IRS Notice 2021-64 (Nov. 30, 2021)
Available at https://www.irs.gov/pub/irs-drop/n-21-64.pdf
The IRS has issued its 2021 Required Amendments List (RA List) for individually designed qualified retirement plans (including 401(k) plans) and 403(b) plans. This year’s list does not identify any qualification changes that require 401(k) plans to be amended. In fact, it identifies only one change, which only affects financially troubled multiemployer defined benefit plans that received special financial assistance under the American Rescue Plan Act of 2021.
RA Lists are issued annually to identify changes in the Code’s qualification requirements that may result in “disqualifying provisions” that necessitate a remedial amendment (see our Checkpoint article). (A disqualifying provision is a required provision that is not in the plan document, a provision in the document that does not comply with the Code’s qualification requirements, or a provision that the IRS so designates.) RA Lists are usually divided into two parts. Part A lists changes in qualification requirements that require most plans of the relevant type to be amended. Part B lists changes that should only require amendments for certain plans with unusual plan provisions affected by the changes. Periodic cost-of-living adjustments (COLAs) to various dollar limitations do not appear on the annual RA List but are treated as if they are included. Many plans do not need to be amended to reflect these periodic COLAs. (For the 2022 COLAs, see our Checkpoint article.)
EBIA Comment: While this year’s RA List does not specify changes for 401(k) plans, that does not necessarily mean that 401(k) plan sponsors have no amendments to adopt. Amendments for prior RA List items may still be due. For example, amendments relating to the final hardship distribution regulations that were issued in October 2019 (see our Checkpoint article) and appeared on the 2019 RA List (see our Checkpoint article) generally must be adopted by the end of this month. The RA List also does not cover discretionary plan amendments, which generally must be adopted by the end of the plan year in which discretionary plan design or operational changes are implemented, except for certain discretionary amendments that must be adopted before they are implemented (such as amendments relating to elective deferral and safe harbor provisions, and amendments subject to the anti-cutback rule). And employers that decide to offer certain types of disaster relief under their plans may need to amend their plans before the deadlines set by disaster-specific IRS guidance, even though disaster-related amendments are not included on the RA List. For example, retroactive amendments to conform a plan to the distribution, loan, and required minimum distribution relief enacted in response to the COVID-19 pandemic generally are required by the last day of the first plan year beginning in 2022 (see our Checkpoint article). (Later dates may apply to governmental plans.) For more information, see EBIA’s 401(k) Plans manual at Sections IV.B (“Form and Operational Qualification Requirements”), XII.I (“Required Minimum Distributions”), XXVII.E.3 (“Deadlines for Disaster-Relief Amendments”), XXVII.F (“Remedial Amendment Periods Under the Code”), and XXVII.G.1 (“Extended Remedial Amendment Periods for Individually Designed Plans”).
Contributing Editors: EBIA Staff.