Notice 2022-41: Extended Plan Amendment Deadlines

The Internal Revenue Service (IRS) has provided guidance that extends the deadlines for adopting required plan amendments. This relief, most recently updated by IRS Notice 2024-2, consolidates and pushes back the amendment deadlines for changes required by the SECURE Act, the CARES Act, the Miners Act, and the SECURE 2.0 Act of 2022. The guidance is a response to the complexities of implementing the new rules, many of which required operational compliance before the plan documents could be formally amended. By pushing back the final date for these amendments, the IRS has provided a more manageable timeline for employers.

Extended Plan Amendment Deadlines

A concept in plan administration is the remedial amendment period, which allows a plan sponsor to operate their plan in accordance with new legal requirements before the official plan document is formally changed. This period gives sponsors the flexibility to implement changes as they become effective, with the understanding that the written plan will be updated retroactively. Recent IRS guidance extends this period for amendments related to the SECURE, CARES, Miners, and SECURE 2.0 Acts.

For most qualified retirement plans, such as 401(k)s and 403(b) plans not maintained by a public school, the primary extended deadline for adopting these amendments is now December 31, 2026. This single date replaces a previous patchwork of deadlines, simplifying the compliance calendar for many employers.

Different deadlines apply to certain types of plans. For most collectively bargained plans, the amendment deadline is December 31, 2028. For governmental plans and 403(b) plans maintained by public schools, the deadline is December 31, 2029. Sponsors must recognize that even with the extended amendment deadline, their plans must have been operated in compliance with the law’s requirements from their respective effective dates.

Required and Optional Amendments Covered

The extended deadlines apply to a specific set of required and optional plan amendments stemming from recent legislation. A significant portion of these changes originates from the SECURE Act and its successor, the SECURE 2.0 Act. One amendment involves the increase in the required minimum distribution (RMD) age to 73. This age is scheduled to increase again to 75 starting on January 1, 2033, and plan documents must be amended to reflect these new thresholds.

Another SECURE Act provision covered is the option to permit penalty-free distributions for a qualified birth or adoption. Plans can allow participants to withdraw up to $5,000 per event without the 10% early withdrawal penalty. If a sponsor offers these qualified birth or adoption distributions (QBOADs), the plan document must be formally amended. The SECURE 2.0 Act clarified that repayment is limited to a three-year period.

The guidance also addresses amendments related to the CARES Act. One provision was the availability of coronavirus-related distributions (CRDs), which allowed affected participants to take distributions of up to $100,000 without the 10% early withdrawal penalty. The CARES Act also provided temporary relief for plan loan repayments, allowing participants to suspend repayments. Plans that permitted CRDs or implemented loan relief must be amended.

Finally, the extension applies to an amendment under the Miners Act. This law permits certain pension plans to lower the minimum age for in-service distributions from 62 to 59½. Plans making this change must amend their documents accordingly.

Rules for Terminating Plans

An exception to the extended amendment deadlines pertains to retirement plans that are in the process of termination. The general extension to December 31, 2026, does not apply if a plan is terminated before this date. Any required plan amendments, including those for the SECURE, CARES, and Miners Acts, must be formally adopted by the date the plan termination is completed. This means a plan sponsor cannot cease operations and wait until 2026 to update the plan document.

Failure to adopt all necessary amendments before the termination date can jeopardize the plan’s qualified status, potentially leading to adverse tax consequences for both the employer and the plan participants. Sponsors of terminating plans must work with their service providers to ensure all legislative updates are incorporated into the plan document before finalizing the termination.