The IRS recently issued Notice 2023-79 to provide the 2023 Required Amendments List (the “RA List”) for individually designed qualified retirement plans and Section 403(b) plans.
As background, following the elimination of the five-year staggered remedial amendment cycles effective Jan. 1, 2017 — through Rev. Proc. 2016-37 — the IRS changed the timing rules for adopting amendments to existing individually designed plans, particularly for required amendments. The deadline for required amendments is now generally based on the RA List, which is published annually by the IRS.
If an item appears on the RA List for a particular year, the plan sponsor must adopt any amendments needed to conform to the item no later than the end of the second calendar-year beginning after the item first appears on the list. This timing rule also applies to non-calendar-year plans. For example, an amendment required by the 2023 RA List generally must be adopted by the end of the 2025 calendar-year, regardless of the plan year.
Note that the deadline for discretionary amendments — that is, generally those not required as a result of a law change — is typically the last day of the plan year in which the discretionary change is first effective, with potentially earlier deadlines for certain types of discretionary amendments.
The IRS separated the RA List into two parts:
- Part A: Covering changes in requirements that generally would require an amendment to most plans or to most plans of the type affected by the change
- Part B: Covering changes in requirements that the IRS anticipates will not require amendments to most plans but might require an amendment because of an unusual plan provision in a particular plan
The 2023 RA List does not include any required amendments under either Part A or Part B. However, the notice explains that Part B automatically includes the following periodic changes, even though they are not directly referenced in the RA List:
- The various dollar limits that are adjusted for cost-of-living increases under the Code
- The spot segment rates used to determine the applicable interest rate under Section 417(e)(3)
- The applicable mortality table under Section 417(e)(3).
As noted, the deadline for required amendments is now generally based on the RA List, except as otherwise provided by statute or in regulations or other guidance published by the IRS in the Internal Revenue Bulletin. In this regard, the IRS mentions that there have been a number of legislative changes to the qualified and Section 403(b) plan rules by the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act), the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the Taxpayer Certainty and Disaster Tax Relief Act of 2020, and the SECURE 2.0 Act of 2022 (SECURE 2.0 Act). The SECURE 2.0 Act provides that the general required amendment deadline for the changes made by these legislative acts is the last day of the first plan year beginning on or after Jan. 1, 2025, provided certain other terms and conditions are satisfied (for example, operating the plan in accordance with any changes that were effective or adopted before the amendment deadline).
None of these legislative changes have been identified in any RA List to date, including the 2023 RA list. Until and unless the IRS issues any further guidance, it appears plan sponsors of individually designed qualified and 403(b) plans generally should have at least until the end of the 2025 plan year to adopt any required amendments for these legislative changes.
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