The IRS has extended the deadlines for adopting retirement plan amendments to reflect certain provisions of the SECURE Act and the CARES Act. As background, under the SECURE Act, the plan amendment deadline for most plans is the last day of the first plan year beginning on or after January 1, 2022 (2024 for governmental and applicable collectively bargained plans; see our Checkpoint article). Similarly, the plan amendment deadline under the CARES Act is the end of the first plan year beginning on or after January 1, 2022 (2024 for governmental plans; see our Checkpoint article).
For most plans, the notice extends the deadline to adopt applicable amendments until December 31, 2025. Later deadlines apply for governmental plans, but not collectively bargained plans. The notice revises previous guidance in Notice 2020-68 for certain required and discretionary SECURE Act amendments (see our Checkpoint article) and in Notice 2020-86 for SECURE Act changes affecting safe harbor 401(k) plans (see our Checkpoint article). The extended deadlines also apply to amendments by defined contribution plans (including 401(k) plans) reflecting the waiver of required minimum distributions for 2020 under the CARES Act. (The IRS has provided a sample plan amendment for this purpose; see our Checkpoint article.) Timely adopted amendments will not cause a plan to fail to satisfy the anti-cutback rules under the Code or ERISA so long as, in the interim, the plan operates as if a retroactive amendment were already in effect.
EBIA Comment: This notice does not extend the deadline for adopting retroactive amendments reflecting the CARES Act’s optional coronavirus-related distribution and loan relief—that deadline remains the last day of the first plan year beginning in 2022 (2024 for governmental plans). Keep in mind that, unlike the original deadline, which was determined with reference to the plan year, the extended deadline for most plans is a specific date, so non-calendar year plans receive less time than the general three-year extension. (Governmental plan deadlines are generally based on legislative sessions.) For more information, see EBIA’s 401(k) Plans manual at Sections XXVII.E (“Amendment Timing: Overview”), XXVII.G (“IRS Guidance Extending Remedial Amendment Periods”), and XXVII.H (“Individually Designed Plans: Plan Amendments Table”).
Contributing Editors: EBIA Staff.