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The December sprint to the end of the year is often a particularly busy time, especially if you’re a plan sponsor administering its plan on a January plan year. There are a number of plan administration obligations to both employees and the government that need to be carried out to close the books on the 2021 plan year and to help prepare for the new year. Below you’ll find some helpful reminders for the last few weeks of the plan year to ensure your plan administration stays organized and on track.

1. Employer Match Program To-Dos
If you offer your employees a matching contribution in your retirement plan, there are a few additional steps you may need to take at the end of the year to meet this obligation, depending on what type of retirement plan you have.

True-up contributions: If you provide a per-paycheck retirement contribution match for employees with contributions calculated on an annualized basis, then it’s important to remember that, at year-end, you may need to recalculate the match for which you are responsible. Any additional contribution needed to “true-up” the employee to ensure you’re meeting your full employer match obligation should be made before your company’s tax filing deadline.

Additional employer contributions: If you offer an annual (rather than per-paycheck) retirement contribution match for your employees, now is the time to start determining the total amount the company will owe each participating employee. Remember, you’ll need to remit payment for retirement contribution matches no later than your company’s tax filing deadline.

2. Plan Participant Contribution Limits
As the end of the year approaches, many of your employees are likely to approach the 2021 contribution maximum. If an employee received a salary increase, or if your company offers an auto-escalation feature to eligible employees, it’s a good time to prompt them to revisit their 2022 per-paycheck contribution with the year’s new contribution limits in mind. 

2021 limits: In 2021, the maximum retirement contribution employees are allowed to make to their employer-sponsored plan is $19,500, with the ability of employees 50 years old or older to make an additional catch-up contribution of up to $6,500.

New limits for 2022: In 2022, the maximum retirement contribution employees will be allowed to make to their employer-sponsored plan increases to $20,500, with the ability of employees 50 years old or older to make an additional catch-up contribution of up to $6,500. Don’t forget to update your retirement materials to include these new 2022 contribution limits.

3. 403(b) Universal Availability Reminders
Don’t forget that if you offer employees a 403(b) retirement account, the IRS requires you to provide an annual notice to both current plan participants and eligible nonparticipating employees of two things: 1) their right to contribute to a 403(b), and 2) their ability to make changes to their contribution limits.

You can reach out to your local Mutual of America representative for more information. 

If you have questions about any of these requirements, get in touch with your local Mutual of America representative.

The new year is approaching soon. If you sponsor a calendar-year plan, here are some key dates during the first four months of 2022 to keep in mind.

March 15: Deadline for processing corrective distributions without imposition of a 10% excise tax to remedy a failed actual deferral percentage (ADP) / actual contribution percentage (ACP) test of the prior year.

For plans with an Eligible Automatic Contribution Arrangement (EACAs), the deadline for correcting a failed ADP/ACP test is June 30.

April 1: Deadline for participants to take the first required minimum distribution (RMD) under Section 401(a)(9) of the Internal Revenue Code. This is the required beginning date for all retired participants who turned age 72 in the prior calendar year as well as those who turned age 72 in the prior year and are a 5% owner of the employer.

April 15: Deadline for processing corrective distributions to participants whose contributions in the prior calendar year exceeded the applicable limit under Section 402(g) of the Internal Revenue Code.

For 401(k) plans, April 15 is also the deadline for deductible contributions for unincorporated entities (without extension) and the deadline for requesting an automatic extension to October 15 for individual and partnership tax returns.

When the due date for filing an IRS or Department of Labor (DOL) form falls on a Saturday, Sunday or legal holiday, the deadline is generally extended to the next business day.

The dates in the above examples are based on a January plan year. If you operate your plan using a different plan year, the same rules apply, but the deadline dates vary based on the start of your plan year.

For additional details and for important dates occurring during the last eight months of the year, check out our 401(k) and 403(b) Plan Administrator’s Guides, Compliance Calendars and Checklists on Mutual of America SponsorConnect®, or contact your local Mutual of America representative.