IRS contribution limits for 457(b) plans

As you close out 2019, be sure your payroll software has been set with the correct limits for 457(b) plans for 2019 based on age for your employees. Limits are based on employee AND employer contributions. The 2019 limits for 457(b) plans are:

  • $19,000 for participants under 50
  • $25,000 for participants age 50 and older (special catch-up* limit: $38,000)

These limits apply for both the pre-tax and the after-tax 457(b) plans. If participants split their contributions between the pre- and after-tax options, the amounts will be combined and must stay within the applicable annual limit.

2020 457(b) contribution limits

The IRS has published retirement plan contribution limits for 2020. Following are the published limits. This information also is posted for employees participants on our website here.

According to IRS requirements for 2020, “a 457(b) plan’s annual contributions and other additions (excluding earnings) to a participant’s account cannot exceed”:

  • $19,500 for participants under 50
  • $26,000 for participants age 50 and older (special catch-up* limit: $39,000)

* Eligible participants may be able to contribute up to twice the annual limit as special catch-up contributions for three years before the normal retirement age specified in a 457(b) plan. Participants should contact CRA to discuss eligibility if they are interested in special catch-up contributions.

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CRA Coronavirus Update

Following are updates on our operations for the foreseeable future until concerns about the spread of COVID-19 have subsided.

  • Calls/Emails – Our call center will follow standard business hours, and calls into CRA offices will continue to be answered.
  • In-person Meetings – To protect you and our staff, in-person meetings with our client services team will be suspended for the foreseeable future. This also includes in-person visits to our offices in Littleton. However, our staff is available to meet with you via web conference.
  • Group meetings – Our client services team has been contacting member employers to reschedule or postpone group meetings that were scheduled for the coming weeks.

Additionally, we wanted to assure you that CRA, along with our investment advisor and recordkeeper, remain steadfast in closely monitoring the markets and executing our fiduciary responsibilities for your retirement savings.

We recognize that recent market volatility may raise concerns. Drawdowns are part and parcel with financial markets, and the markets have weathered similar storms before. As always, it is important to take a long-term view of retirement savings and have diversified portfolios. CRA target date portfolios are designed to be appropriately diversified for a participant’s anticipated retirement year. Employee participants are always welcome to make changes to their investments by logging into their accounts via cra-online.org or by calling 800.352.0313.

*CRA is not an investment advisor and does not make any representations nor guarantees as to the future performance, risk or return of the funds. This plan and its self-direction provisions are intended to constitute a plan similar to that described in section 404(c) of the Employee Retirement Income Security Act and Title 29 of the Code of Federal Regulations Section 2550.404c-1. The fiduciaries of this plan may be relieved of liability for any losses which are the direct and necessary result of investment information given to the employee.

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