Under Notice 2022-33, the Internal Revenue Service (IRS) has extended the deadline for adopting amendments to qualified retirement plans and individual retirement accounts (IRAs) to reflect certain changes made by the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act), the Bipartisan American Miners Act of 2019 (Miners Act), and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Non-governmental qualified retirement plans, 403(b) plans, and IRAs have until December 31, 2025, to adopt plan amendments; previously, these amendments were generally required to be adopted by December 31, 2022 (for calendar year plans). The affected amendments are:
- SECURE Act amendment for required minimum distributions and qualified birth or adoption distributions;
- Miners Act amendment for age 59½ distributions from defined benefit plans and section 457(b) plans; and
- CARES Act amendment for relief from 2020 required minimum distributions.
Governmental qualified retirement plans, public school 403(b) plans, and governmental 457(b) plans now have a deadline of 90 days after the close of the third regular legislative session of the legislative body with the authority to amend the plan that begins after December 31, 2023; previously, these amendments were required by the last day of the plan year beginning on or after January 1, 2024.
The deadline for adopting optional CARES Act relief for expanded distributions and loans does not appear to have been extended and remains December 31, 2022, for calendar year plans.
The notice states that the IRS anticipates that additional guidance will appear in the 2023 Required Amendments List. This will allow plan sponsors to adopt all necessary amendments for these laws on a single date.
With respect to pre-approved plans, according to a footnote in the notice, the IRS anticipates that the cumulative list for the fourth remedial amendment cycle for pre-approved defined contribution plans (pre-approved plans for which the opinion letter application submission window falls between February 1, 2024, and January 31, 2025) will include provisions of the SECURE Act, Miners Act, and CARES Act. Accordingly, it is anticipated that the pre-approved defined contribution plans submitted for that cycle will need to include provisions that reflect provisions of the SECURE Act, Miners Act, and CARES Act.
Plan sponsors can certainly wait to adopt these amendments, and this would also allow further changes addressing subsequent guidance on the SECURE Act (including post-death distribution rules and rules governing the inclusion of long-term, part-time employees) as well as future legislation (such as SECURE 2.0) to be addressed. However, for plan administration purposes, it could be helpful to amend plans before the end of the year and also provide participants with a summary of material modifications describing the changes, but this may require an additional amendment by the extended deadline.
If you have any questions about this, please contact one of the attorneys in the Employee Benefits & Executive Compensation Practice Group at Bradley.