October 05, 2022

With IRS recently extending several plan amendment deadlines, retirement plan sponsors now have few (if any) plan amendments to adopt before 2022 draws to a close.


Amendments for SECURE, CARES and other acts delayed

IRS Notices 2022-33 and 2022-45 recently extended the deadline for retirement plan sponsors to amend their plans for several significant pieces of legislation. Amendments for the following laws — which many sponsors would have had to adopt by Dec. 31, 2022 — generally are now due by Dec. 31, 2025 (governmental sponsors have different deadlines tied to their legislative calendars):


  • All provisions of the Setting Every Community Up for Retirement Enhancement (SECURE) Act (Div. O of Pub. L. No. 116-94)
  • Provisions of the Coronavirus Aid, Relief and Economic Security (CARES) Act (Pub. L. No. 116-136) that suspended 2020 required minimum distributions from defined contribution (DC) plans and allowed plans to offer special penalty-free distributions and plan loan relief to participants affected by the COVID-19 pandemic
  • The Bipartisan American Miners Act of 2019 (Div. M of Pub. L. No. 116-94) provision that lowered the permissible age for in-service distributions from pension plans to 59-1/2
  • Provisions of the Taxpayer Certainty and Disaster Tax Relief Act of 2020 (Div. EE of Pub. L. No. 116-260) allowing penalty-free distributions to participants affected by certain disasters


Parts of 2020 Required Amendments List still due in 2022

The Required Amendments List (RA List) is an annual list of tax law changes for qualified and 403(b) plans that establishes amendment deadlines for individually designed plans affected by items on the list. In general, sponsors must amend their plans for changes appearing on the RA List by the end of the second calendar year after the year a RA List is published. Accordingly, the amendment deadline for changes on the 2020 RA List in Notice 2020-83 is Dec. 31, 2022, unless IRS extends the deadline.


Difficulty-of-care payments under the SECURE Act. The 2020 RA List includes a SECURE Act provision that added “difficulty of care payments” for foster care providers to the Section 415 compensation of DC plan participants, effective for plan years starting after 2015. However, Notice 2022-33 extends plan amendment deadlines for the SECURE Act, without any exception for this provision. Therefore, the amendment deadline for this change apparently is now Dec. 31, 2025.


CARES Act expansion of CSEC plans. The 2020 RA List also includes a CARES Act provision that extended to certain sponsors providing services to mothers and children the special defined benefit funding rules for cooperative and small employer charity (CSEC) plans. CSEC plans aren’t subject to the funding-based benefit restrictions under Internal Revenue Code Section 436, so sponsors must amend plans that gained CSEC status under the CARES Act to remove benefit restriction provisions. Neither of the recent notices extending CARES Act amendment deadlines includes the deadline for these new CSEC plans. Therefore, sponsors of these plans should adopt amendments removing Section 436 benefit restriction language by Dec. 31, 2022.


Periodic updates not specifically mentioned on RA List. Each RA List automatically includes certain periodic updates, even though these items aren’t specifically referenced on that RA List. Examples of these updates include 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 such changes are effective. Most plans incorporate these items by reference, eliminating the need for amendments. But plans that don’t incorporate these items by reference must be amended by Dec. 31, 2022, for updates that took effect in 2020.


Discretionary amendments

Most discretionary amendments to reflect optional plan design changes must be adopted by the end of the plan year in which the change takes effect. Sponsors of calendar-year plans that made discretionary design changes in 2022 generally must adopt conforming amendments by Dec. 31.


Related resources

Brian J. Kearney
by Brian J. Kearney

Principal, Mercer’s Law & Policy Group

Margaret Berger
by Margaret Berger

Partner, Mercer’s Law & Policy Group

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