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IRS Extends SECURE Act and CARES Act Modification Deadlines


The IRS has prolonged the deadlines for adopting retirement plan amendments to replicate sure provisions of the SECURE Act and the CARES Act. As background, underneath the SECURE Act, the plan modification deadline for many plans is the final day of the primary plan yr starting on or after January 1, 2022 (2024 for governmental and relevant collectively bargained plans; see our Checkpoint article). Equally, the plan modification deadline underneath the CARES Act is the tip of the primary plan yr starting on or after January 1, 2022 (2024 for governmental plans; see our Checkpoint article).

For many plans, the discover extends the deadline to undertake relevant amendments till December 31, 2025. Later deadlines apply for governmental plans, however not collectively bargained plans. The discover revises earlier steering in Discover 2020-68 for sure required and discretionary SECURE Act amendments (see our Checkpoint article) and in Discover 2020-86 for SECURE Act adjustments affecting secure harbor 401(ok) plans (see our Checkpoint article). The prolonged deadlines additionally apply to amendments by outlined contribution plans (together with 401(ok) plans) reflecting the waiver of required minimal distributions for 2020 underneath the CARES Act. (The IRS has offered a pattern plan modification for this goal; see our Checkpoint article.) Well timed adopted amendments is not going to trigger a plan to fail to fulfill the anti-cutback guidelines underneath the Code or ERISA as long as, within the interim, the plan operates as if a retroactive modification have been already in impact.

EBIA Remark: This discover doesn’t prolong the deadline for adopting retroactive amendments reflecting the CARES Act’s optionally available coronavirus-related distribution and mortgage aid—that deadline stays the final day of the primary plan yr starting in 2022 (2024 for governmental plans). Needless to say, not like the unique deadline, which was decided on the subject of the plan yr, the prolonged deadline for many plans is a selected date, so non-calendar yr plans obtain much less time than the final three-year extension. (Governmental plan deadlines are typically based mostly on legislative classes.) For extra data, see EBIA’s 401(ok) Plans guide at Sections XXVII.E (“Modification Timing: Overview”), XXVII.G (“IRS Steerage Extending Remedial Modification Durations”), and XXVII.H (“Individually Designed Plans: Plan Amendments Desk”).

Contributing Editors: EBIA Workers.

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