The IRS recently issued the 2021 Required Amendments List (“RA List”) for qualified retirement plans in Notice 2021-64
, providing one change 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 2021 RA List generally must be adopted by the end of the 2023 calendar year (regardless of the plan year).
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 2021 RA List includes one item in Part A and no items in Part B.
The one item in Part A centers on the American Rescue Plan Act of 2021, which added Section 432(k) to provide rules relating to an eligible multi-employer plan that applies to the Pension Benefit Guaranty Corporation (PBGC) for special financial assistance. Section 432(k) requires multi-employer plans receiving PBGC special financial assistance to reinstate any benefits that were suspended, effective as of the first month in which the effective date for the special financial assistance occurs, for participants and beneficiaries as of such month. Section 432(k) further provides that an eligible multi-employer plan must also provide payments equal to the amount of benefits previously suspended for participants in pay status, as a lump sum or in equal monthly installments over a period of five years, with no adjustment for interest.
This item on the 2021 RA List builds on guidance previously issued in Notice 2021-38, and the 2021 RA List explains which amendments may be required to reflect the requirements imposed by Section 432(k).
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