The Internal Revenue Service (IRS) released Notice 2022-33, giving retirement plan sponsors a three-year extension to adopt formal plan amendments under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act), and the Bipartisan American Miners Act of 2019 (BAMA – decreasing the in-service distribution age to 59 1/2 in pension plans). The new deadline, December 31, 2025, applies to mandatory and optional plan amendments under these acts.
Previously, the CARES, SECURE, and BAMA Acts required all qualified plans including 401(k), 403(b), and governmental 457 plan sponsors to adopt mandatory and any discretionary amendments by the last day of the plan year beginning on or after January 1, 2022. For most calendar year plans, this previous deadline would have been December 31, 2022. The extension in Notice 2022-33 gives plan sponsors until December 31, 2025, to retroactively include changes to the plans made under the three Acts.
The amendment extension for CARES only applies to the required minimum distribution relief for 2020. The extension does not apply to COVID-related distributions and loans as permitted under the CARES Act. If a plan sponsor previously included these provisions in their retirement plans, then the corresponding plan amendments are still due no later than December 31, 2022, for calendar year plans.
It’s important to note that plan sponsors must still operationally comply with the mandatory provisions of the acts, even if they postpone formally amending their plans due to the deadline extension.
Further guidance and sample language are expected from the IRS on portions of the acts dealing with items such as minimum distribution requirements and the inclusion of certain part-time employees in 401(k)/403(b) plans. The anticipated guidance will help with administration of the provisions, and the sample language will help plan sponsors and third-party administrators draft the applicable plan amendments.
The plan amendment deadline for individually designed plans will be two years after the IRS adds the acts to its Required Amendments List. If added in 2023, the amendments will be due in 2025.
The plan amendment deadline for qualified governmental plans and 403(b) plans maintained by a public school is 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.
The deadline to amend a governmental plan under section 457(b) of the Code is the later 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, or;
- if applicable, the first day of the first plan year beginning more than 180 days after the date of notification by the IRS that the plan was administered in a manner that is inconsistent with the requirements of the law.
Terminating plans should amend for these Acts before the plan is terminated.
For more information, contact your TRI-AD Client Service Manager.
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