Qualified Plan Amendment Deadline Extended

Take-Away: The IRS just extended the deadline when qualified plans must be amended to reflect changes required by the SECURE Act and the CARES Act.

Background: On August 3, 2022 the IRS released Notice 2022-33. That Notice provides an extension for qualified plans to adopt amendments under the SECURE Act. The Notice also addresses the need to amend qualified plans to reflect the Bipartisan Miners Act of 2019 (which provided defined benefit plans with an optional reduction in the minimum age for in-service distributions from age 62 to age 59 1/2) and also changes required under the CARES Act by plan sponsors who opted to authorize participants’ access to their retirement plan accounts for qualified coronavirus distributions.

Deadline: Non-governmental qualified plans will have until December 31, 2025 to adopt any of the optional or required changes to such plans under the SECURE Act, the Miners Act, or the CARES Act.

Example: Before this Notice 2022-33, a qualified plan had until the last day of the plan year beginning on or after January 1, 2022 to adopt the SECURE Act and CARES Act amendments. That meant for a calendar year plan that plan amendments had to be made by December 31, 2022. That deadline has now been pushed off for another 3 years.

Observation: This extension is welcome news to plan sponsors and plan administrators who await the Final Regulations on the SECURE Act’s required changes, including its required post-death distribution rules and its rules that govern the inclusion of long-term, part-time employees as plan participants. Also coming as some relief to plan sponsors and plan administrators will be that all of the changes required by the SECURE Act, the Miners Act, and the CARES Act can be adopted by plan sponsors all at the one time. According to the IRS, guidance under the SECURE Act will come in the form of the IRS’2023 Required Amendment list, which gives us some sense when the SECURE Act’s Final Regulations will be binding.