457/401a Resources Bank for Employers

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

IRS Changes for 457 Plans

Delay to New IRS Requirement:

• In the July 2023 Resource Bank, we announced a new IRS requirement that was to begin in January 2024.  The IRS has recently announced a 2-year delay in implementing that change.
• Beginning in 2026, employers must process 457 Age 50+ Catch-up contributions as Roth for participants earning over $145,000 in the tax year. If you do not offer the 457 Roth option and have questions about adding it, contact RIC.

Employer Responsibility

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

• Employer Contributions - Please note that the limit for employer contributions into the 401a plan has increased to $66,000 for 2023.
• 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.

Additional Program Updates (2023)

• AIG Is Now Corebridge Financial: (If you do not offer AIG as a provider, please disregard). Participants recently received information from Corebridge Financial on the name change and no action is required. This is just a name change – nothing else is changing. You do not need to make any changes to your remittance process.
• Transfers Between RIC Providers Form: With the revised RIC Account Form you will notice that provider transfers now require a transfers between RIC providers form.
• Minimums No Longer Required - RIC no longer requires a minimum contribution amount to participate. We are changing this on your RIC custom webpage. We will send you an awareness email to forward to your employees highlighting this enhancement to your RIC benefit. If you wish to keep this restriction for your plan, please email RIC.

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.