BSI tracking 16,500 contrib toward 401(k)

Since the limit is set by IRS and could change any year, I would think BSI controls that.
In PR05, there is a tax status 01 = 401K. I assume that tells the Lawson logic to pass on the parameters to BSI and let it do the calculations.

True. It is the tax status in PR05 that tells BSI which ones to accumulate. If your company offers Roth 401K then that must be assigned to Tax Status 16. To set up catch up limits you need to set up BSI group and overrides for them within BSI.

So.... What if I do NOT want catch-up 401k tracked toward the limit. Can I set up something so that catch-up will not count toward limits but still tax correctly and show on W-2 correctly?

Shane - can you explain a little more what you'd like to try to accomplish? I'm not sure there's any way to NOT have catch up be tracked toward the 401K limit but still be taxed correctly and show on the W2. Without a BSI code increasing the annual contribution to 22k, your employee deductions will simply stop at the 16500 total withheld in all plans if you're using the tax status of 01 (401k).

Stephanie (and any others)

We match regular 401(k) and do NOT match catchup. This means we have two BN15 plans. When someone enrolls in the catchup they get an override in BSI to allow 22,000 instead of 16,500..... HOWEVER, the system now allows an employee to have regular 401(k) contributions go over the 16,500. We still need TWO buckets - 16,500 for regular 401(k) and 5500 for catchup... The system combines them and does not care where the contribution comes from (regular or catchup 401(k)).

Our work around has been to track the limits and enter a limit MANUALLY on PR14. This would be fine except that we allow changes to 401(k) ANYTIME during the year. This means that we are ALWAYS watching the changes made by associates so that we can enter a new descending balance on PR14.

I keep thinking that if I could just leave BSI at 16,500 then I would just be tracking a limit for the CATCHUP deduction instead of watching both buckets.

If you don't mind tracking the balance on the catch-up plan, you may be able to look at PR20.5 to handle the taxable wages and then at the end of the year look at PR27 to see how to get it on the W-2. I think in the "old days" we had to then move the catch-up amount to a dc deduction to have it appear on the w-2.

Shane,
It sounds like our plans are similar to yours. We have our 401k plan separate from our Catch Up and we ran into a similar issue with some maxing out one plan before the other but since the BSI override allowed a combined 22000, the plan would not stop at the correct limit. For all employees who have 401k and Catch Up, we enter a Balance Type of Limit (L) and enter the Balance Amount of 5500 for Catch Up and 16500 for 401k on PR14. This way we do not have to monitor descending balances whenever they change their elections. Lawson will stop their deductions when they reach the limits. So now we only have to monitor employees who enroll in both plans so we make sure to set the limits.

We process the same way as Laura S. I think the main issue is that the IRS doesn't require any separation of the plan deductions, so technically, employees need only be enrolled in one plan, with either the 16500 or 22000 limit. Unfortunately, the "real" world isn't that simple. Our administrator requires us to have separate plan enrollments, and we are as you are, Shane - we match regular contributions but not catch up. No good solutions unless you modify the deductions - and that's always my last resort.

Sounds like everyone is doing what we are doing - I just think it is strange that I can't have the system monitor the limit on its own... We have to enter a PR14 change anytime an associate changes their elections.

Can't a deduction PR05 be setup as a limit with the amount $5500 and then have it tied to the benefit plan? Seems so simple to me and I just can't find a way to make it work. Even some BN15 plan set up options allow for an annual limit. Has everyone thrown in the towel on this one to just manually change PR14.

Maybe I will build a process flow to look for the balance and change it when needed. I just don't want another process to manage if there is a setting that could do it on its own.

we setup the catchup as a separate plan in bn32, employees assign to a bsi group code in hr11, and tie that to payment overrides (we setup the limits) in bsi to allow limits for catchup. that way bsi handles all of the retirement limits including catchups.

I agree, Shane - it would be a useful enhancement to have the ability to have a "global" decending or limit balance!

I am hoping to get a little more information on how others are making this work:

Carolyn: Do you have screenshots you could share because I dont think anyone else has been able to configure their systems to do this on its own. Once we setup two different BN15 plans that will be used for 401(k) and Catchup separately, we need to modify the PR14 to ensure that the limits of each is stopped appropriately. I am not a BSI expert by any means so if there is something we can do to setup an annual limit for a deduction code in BSI I would love to know how to configure it.

LauraS: We are using descending balance type "D". I was researching the limit type of "L" and it was explained to me that the "L" type only connects to that specific PR14 record. I was told that it does not aggregate all deductions for that code so once the employee changes the election the new PR14 record would need to have a different limit for that record. Are you just dumping in an "L" and a $5500 balance each time the record is changed for the year?

Thanks
Shane

We use an "L" with a $5500 balance for each record. I was not aware that the limit type "L" is only connected to each specific PR14 record. When we encountered this problem, I did ask both BSI and Lawson how to handle this situation, and this was the solution that was given.

We are a small company so the number of employees with both 401k and catchup is very small so it is much easier for us to monitor. We monitor it through custom reports which do aggregate all deductions for both plans. The limits are set within the report so it highlights any employees who are getting close to reaching their limits and we can verify in Lawson when their deductions should have stopped.

for simplicity here is the basic sample setup for 22k limit:
BN32- assign 403 plan, flow to PR14, no limits
HR11 -> tax tab-> bsi group code -> assign something, like 'c1'
BSI-> modelling->employee group-> create 'c1'
BSI-> modelling-> payment override-> click on 'c1'
authority- federal
tax type- withholding tax
earning/plan- 403b
start date- start of calendar date
end date- end of calendar date
agg status "use authority default agg rule"
check "use employe max"
taxability- limit-ytd
ee max- 2200

Carolyn: How do you stop the regular at 16,500 and the catchup at 5500. We have a similar setup but we still need to have each bucket stop at 16500 or 5500...

We are looking at ROTH and will likely allow associates to be signed up for ALL THREE. This will be a nightmare because we will need to track each bucket's limits which could be moving limits because of ROTH and REG contribnutions. (I want to talk Benefits into having associates select ONE OR THE OTHER for the year because then I will still be tracking just two buckets.... My problem exists because of the 22,000 for catchup eligible because the system just assumes that ANY 401k should allow 22,000 but for us it STILL needs to limit each of the plans.

we let bsi setup handle the irs limits. most of our employees are on one plan; some on 2 for 457b. company match limit is set on bn19.3, which auto flows the descending balance to pr14. plans end and start the new year. the bsi override limits work fine including those with 2 plans, when using the aggregate rule. we don't manually set any retirement limits on pr14. but who knows, your company match policy may be far different from ours and require more creativity with bn/pr/bsi.