The IRS recently issued the 2020 Required Amendments (RA) List for qualified retirement plans in Notice 2020-83
, providing two changes that may require some plan sponsors to make an amendment.
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 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 2020 RA List generally must be adopted by the end of the 2022 calendar year (regardless of the plan year).
The 2020 RA List does not include any items that would generally require an amendment to most plans or to most plans of the type affected by the change. However, it does contain two items reflecting recent legislative changes that may require an amendment. The Setting Every Community Up for Retirement Enhancement (SECURE) Act added Section 415(c)(8)(A) to provide that a plan participant’s compensation for purposes of § 415(c)(1) is increased by the amount of difficulty of care payments provided by their employer. The first item on the 2020 RA List builds on guidance previously issued in Notice 2020-68. The 2020 RA List provides that if an employer made difficulty-of-care payments for a plan year beginning before Jan. 1, 2020, the plan must be amended by Dec. 31, 2022, or if later, the SECURE Act Section 601 applicable to the plan as set forth in Notice 2020-68. In addition, if an employer begins to make difficulty of care payments in future years, the plan must be amended to by the end of the second calendar year following the calendar year in which the employer begins to make difficulty of care payments.
The second item on the 2020 RA List addresses cooperative and small employer charity pension (CSEC) plan rules applicable to certain charitable employers enacted by the CARES Act under Section 441(y)(1)(D). The guidance provides that a Section 414(y) CSEC plan is not permitted to include benefit restrictions of Section 436.
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