Financial Advisory Blog

Armanino’s Financial Advisory blog is your source for thought leadership around cloud ERP and accounting solutions and integrations. Supported by the Cloud Accounting Institute and numerous experts in cloud, finance, reporting, integration, compliance, and technology, Armanino’s Financial Advisory blog features must-read content on what’s happening in the finance industry, case studies, white papers, and much more.

November 17, 2020

2020 Year-End Retirement Plan Tasks for Employers

Posted by Lisa Hagen

Check 2020 contributions and 2021 limits, and in CA, know your new CalSavers requirements.

2020 CalSavers

It’s that time of year again — time to look ahead to your year-end retirement plan tasks as well as upcoming changes for retirement plans. 

Plan Contributions

Make sure all 2020 contributions are made by December 31, including employee deferrals, employer match contributions and safe harbor non-elective contributions.

Update your payroll account to make sure the correct contribution limits are reflected. Most retirement plan contribution limits remain unchanged for 2021:

401(k):                      $19,500; $6,500 catch-up* amount if you’re 50 or older

SIMPLE:                  $13,500; $3,000 catch-up* amount if you’re 50 or older

SEP IRA:                  $58,000; the compensation limit for 2021 is $290,000

Solo 401(k):             $58,000; the compensation limit for 2021 is $290,000

IRA:                          $6,000; $1,000 catch-up* amount if you’re 50 or older

*Even if you don’t turn 50 until December 31, you can make the additional catch-up contribution for the year.

CalSavers Retirement Savings Program

California employers also need to be aware of an upcoming change in legislation: the CalSavers Retirement Savings Program.

This new law was enacted to encourage and give employees a way to save for retirement. To achieve this goal, California lawmakers are mandating that employers with five or more employees offer a retirement savings option to their employees, with registration deadlines based on employee headcount.

If you already have an employer-sponsored retirement plan, that’s excellent!  You do not have to enroll in the CalSavers Retirement Savings Program, but you do need to register online and indicate you have a plan. Your business may have already been identified as exempt if you file Form 5500. We recommend confirming your exempt status online to avoid non-compliance status.

If you do not already have a retirement plan in place, this law requires you to either provide an employer-sponsored retirement plan or use the CalSavers plan. Here’s who this affects and when:

  • September 30, 2020 – employers with more than 100 employees
  • June 30, 2021 – employers with more than 50 employees
  • June 30, 2022 – employers with 5 or more employees

Have questions? Armanino’s experts are here to help you interpret these laws, mitigate your risk, and set up and manage the appropriate retirement plan. 

Contact us to learn more: [email protected]

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