457/401a Resource Bank for Employers

To help you maintain compliance with IRS 457/401a plan regulations, please take note of the following plan updates and reminders. 

457 Contributions

You must ensure that each participant's payroll deductions do not exceed the maximum limits.

• Please review all 2024 deductions for employees who contribute at high levels to make sure no one went over the limit. If anyone did, please contact RIC right away so we can have excess contributions removed from the plan. This needs to be done asap. (See the RIC website for more information)
• Beginning in 2026, employers must process 457 Age 50+ Catch-up contributions as Roth for participants earning over $145,000 in the tax year. 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. If you do not offer the 457 Roth option and have questions about adding it, contact RIC.

Employer Responsibility

• Remitter File Revisions - For those of you who use Voya’s Common Remitter service to send contributions, Voya will be adding new optional fields to the contribution remitter file. Although optional, we encourage you to add them to your contribution remittance file. These fields will allow providers to open default accounts if they receive contributions for anyone who hasn’t opened an account yet.  The fields will also ensure that providers have a participant’s current address. Once you have a test file ready, please email common.remitter@voya.com and they will send you a secure email you can use to submit a test. 
• New Hires - If you hire 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. 

Employee Life Events

RIC providers maintain beneficiary elections. If you have an employee who has a life change (marriage, divorce, death of spouse, birth of child, etc.), remind the employee to review their beneficiary designations and update as needed.

The Employer Event/Action Requirements is a helpful chart to know what to do when you have a new hire, someone leaves employment or someone changes payroll deductions.

Employee changes of address can be sent to the RIC Team. We will update our records and notify the provider.

Ongoing Activities

Please remember to perform the following activities:

• Send all RIC Account Forms to RIC at 515-281-5102 (fax) or ric@iowa.gov.
• If a RIC participant leaves employment, email the term date to ric@iowa.gov.
• Notify the RIC Team of name or address changes for RIC participants.
• Give the RIC At-A-Glance (found on your RIC page) to all new hires for their review.

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.

To request earlier published 457/401 Resource Bank issues, please email RIC.