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IRS Issues 2016 Required Amendments List

The IRS has released the 2016 required amendments (RA) list for individually designed qualified retirement plans. It issued the list on Dec. 13 in Notice 2016-80.

The list identifies certain changes in qualification requirements that became effective in 2016 that may require a retirement plan to be amended in order to remain qualified, and establishes the date by which any necessary amendment must be made.
In general, an RA list includes statutory and administrative changes in qualification requirements that are first effective during the plan year in which the list is published. However, an RA list does not include guidance issued or legislation enacted after the list has been prepared and also does not include:

  • statutory changes in qualification requirements for which the Treasury Department and the IRS expect to issue guidance (which would be included on an RA list issued in a future year);

  • changes in qualification requirements that permit (but do not require) optional plan provisions (in contrast to changes in the qualification requirements that cause existing plan provisions, which may include optional plan provisions previously adopted, to become disqualifying provisions); or

  • changes in the tax laws affecting qualified plans that do not change the qualification requirements under Internal Revenue Code Section 401(a) (such as changes to the tax treatment of plan distributions, or changes to the funding requirements for qualified plans).

Notice 2016-80 says that the 2016 RA list contains the following:

  • No changes in qualification requirements that generally would require an amendment to most plans or to most plans of the type affected by the change; and

  • Changes in qualification requirements that may require an amendment concern collectively bargained defined benefit plans, and include restrictions on accelerated distributions from underfunded single-employer plans in employer bankruptcy under Code Section 436.

The IRS issued the 2016 RA list under Revenue Procedure (Rev. Proc.) 2016-37, which provides that, in the case of an individually designed plan, the remedial amendment period for a disqualifying provision arising as a result of a change in qualification requirements generally is extended to the end of the second calendar year that begins after the issuance of the RA list in which the change in qualification requirements appears.

Under Rev. Proc. 2016-37, Notice 2016-80 provides that Dec. 31, 2018 is:

  • the last day of the remedial amendment period regarding a disqualifying provision arising due to a change in qualification requirements that appears on this 2016 RA List; and

  • the plan amendment deadline for a disqualifying provision arising due to a change in qualification requirements that appears on the 2016 RA List (although a later date may apply to a governmental plan).

Notice 2016-80 will be published in Internal Revenue Bulletin 2016-52, which will be issued on Dec. 27, 2016.