The IRS on Sept. 26 in Notice 2022-45 announced that it is extending the deadline by which certain plans must be amended under the CARES Act and the Taxpayer Certainty and Disaster Tax Relief Act of 2020.
CARES Act and Relief Act
Specifically, the deadline is extended under Section 2202 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which provided for COVID-related distributions and loan relief to participants, and Section 302 of Title III of the Taxpayer Certainty and Disaster Tax Relief Act of 2020 (Relief Act), which provided special disaster-related rules for use of retirement funds, set forth in Division EE of the Consolidated Appropriations Act, 2021.
Under Section 2202(c) of the CARES Act, an eligible retirement plan will not be treated as failing to operate in accordance with its terms merely because the plan implements the provisions of Section 2202, or any regulations under it, if the plan is amended within the period that begins on the date that Section 2202 (or any regulation thereunder) takes effect, and ends on or before the earlier of:
(1) the date the amendment is adopted, or
(2) the last day of the first plan year beginning on or after Jan. 1, 2022 (or Jan. 1, 2024, in the case of a governmental plan under Internal Revenue Code Section 414(d), or a later date prescribed by the Treasury Secretary.
A plan satisfying these conditions will not fail to meet the requirements of Internal Revenue CodeSection 411(d)(6) and Section 204(g) of ERISA by reason of that amendment, except as provided by the Secretary.
For an amendment made to reflect provisions of Section 2202 of the CARES Act, the period during which the amendment is eligible, if applicable, for relief from the anti-cutback requirements of Code Section 411(d)(6) or Section 204(g) of ERISA is extended to the applicable extended plan amendment deadline.
Similarly, under Section 302(d) of the Relief Act, an eligible retirement plan will not be treated as failing to operate in accordance with its terms merely because the plan implements the provisions of Section 302, or any regulations thereunder, if the plan is amended within a prescribed period and the amendment applies retroactively to the beginning of it. The period begins on the date that Section 302 (or any regulation thereunder) takes effect, and ends on or before the earlier of:
(1) the date the amendment is adopted, or
(2) the last day of the first plan year beginning on or after Jan. 1, 2022 (or Jan. 1, 2024, in the case of a governmental plan within the meaning of Code Section 414(d), or a later date prescribed by the Secretary.
What the Notice Does
In detail, Notice 2022-45 does the following:
Qualified Plans
In general, for a qualified plan that is not a governmental plan under Code Section 414(d), the deadline to amend a plan is Dec. 31, 2025. The plan amendment deadline for a qualified governmental plan, under Code Section 414(d), 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.
403(b) Plans
In general, for a 403(b) plan that is not maintained by a public school, the deadline to amend a plan is Dec. 31, 2025. The plan amendment deadline for a 403(b) plan that is maintained by a public school, 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.
457(b) Plans
The deadline to amend a governmental 457(b) plan is the later of (1) 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 (2) if applicable, the first day of the first plan year beginning more than 180 days after the date of notification by the Secretary that the plan was administered in a manner that is inconsistent with the requirements of Internal Revenue Code Section 457(b).
IRAs
The deadline to amend the trust governing an IRA that is an individual retirement account or the contract issued by an insurance company with respect to an IRA that is an individual retirement annuity is Dec. 31, 2025.
Anti-cutback Relief
Amendments to an eligible retirement plan (including an annuity contract) to reflect a provision of Section 2202 of the CARES Act or any regulations thereunder that are made on or before the dates as extended under Notice 2022-45 will not cause the plan to fail to satisfy the anti-cutback requirements of Code Section 411(d)(6) or Section 204(g) of ERISA, if applicable, by reason of the amendments.
Notice 2022-45 will be in published in Internal Revenue Bulletin 2022-42 on Oct. 17, 2022.
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