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Handbook

DRS Notice 25-018, Employer contributions for DCP

Posted on August 14, 2025

Applies to: DCP Employers
Subject: DRS Notice 25-018, Employer contributions for DCP

What’s changing?

Beginning Jan. 1, 2026, employer contributions to Washington’s Deferred Compensation Program (DCP) must be made before the employee reaches the normal IRS limit, which is $23,500 in 2025 and may change in 2026. This is an IRS requirement.

If an employer wants to contribute to an employee’s DCP, they should plan for the first few months of the calendar year, before the employee has reached the normal IRS limit for contributions to DCP. The employer can’t make catch-up contributions for those age 50 and older.

Contributions made in 2025 are not affected. This graphic explains the breakdown and will be updated later with the 2026 contribution limits.

Note: this may impact the timing of your payments. Work with your labor relations department to determine if any contracts are impacted. DRS cannot offer direct guidance on employee contracts.

A bar chart with pretax or Roth contributions made from January to December by the employer or employee. Once the normal IRS limit is reached, any catch-up contributions must be made by the employee.

If you have any questions regarding this notice, contact Employer Support Services at 360-664-7200, option 2, or 800-547-6657, option 6 and then 2.

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