IRS Gives 3-Year Extension on Secure, CARES Act Amendments
It's giving "retirement plan sponsors and IRA custodians more time to amend their documents,” Ed Slott says.
Advisors who sponsor retirement plans have been given three more years to comply with certain provisions of the Setting Every Community Up for Retirement Enhancement Act of 2019, or Secure Act, as well as the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act.
The Internal Revenue Service provided the extension for compliance with the Secure and CARES Act amendments in a recent notice.
The relief, according to Ed Slott of Ed Slott and Co., gives retirement plan sponsors “more time to amend their documents for CARES and SECURE Act changes.”
Under the CARES Act, the IRS notice extends the deadline “solely” with respect to the 2020 waiver of required minimum distributions, Groom Law Group notes in a recent alert.
The Secure Act amendments were due at the end of this year, according to Lou Mazawey, principal at Groom Law Group in Washington.
The IRS provides “relief to benefit plans from having to include new RMD language until 2025,” Mazawey told ThinkAdvisor Tuesday in an interview.
The deadline to amend for the RMD provision generally is Dec. 31, 2025 for non-governmental plans and, for governmental plans, “90 days after the close of the third regular legislative session of the legislative body with the authority to amend the plan that begins after Dec. 31, 2023 (subject to the special rule for 457(b) plans),” Groom explains in its alert.
Section 601 of the SECURE Act, Groom states, generally provides that plan amendments must be adopted by the end of the 2022 plan year or such later date as the Treasury Department prescribes.
The deadline for amendments under the SECURE Act, as explained by Groom, are:
- For non-governmental qualified and 403(b) plans, the amendment deadline is Dec. 31, 2025.
- For governmental qualified and 403(b) plans, the amendment deadline is 90 days after the close of the third regular legislative session of the legislative body with the authority to amend the plan that begins after Dec. 31, 2023.
- For governmental 457(b) plans, the amendment deadline is: the later of 90 days after the close of the third regular legislative session of the legislative body with the authority to amend the plan that begins after Dec. 31, 2023, or the first day of the first plan year beginning more than 180 days after the date of notification by the IRS that the plan was administered inconsistent with Code section 457(b) (if applicable).
Unfortunately, Groom states, the IRS notice “does not address an extension for coronavirus-related distributions and loans, and as these provisions are optional and we do not expect any future guidance, presumably they will not be reflected on a required amendments list.”