Setting Up Automatic Catch-Up Over Age 50 Calculations

You can set a preference to automatically calculate catch-up contributions for employees over the age of 50 in retirement plans. NetSuite automatically calculates the catch-up contributions for employees over the age of 50 if they meet the following criteria:

When you set this preference, you can also decrease the elective deferral and catch-up limits for certain employees. For more information, see Decreasing Elective Deferral Limits for an Employee.

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

  1. Make sure employees in payroll have the correct birth date on their records. To add a birth date for an existing employee:

    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.

    5. Click Save.

  2. Assign a catch-up over age 50 payroll item to the employee's record. For the steps, see Setting up Deductions for an Employee.

    If you need to update employee records in bulk, see Updating Payroll Items for Multiple Employees.

  3. Next, go to Setup > Payroll > Setup Tasks > Set Up Payroll.

  4. Click the Preferences subtab.

  5. Check the Decrease Elective Deferral Limits and Automatically Calculate Catch-Up box.

  6. Click Save.

Important Things to Note

  • To support automation, make sure both standard (catch-up over age 50) and higher catch-up contributions are assigned to the employee's record.

  • The automatic catch-up calculation feature doesn't apply to Govt. EE 457(b) - Catch-up, Additional - 3 Years to Retirement payroll item. If you assign this payroll item to an employee, the system calculates the catch-up contribution even if the employee has not yet reached the annual deferral limit. Check with your plan sponsor for more details on this requirement.

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 paycheck. They've already contributed $19,200 to their retirement plan this year. They're 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.

Related Topics

General Notices