Setting up Automatic Catch-up Over Age 50 Calculations

You can set a preference to automatically calculate catch-up over age 50 for respective retirement plans. NetSuite automatically calculates catch-up over age 50 for employees who meet the following criteria:

A catch-up over age 50 payroll item is assigned to the employee
The employee is 50 years or older in the current calendar year
The employee reached their annual elective deferral limit

When this preference is set, you can also decrease the elective deferral and catch-up over age 50 limit for specific employees. For more information, see Decreasing Elective Deferral Limits for an Employee.

To set up automatic catch-up over age 50 calculations:

Ensure employees included in payroll have the correct birth date on their records. You can add a birth date to an existing employee by doing the following:
1. Go to Lists > Employees > Employees.
2. Click Edit next to an employee.
3. Click the Human Resources subtab.
4. In the Birth Date field, enter or select the employee’s date of birth.
Go to Setup > Payroll > Setup Tasks > Set Up Payroll.
Click the Preferences subtab.
Check the Decrease Elective Deferral Limits and Automatically Calculate Catch-Up box.

Warning:
Do not set this preference if you use 457(b) plans.
Click Save.

After an eligible employee reaches their annual elective deferral limit, NetSuite automatically calculates catch-up over age 50 using a weighted average.

For example, an employee over 50 years old might contribute $400 to their retirement plan per pay check. They already contributed $19,200 in the current calendar year to their retirement plan. They are also assigned a catch-up over age 50 payroll item. In the next payroll, $300 is automatically deducted for their standard 401(k) plan and $100 is deducted for 401(k) catch-up over age 50.

To set up automatic catch-up over age 50 calculations:

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