IRS changes more preapproved plan amendment timing rules 

For the third time in recent years, IRS has made changes to the amendment timing rules for preapproved plans. The new rules — announced in Rev. Proc. 2023-37 — took effect on Nov. 21, 2023. The 2023 revenue procedure also updates and consolidates the preapproved plan document programs for qualified and 403(b) retirement plans, effective for Cycle 4 qualified and Cycle 3 403(b) plans. (Cycle 4 for qualified preapproved plans began Feb. 1, 2024. Cycle 3 for 403(b) preapproved plans has yet to be announced.)

Interim amendment deadline. The deadline to adopt interim amendments to preapproved plans for changes in law or guidance is now tied to IRS’s Required Amendments List (RAL). Like required amendments to individually designed plans, interim amendments are now due by Dec. 31 of the second calendar year after the year the change in law or guidance appears on the RAL (unless a statute, regulation, or other guidance sets a different deadline). This change applies to both qualified and 403(b) preapproved plans. Before this change, the deadline for these plans was Dec. 31 of the second calendar year after the year change took effect for a plan.

Employers using preapproved plans should confirm whether their document providers will adopt interim amendments. Otherwise, the employer will be responsible for doing so. Under the new rules, if interim amendments aren’t timely adopted and the employer doesn’t correct the failure within two years after the deadline, the plan will become an individually designed plan (and the employer will lose reliance on the provider’s opinion letter).

Amendment deadlines for government employers. Under the new revenue procedure, the deadline for governmental employers to adopt a plan amendment is the later of:

• The deadline that applies to nongovernmental employers for the particular type of amendment (e.g., discretionary or interim)
• If legislative action is necessary to adopt an amendment, a date based on the employer’s legislative calendar

For discretionary amendments, the alternative deadline is 90 days after the close of the employer’s second regular legislative session that begins on or after the date the amendment becomes effective. For interim amendments, the deadline is 90 days after the close of the third such legislative session.

These deadlines, which apply for amendments to both qualified and 403(b) preapproved plans, differ from the old rules slightly. Prior revenue procedures gave governmental employers additional time to amend based on their legislative calendars, regardless of whether legislative action was necessary to adopt amendments.

• Rev. Proc. 2023-37 (IRS, Nov. 21, 2023)
• Preapproved retirement plans (IRS, updated regularly)

• IRS revamps 403(b) preapproved program, sets Cycle 2 review dates (Dec. 1, 2021)
• IRS again tweaks preapproved plan amendment timing rules (Sept. 20, 2021)
• IRS tweaks amendment timing rule for preapproved plans (Sept. 24, 2020)
• IRS creates program for 403(b) document compliance (Oct. 18. 2019)