RIC 457/401a Resource Bank
June 2024
Iowa Retirement Investors' Club (RIC) news and updates for employers o help you maintain compliance with IRS 457/401a plan regulations. Please take note of the following plan updates and reminders. For additional program information, visit the RIC website.

REMINDER: 2024 Contribution Limits

YearRegularAge 50+ Limit*3-Year Catch-Up**
 The lesser of 100% of compensation or:Regular limit + age 50+*Regular limit + missed contributions up to:
2024$ 23,000$ 30,500$ 46,000

*Participants are not able to use the 50+ limit and the 3-Year Catch-Up limit at the same time.

** Go to 3-Year Catch-Up provision for more information.

The 2024 employer contribution limit is $69,000.

2025 Contribution Increases for Ages 60-63

Secure Act 2.0 added a higher contribution limit for anyone turning ages 60-63 in 2025. If you use an outside payroll provider, the provider should program this for you.  If you manage your own payroll system, you will want to build the higher limit into your system before 1/1/2025. 

The limit for anyone turning ages 60-63 by 12/31/2025 will be $11,250 in addition to the regular limit that will be announced in November.  For instance, if the regular limit for 2025 is $23,500, the 60-63 limit will be $34,750. This limit does not apply to anyone turning 64 or older by 12/31/2025.

Roth Requirement for 2026

As of this writing, the requirement for contributions above the regular limit to be Roth for anyone making more than $145,000 is still set for 2026.  This means that if you have someone who made more than $145,000 in 2025 and is over age 49, any contributions over the 2026 regular limit must be made on a Roth basis.

The wage threshold of $145,000 will likely be increased, but we won’t know that until sometime in 2025.  If you do not offer Roth contributions now, you have until 2026 to do so.  To add the Roth, please email ric@iowa.gov.

Employer's Responsibility 

You must ensure that each participant's payroll deductions do not exceed the maximum limits. Please review all deductions for employees who contribute at high levels to make sure no one goes over the limit. 

Please send termination dates for RIC participants leaving your employment to ric@iowa.gov.

If you have an eligible employee who wishes to use the 3-Year Catch-Up Limit, please contact RIC. 

If you hired any new employees and they contributed to a previous employer’s 457 account in the same year, remind them that they are responsible for ensuring that maximum contribution limits are not breached. You may wish to ask them what they contributed at their previous employer to help them make sure they will not over-contribute.

Please send all RIC Account forms to RIC for our records. Email them to ric@iowa.gov or fax them to 515-281-5102.

RIC wants to hear from you! Please 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.