On August 3, 2022, the IRS issued Notice 2022-33 that extends the deadline for amending qualified retirement plans (including collective bargaining plans), 403 (b) plans (other than plans maintained by a public school) and individual retirement accounts (“IRAs”) from the last day of the plan year beginning on or after January 1, 2022, until December 31, 2025. This extension applies to provisions under the Setting up Every Community for Retirement Enhancement Act of 2019 (“SECURE Act”), the Bipartisan American Miners Act of 2019 (“Miners Act”), and the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) (collectively “Acts”). Governmental plans, other 403(b) plans, 457(b) plans and pre-approved plans have different deadlines.
Generally, the extension applies to the following amendments:
- SECURE Act provisions:
- Change in age for required minimum distributions (“RMDs”) from 70-1/2 to 72 and for qualified adoption and birth distributions;
- Modify RMDs to beneficiaries under defined contribution plans;
- Require long-term part-time employees who meet certain service requirements to make deferrals under 401k plans; and
- Increase the maximum automatic enrollment contributions under 401k plans from 10% to 15% of eligible compensation.
- CARES Act provisions:
- Waiver of RMDs from defined contribution plans in 2020.
- MINERS Act provision:
- Allow in-service distributions from defined benefit plans at age 59-1/2.
The Notice does not extend the deadline for elective provisions under the CARES Act for COVID related distributions and loans. Thus, if any qualified plan allowed such distributions and loans, such plans must (without further guidance) be amended by the end of the 2022 plan year.
Finally, please note that even though the amendment deadlines have been extended, your plan must be operated in accordance with the provisions of the Acts from the effective date of such provisions in the Acts. Thus, due to the length of time of the extension, experience with extensions in prior years suggests that plan sponsors for administrative purposes may want to amend their plans by the end of 2022 to incorporate the applicable provisions and notify participants of such changes. The only downside is that the plans may need further amendments based on additional IRS guidance prior to the end of 2025.