IRS announces contribution and catch-up limits for 2021

Please remind all Plan participants that the IRS has announced the limits on contributions in 2021, allowing them to continue contributing and saving for their future.

Make sure your employees who are close to retiring know that they could save more for retirement by making a catch-up contribution to the CalPERS 457 Plan if they will be age 50 or older in 2021, or if eligible, using the Three-Year Special 457(b) Catch-Up.

To use the Age 50+ Catch-Up, a Participant Change Authorization Form should be completed and submitted to your Benefits Office.

Please work closely with your participating employees who may be eligible for the Three-Year Special 457(b) Catch-Up. If a participant is within three years prior to the year in which that individual will reach the Plan’s definition of normal retirement age, the participant will need to:

• Calculate the available amount under the Three-Year Special 457(b) Catch-Up in 2021 based on the participant’s prior contributions.
  
  
• Complete a Participant Change Authorization Form and Three-Year Special 457(b) Catch-Up Worksheet and return both to you.

You can contact your local CalPERS Account Manager for assistance with the Three-Year Special 457(b) Catch-Up rules and procedures. Your Account Manager can also host a workshop for your agency on this provision. Refer to the Account Manager Flyer for the contact information of your area’s Account Manager or call 888-713-8244 weekdays between 8 a.m. – 5 p.m. PT to discuss scheduling an event for your employees.

Active employees who are not participating in the CalPERS 457 Plan can visit calpers457.com to download and complete the Participant Enrollment Kit. The Kit is also available for you in the Plan Forms section of the Employer Resource Center at calpers-sip.com.

Please encourage your participating and active non-participating employees to regularly review their retirement planning strategy and make voluntary contributions to the CalPERS 457 Plan to help reduce their retirement income gap and stay on track for retirement.

IRS rules provide that both catch-up options cannot be used in the same tax year. Participants who are eligible for both can use the catch-up option that allows them to contribute the greatest amount in that tax year.

Repayment of loans suspended by the CARES Act resumes in 2021

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (CARES) Act was signed into law, allowing more access to retirement savings for those who were impacted by COVID-19.

If your Plan allows for loans, your participating employees with outstanding loans could have elected to delay regularly scheduled payments on their loan(s) between March 27, 2020 and December 31, 2020 (the “suspension period”). Regularly scheduled loan payments for the employees who elected a suspension will resume on the first scheduled repayment due date in 2021. Employees who elected to delay loan repayments during 2020 have been notified this month regarding their resumption as well.

• Each loan continued to accrue interest during the suspension period. The loan will be re-amortized over the remaining term of the loan plus 12 months (the original maturity date is extended by 12 months). The loan amount re-amortized will include the outstanding principal balance plus the interest accrued during the suspension period.

• Regularly scheduled loan payments will resume on the first regularly scheduled due date in 2021 via the same method used prior to the suspension period (e.g. payroll deduction or ACH debit).

If impacted employees have any questions regarding their loan payment resumption, please refer them to the Plan Information Line toll-free 800-260-0659 weekdays from 5:00 a.m. to 6:00 p.m., PT., except on stock market holidays.

Keep us updated about payroll staff and email changes

If your agency has adopted the loan provision, your payroll team works with Voya Institutional Plan Services LLC to administer and process loan payments. Let’s keep working together to help things go smoothly for you.

It is vital to let Voya know if there’s a change on your team. Otherwise, emails that alert your team to download the latest loan feedback reports will not reach the right people.

These reports require immediate action. Even a short delay in processing payroll deductions for loans can trigger problems, from loan repayment delinquency to loan defaults and IRS tax bills for borrowers.

Please report any changes in the names and emails of your team members who handle loans at your agency as soon as possible. Contact CalPERS_Plan_Admin@voya.com.

Schedule a CalPERS 457 Plan presentation
led by your Account Manager!

Your agency’s CalPERS Account Manager* is available for virtual presentations with your employees to educate them about the CalPERS 457 Plan and saving for retirement. Virtual meetings are perfect for all employees, even those who are not enrolled in the CalPERS 457 Plan, and help promote the unique retirement benefit that is available to them through your agency.

Employees can schedule personal one-on-one phone appointments by visiting calpers457.timetap.com to sign up. To discuss hosting an employee webinar presentation led by your Account Manager, please call 888-713-8244 weekdays between 8 a.m. – 5 p.m. PT.

* Information from registered Plan Service Representatives is for educational purposes only and is not legal, tax or investment advice. Local Plan Service Representatives are registered representatives of Voya Financial Advisors, Inc. (member SIPC).

Request a plan review to start the New Year

A review of your agency’s CalPERS 457 Plan is available at your request. Staying informed can help you satisfy your fiduciary responsibility to oversee the CalPERS 457 Plan at your agency. Email Dave Saavedra or call 916-795-3908 to arrange a review in person or as a written document.

Contact Us

CalPERS 457 Plan representatives are available for my|CalPERS and payroll assistance.
Email us or call 800-696-3907, Monday – Friday, 8 a.m. – 5 p.m. (Pacific Time).