IRS Limit Changes Affecting 403(b) and 457(b) Plans
Iowa State University employees have the opportunity to take advantage of additional tax-deferred contributions and/or additional ROTH (post-tax) contributions to a retirement account. The following limits apply to both pre-tax and post-tax contributions and are the same for any of our 3 approved vendors; AIG (Valic), Ameriprise (pre-tax only) and TIAA.
Elective Deferral Limits Increase
The basic limit on elective deferrals increased to $20,500 in 2022, up from $19,500 in 2021.
The total combination of all employer contributions and employee contributions to all 403(b) accounts increased to $61,000 in 2022 from $58,000 in 2021. This does not apply to individuals enrolled in the IPERS program.
Individuals that have been employed by the University for a minimum of 15-years may be eligible for a $3,000/year special “15-year catch-up contribution”. Employees that think they may be eligible to utilize this additional contribution are encouraged to contact FBAC@iastate.edu for a use test and confirmation of eligibility.
Individuals that are age 50 or older as of December 31, 2021 are eligible to contribute an additional $6,500 via elective deferral to a 403(b) or 457(b) plan. This is up from $6,000 in 2019. Contributions made under this provision are not subject to other contribution limits.
Voluntary Retirement deductions will be withheld on every paycheck that an employee receives following their enrollment in the plan. This means if a 9 month Faculty employee paid on an academic cycle receives Summer Salary, the deduction will be taken from the Summer Salary unless the employee takes action to stop the contribution prior to payroll running.
Making changes to your Voluntary Retirement Contributions
Prior to Workday, the Office of Fringe Benefit Accounting and Compliance would increase an employee’s contributions in accordance with the IRS limit increases to ensure employees that had elected a maximum contribution would meet that full amount. This is now a self-service function in Workday. An employee is able to access their monthly contribution amount at any time. A job aid on how to do this can be found here.
Please direct any questions surrounding voluntary retirement contributions or calculating monthly contribution amounts to FBAC@iastate.edu.