Extended Time to Amend Tax Qualified Retirement Plans for SECURE 2.0 Act and other Legislation
Retirement Plan

On December 20, 2023, the Internal Revenue Service (IRS) issued Notice 2024-2 to “provide guidance on discreet issues” concerning the implementation of specific provisions of the SECURE 2.0 Act of 2022 (SECURE 2.0)[1]. Under Notice 2024-2 the IRS exercised its authority to extend the date by which retirement plan amendments must be adopted to reflect the mandatory and discretionary provisions under SECURE 2.0 and other legislation enacted between 2019 and 2022 (aggregately the “Acts”) [2].

The new amendment deadlines are as follows:

Qualified Plans that are not Governmental Plans December 31, 2026
Governmental Qualified Plans December 31, 2029
Section 403(b) Plans Sponsored by  Tax Exempt Entities December 31, 2026
Applicable Collectively Bargained Plan of a Tax Exempt Entity[3] December 28, 2028
Public School Section 403(b) Plans December 31, 2029
Governmental 457(b) Plan the later of (a) December 31, 2029, or (b) the first day of the first plan year beginning more than 180 days after the day of notification by the IRS that the plan was administered in a manner inconsistent with Section 457(b).

Amendments made by the deadlines listed above are entitled to anti-cutback relief from the requirements of Code Section 411(d)(6) or ERISA Section 204(g). These Sections prohibit plan amendments that decrease accrued benefits (e.g., the amount of the benefit payable to a participant is less on the day the amendment is adopted than was payable on the day before adoption). Some of the provisions of SECURE 2.0 may decreased accrued benefits and would be prohibited without the anti-cutback relief. In the meantime, plans are required to be operated as if the amendment were in effect.

If you have any questions regarding plan amendments or the operation of your plans prior to the amendment deadline, please contact any member of our Employee Benefits practice group.

[1] Enacted on December 29, 2022 as part of the Consolidated Appropriations Act of 2022.

[2] The extended amendment deadline also applies to amendment required to comply with the Setting Every Community Up with for Retirement Enhancement Act of 2019, Div. O of Pub. L. No. 116-94 (SECURE 1.0), Section 104 of the Bipartisan American Miners Act of 2019, Div. M of Pub. L. No. 116-94) (Miners Act), Section 2202 or 2023 of the Coronavirus Aid, Relief, and Economic Security Act, Pub. L. 116-136 (CARES Act), and Section 302 of the Taxpayer Certainty and Disaster Tax Relief Act of 2022, Div. EE of Pub. L. 116-220 (Relief Act).

[3] A collectively bargained agreement ratified before December 29, 2022.

Posted in IRS, Retirement

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