Notice 2022-8 sets forth the first cumulative list for preapproved 403(b) defined contribution retirement plans. The list identifies new or revised 403(b) requirements that IRS will consider when reviewing plan documents for the second remedial amendment cycle (Cycle 2). Preapproved plan providers have a one-year window to submit their documents for review starting May 2, 2022.

Almost a decade’s worth of changes

This is the first cumulative list specifically for preapproved 403(b) plans. For Cycle 1, IRS reviewed plans for compliance with the final 403(b) regulations that took effect in 2009 and any items applicable to 403(b) plans that appeared on the 2012 cumulative list for preapproved qualified plans. The new list covers changes applicable to 403(b) plans since Oct. 1, 2012. Some notable items include:

• Final 2013 regulations published on midyear reductions or suspensions of safe harbor nonelective and matching contributions, as well as 2016 and 2020 notices on other midyear changes to safe harbor plans
• Changes to hardship distribution requirements made by the Bipartisan Budget Act of 2018 and related 2019 final regulations
• Rev. Rul. 2020-23 on distributing custodial assets in kind on plan termination
• Several changes under the Setting Every Community Up for Retirement Enhancement (SECURE) Act (Div. O of Pub. L. No. 116-94):
  • Option to offer qualified distributions after the birth or adoption of a child
  • Increase in the 10% cap for automatic enrollment safe harbor plans
  • Elimination of certain safe harbor notice requirements for plans providing safe harbor nonelective contributions
  • Increase in the required minimum distribution age from 70-1/2 to 72
  • Treatment of difficulty-of-care payments as compensation for determining retirement contribution limitations
  • Permission to let employees of church-controlled tax-exempt organizations participate in “retirement income account” 403(b) plans
• The Supreme Court’s decision in United States v. Windsor, 570 U.S. 744 (2013), which required federal recognition of same-sex marriages
• Various federal statutes granting certain individuals affected by the COVID-19 pandemic and other natural disasters temporary access to their retirement savings

Not all changes covered

When reviewing submissions, IRS won’t consider the following:

• Any guidance or statutes issued after Nov. 1, 2021
• Statutory changes first effective in 2022 or later, unless specifically addressed in the notice
• Any other changes in 403(b) requirements first effective in 2023 or later
• Changes reviewed during Cycle 1, unless IRS didn’t review the plan for that cycle

Timing

Notice 2022-8 doesn’t make any changes to the timing for Cycle 2. The on-cycle submission period begins May 2, 2022, and ends May 1, 2023. After IRS has completed its review of all applications, employers will have approximately two years to adopt a newly approved plan document.

Related resources

Non-Mercer resources

• Notice 2022-8 (IRS, Jan. 28, 2022)
• Rev. Proc. 2021-37 (IRS, Sept. 1, 2021)
• Rev. Rul. 2020-23 (IRS, Nov. 5, 2020)
• Division O of Pub. L. No. 116-94, the SECURE Act (Congress, Dec. 20, 2019)
• Rev. Proc. 2019-39 (IRS, Sept. 30, 2019)
• Rev. Proc. 2013-22 (IRS, March 28, 2013)

Mercer Law & Policy resources

• IRS revamps 403(b) preapproved program, sets Cycle 2 review dates (Dec. 1, 2021)
• IRS releases new guidance for terminating 403(b) plans (Jan. 22, 2021)
• IRS creates program for 403(b) plan document compliance (Oct. 18, 2019)