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ReadyPay Retirement – 2026

This document provides step-by-step instructions for employers using ReadyPay to set up and maintain employee retirement plans, and to remain in compliance with SECURE 2.0 and applicable state auto-enrollment requirements.

This guide is intended for service bureau users responsible for retirement plan setup.

Overview of Retirement in ReadyPay​

The Retirement feature allows employers to:

  • Configure multiple retirement plans (e.g., 401(k), 403(b), SIMPLE IRA).
  • Assign employees to plans using eligibility and auto-enrollment rules.
  • Calculate employee contributions and employer matches accurately by plan.
  • Track catch-up contributions, Roth catch-up rules, and SECURE 2.0 requirements.
  • Maintain accurate historical data and reporting for plan administrators.

Setting Up Retirement Plans (Company Setup)​

Go to: Company Setup → Retirement (formerly "401k").

Create / Manage Retirement Plans​

  1. Select Plans from the drop-down menu.
  2. Click Add (*) to create a new retirement plan or select an existing plan to edit.
  3. For each plan, complete the following fields:

Plan Details​

  • Plan ID / Description — Internal identifier and description.
  • Plan Type — Select one of the supported plan types: 401(a), 401(k), 403(b), 408(k), 457(b), SIMPLE, IRA.
  • Effective Date — Date the plan becomes active.
  • Active? — Check to make the plan available for employee selection.

Contribution Codes​

  • Employee Contribution Code — Deduction code for employee deferrals.
  • Employer Contribution Code — Earning code for employer matching contribution.
  • Roth Employee Contribution Code (if applicable) — Used when catch-up amounts must be treated as Roth contributions.

Catch-Up Contributions (if Plan allows)​

  • Enabled: Employees may contribute up to the standard limit plus the catch-up limit.
  • Not enabled: Employee contributions are capped at the standard plan limit.

If catch-up is enabled, ReadyPay automatically applies limits without requiring annual YTD max updates on deduction codes.

Match Eligibility Rule​

  • Select a Match Eligibility Rule (to be run outside of payroll, pre-process). This rule sets the employee's Match Eligibility Date, which controls when employer match begins.
  • Enable Allow Match on Catch-up to continue calculating the employer contribution on catch-up contributions made by the employee.

Eligibility and Automatic Enrollment​

  • Select an Eligibility Rule (renamed from the legacy "401k" option). The rule determines when an employee becomes eligible for the plan.

If your plan or state legislation requires auto-enrollment:

  • Enable Automatic Enrollment.
  • Enter the Default EE Deferral.
  • Enter the Default EE Deferral Calc (Calc Code).

When an employee becomes eligible, ReadyPay will automatically enroll them in the plan at the defaults set above.

Configure Employer Matching​

  1. Select a retirement plan.
  2. Open the Match Setup sub-menu.
  3. Use the guided Matching Wizard (same experience as legacy matching).
  4. Define match rules according to your plan document (e.g., percentage match, tiered match).

ReadyPay ensures:

  • Match calculations are plan-specific.
  • The correct match applies based on the employee's assigned plan and Eligibility.
  • Contribution codes from the plan setup automatically populate the match wizard.

For more details, see Company Setup: Retirement.

Managing Employee Retirement Plans​

Go to: Employee → Retirement (formerly "401k").

Assign Plans to Employees​

  1. Select an employee.
  2. Open the Retirement tab.
  3. From the Plans drop-down (formerly "Status"), use the Add (*) button to add a retirement plan to the employee.
  4. Enter:
    • EE Deferral Amount and EE Deferral Calc to set their contribution to be processed with payroll.
    • Effective Date of the plan to begin payroll deductions.

Employees may have multiple plans over time, depending on employer changes. Employees who have plans added through Eligibility Rules will have the Eligibility Date and, if applicable, the Match Eligibility Date filled by the system.

Required Roth Catch-Up Contributions​

For employees who earned more than $150,000 in prior-year Box 5 wages:

  1. Enable/override Box 5 income exceeds $150k in prior year on the employee's Retirement Plan record. Box will be marked automatically when final payroll is run for a year, for the succeeding year contributions (beginning in December 2026). For employers recently added to ReadyPay who do not have history loaded for previous year(s), the setting may be enabled manually, or you may manually run the UpdatePriorYearBox5ExceedsMax job from the Job Queue to update records for all employees for the year specified.

    warning

    This job will override any manually set values.

  2. Once the employee exceeds the standard contribution limit, catch-up contributions automatically flow to the Roth Employee Contribution Code defined on the plan.

Viewing Expected Retirement Deductions​

Retirement contributions appear as an informational record on the employees' Deductions page. This mirrors how insurance deductions are displayed and allows administrators to preview expected deductions and validate payroll accuracy before processing.

For more details, see Employee Maintenance: Retirement.

Tips and Best Practices​

  • Always verify plan setup against official plan documents.
  • Review eligibility and auto-enrollment settings before payroll runs.
  • Confirm catch-up and Roth codes annually as limits and regulations change.

Handling Existing Data When Implementing Plans​

  • Any pre-existing employee retirement deductions will need to be end-dated prior to establishing the setup detailed in this document.
  • The old 401(k) Employer Match setup will stop functioning as it currently does once a company adds its first Company Retirement Plan, as detailed in this document.
warning

If you choose to use the same deduction and earning codes, you may choose to only implement the new retirement plans feature by establishing new deduction and earning codes for use with the new match wizard setup.