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September 2022: IRS Extends Due Date for Certain SECURE Act, CARES Act, and CAA Plan Amendments 

13 Sep

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Update Applicable to: 
All employers with government-provided retirement plans.

What happened?
On August 3, 2022, the Internal Revenue Service (“IRS”) published Notice 2022-33, announcing the extension of the deadline for specific Setting Every Community Up for Retirement Enhancement Act (“SECURE Act”), Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), and Further Consolidated Appropriations Act (“CAA”) or Bipartisan Miners Act non-governmental qualified retirement plan amendments until December 31, 2025 (from December 31, 2022).

What are the details? 
With this notice, the IRS has essentially provided a three-year extension on amending plan documents to comply with the SECURE Act, required minimum distribution provisions of the CARES Act, and provisions for pension plan distribution at age 59 ½ in the CAA. 

Despite the postponement of amendment due dates, plans must still comply with the provisions of the SECURE Act, CARES Act, and CAA as then in effect. 

Below is a list of some of the more prominent provisions that have a postponed amendment due date:

  • SECURE Act provisions increasing to age 72 (from age 70½) the age at which required minimum distributions (“RMDs”) must begin;
  • SECURE Act provisions concerning when and how 401(k) and other defined contribution plans make RMDs after a participant’s death;
  • SECURE Act provisions require the inclusion of part-time employees who have worked more than 500 hours in three consecutive years;
  • Optional SECURE Act provisions permitting in-service distributions for qualified birth and adoption expenses;
  • Optional SECURE Act provisions Increasing the maximum automatic enrollment safe harbor percentage to 15% (from 10%) of compensation;
  • Waiver of 2020 RMDs under the CARES Act; and
  • Optional reduction of the minimum age (to 59½ from 62) for defined benefit plans for in-service distributions.

Amendments can be made for these and other provisions at any time, but based on Notice 2022-33, plan amendments for non-governmental qualified retirement plans are not required until December 31, 2025.

What Did Not Change
Most provisions of the CARES Act still require amendment before the end of the current plan year. If your plan elected to apply any of the following CARES Act provisions, plan amendments are due by December 31, 2022, for calendar year plans:

  • Increased loan limits (to $100,000 from $50,000) during parts of the COVID pandemic;
  • COVID-related in-service distributions; and
  • Temporary suspension of loan repayments or additional time for loan repayments during part of the COVID pandemic.

For more information, please see the links below:

Notice 2022-33

Article 

What do employers need to do?
Employers should review the links provided above and take steps to ensure they are administering their retirement plans in accordance with applicable law.

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This communication is intended solely for the purpose of conveying information. The present post might incorporate hyperlinks directing readers to websites managed by third-party entities. The inclusion of any links within this communication is meant to serve as points of reference and could encompass opinion articles from various law firms, articles from HR associations, official websites, news releases, and documents of government agencies, and other relevant third-party sources. Vensure has no authority over these external websites and bears no responsibility for their content. Furthermore, Vensure does not endorse the materials present on these websites. The contents of this communication should not be interpreted as legal advice or as a legal standpoint concerning specific facts or scenarios. Nor should it be deemed an exhaustive compilation of facts potentially pertinent to federal, state, or local laws. It is strongly advised that employers solicit legal guidance from an employment attorney when undertaking actions in response to any legal updates provided. This is due to the possibility of future alterations occurring in federal, state, and local laws, regulations, as well as the directives and guidelines issued by governing agencies. These changes may transpire at any given time, potentially rendering certain portions of the content within this update void or inaccurate.

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