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IRS Extends the Initial Remedial Amendment Period for 403(b) Plans and the Remedial Amendment Cycle for Pre-Approved Defined Benefit Plans
Practical Law Legal Update w-024-7339 (Approx. 3 pages)
IRS Extends the Initial Remedial Amendment Period for 403(b) Plans and the Remedial Amendment Cycle for Pre-Approved Defined Benefit Plans
by Practical Law Employee Benefits & Executive Compensation
| Published on 30 Mar 2020 • USA (National/Federal) |
The Internal Revenue Service (IRS) has extended the initial remedial amendment period for individually designed and pre-approved Internal Revenue Code Section 403(b) plans to June 30, 2020, and has also extended the second six-year remedial amendment cycle for pre-approved defined benefit plans to July 31, 2020.
On March 27, 2020, the IRS announced on its website that it is extending certain deadlines for Internal Revenue Code Section 403(b) plans and pre-approved defined benefit plans.
Specifically, the IRS announced that:
- It will extend the last day of the initial remedial amendment period for 403(b) plans from March 31, 2020, to June 30, 2020.
- 403(b) plan sponsors now have until June 30, 2020, to update their pre-approved and individually designed 403(b) plan documents and that:
- the initial remedial amendment period for 403(b) plans is January 1, 2010, to June 30, 2020;
- the second cycle for pre‑approved 403(b) plans will begin on July 1, 2020; and
- the rules for the recurring remedial amendment periods for individually designed 403(b) plans will apply to form defects first occurring after June 30, 2020.
- It will extend from April 30, 2020, to July 31, 2020:
- the deadline for employers to adopt a pre-approved defined benefit plan that was approved based on the 2012 Cumulative List and to submit a determination letter application (if eligible) under the second six-year remedial amendment cycle; and
- the end of the second six-year remedial amendment cycle for pre-approved defined benefit plans, as set forth in IRS Announcement 2018-05 (see Legal Update, IRS Intends to Issue Opinion and Advisory Letters for Pre-Approved Defined Benefit Plans for the Second Six-Year Remedial Amendment Cycle).
- The remedial amendment period for disqualifying provisions described in Section 15.03 of Rev. Proc. 2016-37 is extended to July 31, 2020, which will now be the end of the second six-year remedial amendment cycle (see Legal Update, IRS Provides Determination Letter Guidance in Revenue Procedure 2016-37).
- The third six-year remedial amendment cycle for pre-approved defined benefit plans will begin on August 1, 2020, and will still end on January 31, 2025. The IRS explained in its announcement that the on-cycle submission period for pre-approved defined benefit plan providers to submit opinion letter applications for the third six-year remedial amendment cycle will still begin on August 1, 2020, and end on July 31, 2021.
Practical Implications
Sponsors and administrators of 403(b) plans and pre-approved defined benefit plans should be aware that the IRS has extended the deadlines for several remedial amendment periods.