Armanino Blog
Article

2020 Year-End Retirement Plan Tasks for Employers

by Lisa Hagen
November 17, 2020

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

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, butyou 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.

Stay In Touch

Sign up to stay up-to-date with the latest accounting regulations, best practices, industry news and technology insights to run your business.

Authors
Lisa Hagen - Headshot
Senior Manager
Resources
Related News & Insights
Women in Nonprofit Leadership Panel
Webinar
Aspiring nonprofit leaders should hear the insightful stories of these women industry leaders to empower their journeys.

December 14, 2021 | 10:00 AM - 11:00 AM PT
The Evolution of Gaming Companies
Webinar
From seed-funding to acquisition, position your gaming company for success.

December 9, 2021 | 01:00 PM - 02:00 PM PT
Environmental, Social and Governance (ESG) and Risk Management
Webinar
How to integrate ESG into your risk management practices and processes.

December 9, 2021 | 10:00 AM - 11:00 AM PT