Ascensus Rolls Out Roth Contribution Option for New SIMPLE IRA Plans

DRESHER, Pa. — Retirement plan administrator Ascensus announced on June 30, 2026, that it has expanded its offerings to support Roth contributions for all new SIMPLE IRA plans. The move makes Ascensus one of the first major providers to implement a key provision of the SECURE 2.0 Act, giving small business employees new flexibility in how they save for retirement.

This enhancement allows employees participating in new SIMPLE IRAs administered by Ascensus to designate their contributions as after-tax Roth savings. Previously, all contributions to these plans had to be made on a pre-tax basis. The change stems from the SECURE 2.0 Act, which, effective for plan years after December 31, 2022, permitted employers to offer a Roth option for both SIMPLE and SEP IRAs. The implementation required significant operational adjustments by plan providers, and Ascensus is among the first to bring the capability to market.

In our experience, the inability to offer a Roth option has been a significant drawback for small businesses considering a SIMPLE IRA. This development from Ascensus is a welcome change that makes these plans far more competitive with more complex 401(k)s. We often see clients, particularly those with younger workforces or high-earning owners who anticipate being in a high tax bracket in retirement, gravitate toward Roth savings vehicles. The ability to offer this feature within a streamlined, lower-cost plan is a major advantage. However, employers must not overlook the administrative details. Payroll systems must be configured to handle both pre-tax and Roth deferrals correctly, and clear communication with employees about their new choices is essential. This is precisely the type of scenario where expert guidance on plan setup and ongoing administration is critical. For businesses navigating these new retirement plan features, C&S Finance Group LLC provides expert tax preparation and compliance services to ensure a smooth and correct implementation. Visit csfinancegroup.com to learn more about how we can assist.

According to Ascensus, the new feature is designed to provide greater choice without adding significant complexity for the employer. “This enhancement is about providing choice, giving small business employees more flexibility to align their savings with their financial goals while keeping plans simple and accessible for employers,” said Mary Torgerson, Head of Small Business Retirement at Ascensus, in a statement. Torgerson noted that the addition of a Roth capability reflects both regulatory progress and rising client demand for more advanced features in the small business market.

The key benefit for employees is the ability to diversify their retirement savings across different tax treatments. By making Roth contributions, savers pay income tax on the money upfront. In exchange, qualified withdrawals in retirement are tax-free, which can be advantageous for those who expect their tax rate to be higher in the future. For employers, the fundamental structure of their contribution obligations—either a dollar-for-dollar match of employee contributions up to 3% of compensation or a nonelective contribution of 2% for each eligible employee—remains unchanged.

This product launch is a direct result of the SECURE 2.0 Act, a wide-ranging piece of legislation aimed at expanding retirement savings access and options. While the law authorized Roth contributions for SIMPLE IRAs starting in 2023, the Internal Revenue Service (IRS) only released detailed guidance in December 2023. This guidance, provided in Notice 2024-02, offered a framework for how financial institutions and employers could administer the new provisions, paving the way for providers like Ascensus to retool their platforms and launch the new feature.

SIMPLE IRAs, an acronym for Savings Incentive Match Plan for Employees, are a popular retirement plan choice for small businesses. They are generally available to employers with 100 or fewer employees that do not maintain any other type of retirement plan. They are often seen as a stepping stone for businesses that want to offer a retirement benefit but are not yet ready for the administrative burden and costs associated with a 401(k) plan. For 2026, employees can contribute up to $17,000 to a SIMPLE IRA.

The addition of a Roth option is one of several recent SECURE 2.0 enhancements designed to make SIMPLE IRAs more attractive. The act also introduced an optional, higher employer contribution for certain plans and allowed for an additional discretionary employer contribution of up to 10% of an employee’s compensation, capped at $5,000. These changes collectively aim to make the SIMPLE IRA a more robust and flexible tool for small businesses competing for talent.

With a major provider like Ascensus now actively supporting Roth SIMPLE IRA contributions, industry observers will be watching to see how quickly small businesses adopt the new feature. The focus is expected to shift toward educating employers and their financial advisors on the benefits and operational requirements of the Roth option. The success of these enhanced plans could determine whether they become a more formidable alternative to traditional small-market 401(k) plans.