Among the many nuggets in Notice 2024-2 (Miscellaneous Changes Under SECURE 2.0 Act of 2022) (the “Notice”), affectionately referred to as the “grab bag” of SECURE 2.0 guidance issued at the end of 2023, are some changes to deadlines for various required interim amendments.
Plan Amendment Deadline Basics
Just to establish the basic rules that apply to the adoption timing of required interim amendments, a little review:
- “Required interim amendments” are those amendments that are required by changes in law between plan restatements and must be adopted within the remedial amendment period.
- The “remedial amendment period” is the period in which the plan sponsor may retroactively adopt the required interim amendments.
- For individually-designed qualified retirement plans, the general deadline for interim amendments is the end of the second calendar year following the year that the change is first included in the annual IRS Cumulative List. So, if a change first appears on the 2023 Cumulative List, then the general rule is that amendments must be adopted no later than December 31, 2025.
- Discretionary amendments generally must be adopted by the end of the year in which they are effective.
- If the change, required or discretionary, could result in a cutback under Code Section 411(d)(6) or ERISA Section 204(g), the amendment must be adopted prior to the date that the benefit affected is accrued. The general rule does not give anti-cutback protection.
- Specific deadlines are often issued for the required amendments which can be different than the general rule, and may provide anti-cutback protection.
- Plans must always be operated consistent with required changes in law (and elected optional changes in law) as of their respective effective dates, but these delayed amendment deadlines offer plan sponsors and document vendors time to develop amendment language and, in many cases, catch up with the ongoing issuance of regulatory guidance.
- Keep copies of all signed amendments in the plan’s files.
Qualified Retirement Plans
When SECURE 2.0 was enacted in 2022, the deadline for qualified plans to retroactively adopt required amendments and receive anti-cutback protection was no later than the last day of the first plan year beginning on or after January 1, 2025. SECURE 2.0 also extended the remedial amendment period for the SECURE Act 1.0, CARES Act, and Relief Act required amendments to coordinate with this later deadline. The Notice now extends the deadline to December 31, 2026. The Notice specifically provides that required amendments adopted after this deadline will not receive anti-cutback relief.
Deadlines for Retirement Plans Other Than Qualified Plans
The Notice changes the SECURE 2.0 amendment deadline for other types of retirement plans (for the general rules that apply to these plans, see Rev. Proc. 2022-40):
- 403(b) Plans. Code Section 403(b) plans have the following amendment deadlines:
- A plan that is not maintained by a public school, as described in Code Section 403(b)(1)(A)(ii), is December 31, 2026.
- A plan that is an applicable collectively bargained plan of a tax-exempt organization described in Code Section 501(c)(3) is December 31, 2028.
- A plan that is maintained by a public school, as described in Code Section 403(b)(1)(A)(ii), is December 31, 2029.
- Collectively Bargained Plans. Collectively bargained plans (plans maintained pursuant to one or more collective bargaining agreements between employee representatives and one or more employers ratified before December 29, 2022) have until December 31, 2028 to adopt required amendments (previously the last day of the first plan year beginning on or after January 1, 2027).
- Eligible Governmental Plans. Governmental plans (within the meaning of Code Section 414(D)) have until the later of (1) December 31, 2029, or (2) if applicable, the first day of the first plan year beginning more than 180 days after the date of notification by the Secretary that the plan was administered in a manner that is inconsistent with the requirements of Code Section 457(b) (previously the last day of the first plan year beginning on or after January 1, 2027).
- IRAs. The deadline to amend the trust governing an IRA is December 31, 2026. Deemed IRAs must be amended by the deadline that applies to the qualified plan under which the deemed IRA was established.
These Dates Are Important!
Paying attention to these deadlines is important, as the failure to timely adopt interim amendments can impact the qualification of your plan and result in costs to correct the failure and maintain tax-qualified status. In addition, meeting these amendment deadlines will often provide protection from anti-cutback restrictions that can apply when a change would otherwise result in a cutback. Mark your calendars and stay tuned.