savings Plan: Super Catch-Up Contribution Delay
Changes to Catch-Up Contributions
Beginning in 2025, retirement savings opportunities for individuals aged 60 to 64 will see significant enhancements, particularly regarding catch-up contributions to the P&G Savings Plan.
Previously, workers aged 50 and older could contribute additional amounts beyond standard contribution limits. Under the new rules, certain individuals can now contribute even more than the standard catch-up contribution.
Increased Catch-Up Contribution Limits
Starting in 2025, individuals aged 60, 61, 62, and 63 will be eligible to contribute 150% of the standard catch-up contribution limit for that year. For example, if the standard catch-up limit in 2025 is $7,500, those in the designated age group will be able to contribute up to $11,250. This change aims to help workers maximize their retirement savings during their peak earning years, providing a crucial boost before retirement.
Implementation Challenges for the P&G Employee
If you are a P&G employee who is at least 60 years old but not yet 64, you may be wondering why your Savings Plan does not yet reflect the higher super catch-up contribution limit. This delay is due to the structure of the P&G PST and Savings Plans.
Unlike the calendar-year structure of federal tax laws, the P&G Savings Plan follows a fiscal year that runs from July 1 through June 30. As a result, when tax laws change, their implementation within the plan is generally delayed until the subsequent fiscal year.
Practical Impact
- Until June 30, 2025, all catch-up contributions to the P&G Savings Plan remain capped at the 2024 maximum of $7,500, even for those aged 60 thru 63.
- Starting July 1, 2025, the enhanced catch-up contribution limit of $11,250 will likely take effect for eligible employees.
Another layer of complexity arises from the calendar-year structure of tax laws when interacting with the Plan’s fiscal year. Although the higher contribution limit within the Plan takes effect in the second half of 2025, total contributions for the year cannot exceed the annual maximum. As a result, employees must carefully plan their contributions to remain within the allowed limits.
