Skip to main content

You are here

Advertisement


IRS Updates Operational Compliance List for 403(b) Requirements

The IRS has updated the operational compliance list relevant to 403(b) requirements effective during the calendar year. The update adds a discussion of provisions that became effective in 2022.

The IRS intends the list to help plan sponsors and practitioners achieve operational compliance by identifying changes in qualification requirements.

Effective in 2022
 

Use of an Electronic Medium to Make Participant Elections and Spousal Consents. The proposed regulation (87 Fed. Reg. 80501) provides an alternative to in-person witnessing of spousal consents required to be witnessed by a notary public or a plan representative and clarifies that certain special rules for the use of an electronic medium for participant elections also apply to spousal consents. 

Guidance Relating to Certain Required Minimum Distributions (RMDs) for 2021 and 2022. Notice 2022-53 announces that final regulations relating to RMDs will not apply earlier than Jan. 1, 2023, and provides guidance relating to certain specified RMDs that would have been due in 2021 and 2022 under the interpretation in proposed regulations. 

Extension of Plan Amendment Deadlines Relating to Section 2202 of the CARES Act and Section 302 of the Taxpayer Certainty and Disaster Tax Relief Act of 2020.  Under Notice 2022-45, the extended amendment deadline applicable to a qualified retirement plan or 403(b) plan that is not a governmental plan is Dec. 31, 2025. Later deadlines apply concerning governmental retirement plans (including governmental 457(b) plans). 

Extension of Plan Amendment Deadlines Relating to the SECURE Act, Section 104 of the Bipartisan American Miners Act of 2019 (Miners Act), and Section 2203 of the CARES Act. Notice 2022-33 extends the deadlines for amending an eligible retirement plan to reflect certain provisions of the SECURE Act and Section 104 of the Miners Act by modifying Section G and Q&A-2, Q&A-3, and Q&A-13 of Notice 2020-86. It also extends the deadline for amending a retirement plan to reflect the provisions of Section 2203 of the CARES Act. Also under this notice, the extended amendment deadline for a qualified retirement plan or 403(b) plan that is not a governmental plan is Dec. 31, 2025. Later deadlines apply regarding governmental retirement plans (including governmental 457(b) plans).

Extension of Temporary Relief from the Physical Presence Requirement for Spousal Consents Under Qualified Retirement Plans. Notice 2022-27 extends, from July 1, 2022, through Dec. 31, 2022, the temporary relief from the physical presence requirement in Treasury Reg. §1.401(a)-21(d)(6) for participant elections required to be witnessed by a plan representative or a notary public, including a spousal consent required under Internal Revenue Code Section 417, provided certain requirements are satisfied. 

Proposed Regulations Relating to Certain Multiple Employer Plans (MEPs). The proposed regulations in 87 Fed. Reg. 17225 provide an exception, if certain requirements are met, to the application of the “unified plan rule” for MEPs described in Internal Revenue Code Section 413(e) if one or more employers participating in the plan fail to take actions required of them to satisfy the applicable requirements of the Code. 

Proposed Regulations Relating to RMDs. The proposed regulations under Internal Revenue Code Section 401(a)(9) provide guidance related to Sections 114 and 401 of the SECURE Act, which respectively increased the mandatory age by which distributions from a retirement plan are required to begin from 70½ to 72, and limits the ability of designated beneficiaries to take distributions over their life expectancies unless they meet certain exceptions. 

Guidance Relating to Special Financial Assistance from the Pension Benefit Guaranty Corporation to Certain Multiemployer Defined Benefit Plans. Notice 2021-38 provides guidance under Internal Revenue Code Section 432(k) to sponsors of multiemployer pension plans that are required to reinstate certain previously suspended benefits as a condition of receiving special financial assistance from the PBGC under Section 9704 of the American Rescue Plan Act of 2021 (ARP). 

Special Financial Assistance Program for Financially Troubled Multiemployer Plans. Section 9704 of the ARP provides that the sponsor of an eligible multiemployer plan, as defined in Section 4262(b) of ERISA, may apply to the PBGC to receive special financial assistance, provided certain conditions are satisfied. 

Extension of Temporary Relief from the Physical Presence Requirement for Spousal Consents Under Qualified Retirement Plans. Notice 2021-40 extends, from July 1, 2021, through June 30, 2022, the temporary relief for participant elections required to be witnessed by a plan representative or a notary public, including a spousal consent required under Internal Revenue Code Section 417, provided certain requirements are satisfied. 

Final Regulations Relating to Updated Life Expectancy and Distribution Period Tables Used for Purposes of Determining RMDs. Regulations (85 Fed. Reg. 72472) provide guidance relating to the life expectancy and distribution period tables that are used to calculate RMDs from qualified retirement plans and 403(b) plans.