IRS Extends Deadlines for Retirement Plan Amendments

Posted on Aug 24, 2022

This month, the IRS extended the deadlines to adopt certain retirement plan amendments for most plans. Notice 2022-33 provides plan sponsors with an extension until December 31, 2025 to adopt formal plan amendments for the CARES Act and the SECURE Act of 2019. The extension covers mandatory and optional amendments related to both Acts and applies to qualified plans, including 401(k) and 403(b) plans, governmental 457(b) plans, and IRAs. The amendments subject to the deadline extension include amendments related to SECURE, the CARES required minimum distribution 2020 holiday, and Section 104 of the Bipartisan American Miners Act of 2019.

However, there are exceptions to the deadline extension. Plan sponsors need to be aware that qualified governmental plans, 457(b) plans, and 403(b) plans maintained by a public school have different rules related to the extension. In addition, the IRS notice does not create an extension for adopting the CARES-related loans and distributions provisions, which must still be adopted by December 31, 2022 for most plans.

Before this extension was announced by the IRS, plan sponsors would have been required to meet the deadline the last day of the first plan year beginning after December 31, 2021. If SECURE and CARES amendments have already been adopted, modification to these amendments can still be made by the extended deadline without violating ERISA’s anti-cutback requirements.

To take advantage of the extension, the process for plan sponsors is straightforward. First, adopt amendments by the new deadline of December 31, 2025 and make the effective date retroactive to the effective date of the legislation. The plan sponsor should simply proceed to operate the plan as if the amendment was always in effect.

This material is provided for informational purposes only, and is not intended as authoritative guidance, legal advice, or assurance of compliance with state and federal regulations.