Govt. EE 457(b) Catch-up in NetSuite 2025.1

What's New in NetSuite 2025.1

Starting in NetSuite 2025.1, enhancements have been made to the employee payroll management system, specifically focusing on the automatic catch-up contribution calculations for Govt. EE 457(b) plans. This update ensures proper compliance with federal regulations while streamlining the payroll process for administrators.

Automatic Catch-Up Contributions

The automatic catch-up calculation feature does not apply to the following payroll items:

• Govt. EE 457(b) - Catch-up, Additional - 3 Years to Retirement-ROTH
• Govt. EE 457(b) - Catch-up, Additional - 3 Years to Retirement

This means that the system will calculate the catch-up contributions for these items even if an employee hasn't reached the annual deferral limit. This is important for administrators to note as it simplifies the payroll process without needing constant oversight for these specific items. Make sure to consult your plan sponsor for further details regarding the implementation of these requirements.

Enhancements for 401(k) Retirement Plans

In addition to the catch-up provisions for the 457(b) plans, NetSuite 2025.1 introduces more straightforward methods for administering catch-up contributions for those aged 60 to 63. Previously, users were required to create a payroll item group and derive contributions accordingly, which could be slightly cumbersome.

Now, users can include the following payroll item pay codes directly when managing contributions from a 401(k)-type retirement plan:

• 401(k) Catch-Up 60 – 63
• 401(k) Roth Catch-Up 60 – 63

This enhancement reduces the overhead of additional configurations and assists payroll administrators in effectively managing employee retirement plans, all while ensuring compliance with applicable regulations.

Who This Affects

This update primarily affects the following roles and modules:

• Payroll Administrators: Improved management of retirement contributions.
• HR Professionals: Streamlined processes for employee retirement plans.
• Finance Teams: Enhanced compliance with payroll regulations.

Key Takeaways

• The automatic catch-up feature for specific 457(b) plans now calculates contributions regardless of annual limit status.
• New payroll item codes for 401(k) plans simplify contributions for ages 60-63.
• Enhancements aim to support compliance and efficiency in payroll processing.
• Consult your plan sponsors for specific contribution requirements.

For more information, refer to the help topic on Setting Up Automatic Catch-Up Age 60 – 63 Calculations and Deriving a Payroll Item from a Retirement Plan.