On August 3, 2022, pension plan sponsors welcomed IRS Notice 2022-33 (“Notice”), which extends the deadline for enacting amendments to comply with the Betterment Act of 2019. each community’s retirement (“SECURE Act”), Section 104 of the Bipartisan American Miners Act (“Miners Act”) and certain provisions of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). For most plans, the amendment deadline is extended three years to December 31, 2025, but some amendments are still needed before the end of the year.
The most useful delay applies to a provision of the CARES Act that requires changes to defined contribution plan language governing required minimum distributions. Plan sponsors had difficulty accepting the concept of changing the plan language governing the rules for distributing benefits paid on the death of a member, given that the current regulations are still in the proposed form. Employers now expect the regulations to be finalized before the 2025 amendment deadline.
Under the notice, the deadline to amend a plan for waiver of the required 2020 minimum distribution under the CARES Act has been extended to December 31, 2025. Similarly, the SECURE Act requirement to change the age at which required minimum distributions begin has been delayed to 2025. Other changes for which the deadline has been delayed include changing the eligibility rules for part-time employees who work at least 500 hours in each of three consecutive years and the authority to withdraw qualifying birth or adoption distributions up to $5,000 per year without penalty. child. The extension also applies to the provision of the Juveniles Act, which allows in-service distributions after age 59½ in pension plans and government 457(b) plans.
Non-government qualified plans, 403(b) plans and IRAs
For the required amendment items covered by the notice, the amendment deadline of December 31, 2025 applies to non-government qualified plans, non-public school-operated 403(b) plans, and IRAs. For qualified government plans and 403(b) plans maintained by a public school, the deadline is 90 days after the close of the third regular legislative session of the legislature with the power to amend the plan beginning after 31 December 2023. Finally, the deadline for amending a government plan under Section 457(b) is the later of 90 days after the close of the third regular legislative session of the legislative body with the power to amend the plan. that begins after December 31, 2023, or, if applicable, the first day of the first year of the plan beginning more than 180 days after the date of notification that the plan was administered, such that it is inconsistent with the requirements of Section 457(b).
CARES Act deadline not universally extended
Commentators accuse the IRS of missing an opportunity to extend meaningful relief by not including all of the provisions of the CARES Act. There is speculation that if Congress passes the currently pending pension legislation (SECURE 2.0), the deadline for these missed provisions of the CARES Act will also be extended. However, if further relief is enacted, given busy end-of-year schedules and winter holidays, plans may already have changed by the time they are announced.
The deadline for the following plan amendments remains December 31, 2022:
Amend plan to allow coronavirus-related distributions;
Amend the scheme to allow for increased limits on loans from the scheme; and
Modify the plan to allow for an extended loan repayment period.
Similarly, the timeline for amending the Taxpayer Certainty and Disaster Tax Relief Act of 2020 (included in the Consolidated Appropriations Act of 2021) which provided for limited distribution and loan relief for participants in qualifying disaster areas has not been extended.
© 2022 Jackson LewisNational Law Review, Volume XII, Number 238