457/401a Resource Bank for Employers

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RIC Public Sector Employers

The Resource Bank is to help you maintain compliance with IRS 457/401a plan regulations. Please take note of the following plan updates and reminders. For more program information, visit the RIC website for PSE.

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October 2025 Edition

2026 Roth Change 1/1/2026

In previous editions of the Resource Bank, we explained the upcoming federal changes to Roth accounts. This new federal law is set to begin on January 1, 2026, and applies to anyone turning age 50 or older in 2026, and whose 2025 FICA wages exceed $145,000. Any person in this group may contribute on a pretax basis up to the regular limit. Any contributions over the regular limit must be made on a Roth basis.

Your Takeaways

  • Add Roth deductions as an option in your payroll system as of 1/1/2026.
  • Test your payroll system, ensuring your software is built to automatically change the election.
  • If your payroll system will not make this change, monitor contributions for anyone who meets the Roth requirement.
  • Once the maximum is reached, change the election to Roth.
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2026 IRS Limits

The IRS has not published the 2026 limits yet. We will send you this information as soon as it is available.

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RIC Participants Who Leave Employment

Please email ric@iowa.gov if an employee who has contributed to RIC leaves employment. We need to update our system and give this information to the person’s investment provider. Providers won’t allow participants to access their funds if the term date is not on file. 

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Financial Education

RIC providers and investment consultants periodically host webcasts that may interest your staff. Please share a link to our Financial Webinar Calendar with them, and consider adding it to your employee benefits or wellness page.

Questions?

RIC wants to hear from you! Please email the RIC Team to submit your questions. We will respond to you directly and if the subject of discussion is beneficial for all employers, we will share the answers in our next RIC Resource Bank.

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Resource Bank Publications

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