IRS Issues Notice Regarding 2021 Required Amendments List for Individually Designed Qualified and Section 403(b) Plans

The Required Amendments List (the “List” or “RAL”) is an annual list of changes in retirement plan qualification requirements (see Revenue Procedure 2016-37). It also establishes amendment deadlines for individually designed plans.

Generally, the Required Amendments List will include an item after the issuance of any guidance for the item, including any model amendment. However, the IRS has the discretion to include an item on the list in other circumstances, such as when a statutory change is enacted and no additional guidance is anticipated.

On November 30, 2021, the IRS issued Notice 2021-64, which provides the 2021 Required Amendments List for qualified retirement plans and Section 403(b) retirement plans. Individually designed qualified retirement plans and individually designed 403(b) plans must be amended by December 31, 2023 (the expiration of the remedial amendment period in the 2021 Required Amendments List) for any changes in requirements included on the list.

IRS Revenue Procedure 2016-37 eliminated the staggered five-year remedial amendment cycles for individually designed retirement plans. This Revenue Procedure also announced that the IRS intends to annually publish a Required Amendments List, which will:

  • List the statutory and administrative changes in qualification requirements that require a plan amendment and become effective during the plan year that the list is published.
  • Establish the deadline for a plan to be amended to comply with the requirements that are identified on the list.

The Required Amendments List has two parts:

  • Part A, which provides the changes in requirements that generally would require an amendment to most plans, or most plans of the type affected by the change.
  • Part B, which provides the changes in requirements that the Treasury Department and the IRS anticipate will not require amendments in most plans but might require an amendment because of an unusual plan provision in a particular plan.

Part A of the 2021 Required Amendments List includes an amendment for multiemployer plans that apply for special financial assistance under ERISA Section 4262 and Code Section 432(k), which were added by Section 9704 of the American Rescue Plan Act of 2021 (ARPA-2021). Part B does not include changes that might require a plan amendment because of an unusual plan provision in a particular plan.

For individually designed plans, Revenue Procedure 2016-37 extended the remedial amendment period for a disqualifying provision resulting from a change in qualification requirements. The extended period lasts through the end of the second calendar year that begins after the issuance of the Required Amendments List, when the change appears in qualification requirements. The plan amendment deadline is the date on which the remedial amendment period ends for a disqualifying provision.

Under Notice 2021-64, December 31, 2023, is both:

  • The last day of the remedial amendment period for disqualifying provisions and form defects resulting from a change that appears on the 2021 Required Amendments List; and
  • The plan amendment deadline for a disqualifying provision or form defect resulting from a change in requirements that appears on the 2021 Required Amendments List.

HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.

 

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Hall Benefits Law, LLC

HBL offers employers comprehensive legal guidance on benefits in mergers and acquisitions, Employee Stock Ownership Plans (ESOPs), executive compensation, health and welfare benefits, healthcare reform, and retirement plans. We counsel a wide spectrum of clients including small, mid-sized, and large companies, 401(k) investment advisors, health insurance brokers, accountants, attorneys, and HR consultants, just to name a few. HBL is passionate about advising clients, and we are dedicated to our mission: to provide comprehensive, personalized, and practical ERISA and benefits legal solutions that exceed client expectations.

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