The IRS’s 2020 Required Amendments (RA) List (Notice 2020-83) identifies just two statutory changes that may require amendments to some qualified and 403(b) retirement plans by Dec. 31, 2022. Both changes appear in Part B of the RA List, which means IRS expects few sponsors will need to amend their plans for the changes. Part A of the RA List — for changes that IRS believes would require an amendment to most plans affected by the change — is empty this year.
Under the Setting Every Community Up for Retirement Enhancement (SECURE) Act (Division O of Pub. L. No. 116-94), “difficulty of care payments” to a foster care provider are now included in a defined contribution plan participant’s Section 415 compensation. Employers that provided the payments in a plan year beginning in 2016–2020 must amend their plans to reflect this SECURE Act change.
Inclusion of a change on the 2020 RA List typically would mean the amendment is due by Dec. 31, 2022. For this change, however, that deadline applies only to employers with calendar-year plans, since the SECURE Act lets employers amend their plans as late as the end of the plan year that begins in 2022 (or later for governmental and certain collectively bargained plans). An employer that starts paying difficulty-of-care payments after 2021 will need to amend its plan by the end of the second calendar year after the year in which the first payments begin.
Special funding rules apply to defined benefit plans sponsored by certain cooperative and small-employer charities (CSECs). The Coronavirus Aid, Relief and Economic Security (CARES) Act (Pub. L. No. 116-136) extends these special rules to some plans providing services to mothers and children if those plans meet other conditions. CSEC plans are not permitted to apply the funding-based benefit restrictions under Internal Revenue Code (IRC) Section 436. Sponsors of plans that gained CSEC status under the CARES Act must amend their plans by Dec. 31, 2022, to remove provisions on Section 436 benefit restrictions.
Each RA List automatically includes certain periodic updates, such as changes in cost-of-living adjustments, spot segment rates used to determine the 417(e)(3) applicable interest rate, and 417(e)(3) applicable mortality tables for the year in which the changes are effective. IRS anticipates that few plans will need amendments for these updates, which are typically incorporated by reference to an IRC section or index. Plans that don't incorporate these updates by reference will need to be amended by the end of 2022 for changes taking effect in 2020.