The IRS has published Notice 2020-83, which sets forth the 2020 Required Amendments List (RA List).
All required amendments lists will apply to both individually designed plans qualified under Internal Revenue Code (IRC) Section 401(a) and individually designed plans that satisfy the requirements of Section 403(b). In general, an RA List includes statutory and administrative changes in requirements that are first effective during the plan year in which the list is published.
The IRS notes that Revenue Procedure (Rev. Pro.) 2019-39 provided a recurring remedial amendment period with respect to a form defect in a 403(b) individually designed plan. Generally, the remedial amendment period arising as a result of a change in 403(b) requirements ends on the last day of the second calendar year that begins after the issuance of the RA List on which the change in 403(b) requirements appears. December 31, 2022, generally is the last day of the remedial amendment period with respect to a disqualifying provision arising as a result of a change in qualification requirements that appears on the 2020 RA List, and a form defect arising as a result of a change in 403(b) requirements that appears on the 2020 RA List.
However, in general, for a qualified plan that is not a governmental plan or a 403(b) plan that is not maintained by a public school, the deadline to amend for provisions of the Setting Every Community Up for Retirement Enhancement (SECURE) Act and the regulations thereunder is the last day of the first plan year beginning on or after January 1, 2022.
On the 2020 RA List, there are no changes in requirements that generally would require an amendment to most plans.
There are two changes in requirements that may require an amendment, as follows:
- Difficulty of care payments treated as compensation for retirement contribution limitations: SECURE Act Section 116(b) increases the annual additions limit (Section 415 limit) for retirement plans to take into account difficulty of care payments. IRC Section 131(c) defines a difficulty of care payment as compensation to a foster care provider for the additional care required because the qualified foster individual has a physical, mental or emotional handicap. Section 415(c)(8)(A) provides that a participant’s compensation for purposes of Section 415(c)(1) is increased by the amount of difficulty of care payments.
- Application of cooperative and small employer charity pension plan rules to certain charitable employers: The Coronavirus Aid, Relief and Economic Security (CARES) Act Section 3609 adds Section 414(y)(1)(D) to the IRC. That section provides that a cooperative and small employer charity pension plan (CSEC plan) is defined to include a defined benefit (DB) plan that, as of January 1, 2000, was maintained by a tax-exempt employer that met specific characteristics. A CSEC plan is not permitted to include the benefit restrictions of Section 436.