Under Rev. Proc. 2016-37, Section 15.04(2), the deadline for the timely adoption of a discretionary amendment to a pre-approved qualified plan is the end of the plan year in which the plan amendment is operationally put into effect (see Legal Update, IRS Provides Determination Letter Guidance in Revenue Procedure 2016-37).

Before Rev. Proc. 2020-40, Section 15.05 of Rev. Proc. 2016-37 provided that the Section 15.04(2) deadline applies to discretionary amendments unless a statutory provision or IRS guidance provides an earlier deadline to timely adopt a discretionary amendment for a plan year.

Under Rev. Proc. 2020-40, Section 15.05 of Rev. Proc. 2016-37 now provides that the Section 15.04(2) deadline applies to discretionary amendments to pre-approved qualified plans for a plan year unless a statute, regulation, or other IRS guidance provides a deadline to adopt a discretionary amendment that is either earlier or later than the deadline under Section 15.04. (Rev. Proc. 2020-40 does not make any changes to the application of Section 15.05 to deadlines for interim amendments to pre-approved qualified plans.) (See Legal Update, IRS Provides Determination Letter Guidance in Revenue Procedure 2016-37.)

Under Rev. Proc. 2019-39, Section 12.01, the deadline for the timely adoption of a discretionary amendment to a pre-approved 403(b) plan:

(See Legal Update, IRS Revenue Procedure 2019-39 Establishes Recurring Remedial Amendment Periods for 403(b) Plans.)

Before Rev. Proc. 2020-40, Section 12.02 of Rev. Proc. 2019-39 provided that the Section 12.01 deadline applies unless a statutory provision or IRS guidance provides an earlier deadline to timely adopt a discretionary amendment with respect to a plan year.

Rev. Proc. 2020-40 modifies Section 12.02 of Rev. Proc. 2019-39 to provide that the deadline in Section 12.01 of Rev. Proc. 2019-39 applies to discretionary amendments to pre-approved 403(b) plans unless a statute, regulation, or other IRS guidance provides a deadline to adopt a discretionary amendment with respect to a plan year that is either earlier or later than the deadlines under Section 12.01 (Rev. Proc. 2020-40 does not make any changes to the application of Section 12.02 that applies to deadlines for interim amendments to pre-approved 403(b) plans.) (See Legal Update, IRS Revenue Procedure 2019-39 Establishes Recurring Remedial Amendment Periods for 403(b) Plans.)

Rev. Proc. 2020-40 explains that these modifications are consistent with the extensions of the plan amendment deadlines for discretionary amendments provided in Section 8.02 of Rev. Proc. 2016-37 for individually designed qualified plans and Section 6.02 of Rev. Proc. 2019-39 for individually designed 403(b) plans.

The modifications made by Rev. Proc. 2020-40 are effective as of September 2, 2020.