Auld Lang Syne — and a Deadline

Or two. Or more. New Year’s Eve heralds more than the end of 2022. It also marks a number of deadlines that a plan and professionals serving it may want to keep in mind. 

Plan Design Changes

A plan generally must be amended by the end of the plan year to reflect changes an employer made during the year. If a plan is a calendar-year plan, those amendments must be made by Dec. 31. 

Required Minimum Distributions

Under the SECURE Act, by Dec. 31, 2022, the plan documents of defined contribution plans must be formally amended to reflect changes that had to be made in 2020, and amendments must have been executed by then. These changes include: 

• For participants born after June 30, 1949, plans must adopt an amendment increasing the required beginning date for required minimum distributions (RMDs) from April 1 following the calendar year in which a participant attains age 70½ to April 1 following the calendar year in which a participant reaches age 72. 
• Plans must adopt an amendment changing the distribution timing rules for benefits paid when a participant dies. For participants who die on or after Jan. 1, 2020, distributions must be completed within 10 years after the participant’s death, unless the participant’s beneficiary is his or her spouse or another eligible designated beneficiary.  

On Aug. 3, 2022, the IRS announced in Notice 2022-33 that it is extending the deadline for amending a retirement plan to reflect the provisions of Section 2203 of the CARES Act, which concerns a waiver of RMDs. Under that notice, the extended amendment deadline for (1) a qualified retirement plan or 403(b) plan (including an applicable collectively bargained plan) that is not a governmental plan or (2) an IRA now is Dec. 31, 2025.  However, the IRS did not list 457s offered by non-governmental, tax-exempt employers among those plans to which the notice applies; consequently, they still will need to amend their plans by Dec. 31, 2022. 

QACAs and EACAs

Under the SECURE Act, effective for plan years beginning after Dec. 31, 2019, the maximum permissible deferral rate for a qualified automatic contribution arrangement (QACA) was raised from 10% of compensation to 15% of compensation for the second plan year and all subsequent plan years (the maximum rate through the end of the first year remains at 10%). An employer that wants to make this change should consider amending the plan to do so by Dec. 31, 2022. 

And, if an employer wants to add a QACA or an Eligible Automatic Contribution Arrangement (EACA) to its plan for the 2022 plan year, it must adopt an amendment by Dec. 31, 2022 if it has a calendar year plan. 

ACP Contribution Safe Harbor for 2022

If an employer wants to add an ACP contribution safe harbor to its 403(b) plan for the 2022 plan year, it must amend the plan by Dec. 31, 2022, if it has a calendar year plan.