In a bit of good news for plan sponsors, the IRS announced in Notice 2022-33 on August 3, 2022, that it is extending upcoming plan amendment deadlines under the Setting Every Community Up for Retirement Enhancement Act of 2019 (“SECURE Act”), the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) and the Bipartisan Miners Act of 2019 (“Miners Act”) to December 31, 2025. (https://www.irs.gov/pub/irs-drop/n-22-33.pdf)
In most cases, private non-collectively bargained plans had until the last day of the first plan year beginning on or after January 1, 2022 (and collectively bargained plans had until the last day of the first plan year beginning on or after January 1, 2024) to adopt these amendments. For non-collectively bargained calendar year plans, that meant amendments generally had to be adopted by the end of 2022.
The extensions apply to amendments permitting defined benefit plan in-service distributions under the SECURE and Miners Acts to participants attaining age 59 ½ and the special 2020 required minimum distribution (“RMD”) rules under the CARES Act. The notice doesn’t extend the amendment deadline for the special CARES Act 2020 loan and withdrawal provisions which is still the end of 2022 for calendar year plans.
This is welcome news for plan sponsors waiting for final IRS rules on various aspects of the SECURE Act, including post-death RMD rules and the inclusion of long-term part-time employees, as well as providers of IRS pre-approved defined contribution plans as the IRS anticipates these amendments will be required during the fourth remedial amendment cycle window falling between February 1, 2024 and January 31, 2025.
The IRS stated in the notice that it expects to provide additional SECURE Act guidance with its 2023 Required Amendments List. The notice also gives the IRS additional time to offer sample plan language in a Listing of Required Modifications, or LRM, package it might publish to help guide plan sponsors in plan drafting.
Of course, affected plans will still need to ensure operational compliance with the law changes prior to the amendment deadline. The longer plan sponsors wait to adopt these amendments, the greater the chance for compliance errors. And extending the deadline also doesn’t provide additional help for plans terminating before 2025 which may not have the benefit of the additional IRS guidance.