United States: Time Is On Our Side: More Time To Amend For SECURE Act, Miners Act And CARES Act

Seyfarth Synopsis: On August 3, the IRS issued Notice 2022-33, extending the deadlines for amending retirement plans and individual retirement accounts ("IRAs") for changes under the (i) Setting Every Community Up For Retirement Enhancement Act of 2019 (the "SECURE Act"); (ii) Bipartisan American Miners Act of 2019 (the "Miners Act"); and (iii) Section 2203 of the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"), which waived required minimum distributions for 2020. For most plans, the extension provides retirement plan sponsors with an additional three years, until December 31, 2025, to amend plan documents to reflect changes under these Acts. Over the past several months, we had heard from IRS representatives and industry groups that this extension was likely forthcoming, as we wait for additional guidance on some lingering questions that remain.

It seems like ages ago, but the SECURE Act and the Miners Act were signed into law on December 20, 2019, just before the outbreak of COVID-19 and the resulting pandemic. As detailed in our prior Legal Update, available here, the SECURE Act and the Miners Act contain a number of amendments to the Internal Revenue Code of 1986, as amended (the "Code") and the Employee Retirement Income Security Act of 1974, as amended, that impact employer-sponsored retirement plans, including many important participant-facing changes.

After the SECURE Act's enactment, a number of open questions remained about some of the more important changes that could potentially have a significant impact on plan administration, including provisions relating to the participation and vesting of long-term part-time workers and changes to the required minimum distribution ("RMD") rules (e.g., elimination of the "stretch" IRA for most beneficiaries), and we anticipated the IRS would issue helpful guidance. That was pre-coronavirus. In the wake of the coronavirus pandemic beginning in early 2020, the CARES Act, enacted in March 2020, understandably took center stage, as legislators and plan sponsors focused on making it easier for participants to access retirement plan money from qualified plans.

Since 2020, the IRS has been hard at work issuing several pieces of guidance addressing a number of open questions relating to the SECURE Act, the Miners Act and the CARES Act, including Notices 2020-50, 2020-68 and 2020-86. Our prior Legal Updates and Blog Post discussing the Notices are available here, here, and here.

While many of our plan sponsor clients have already amended their retirement plans to reflect the loan and distribution relief under CARES Act, as well as the waiver of 2020 RMDs, many have pressed pause on amendments for certain changes under the SECURE Act, particularly the complex changes to the RMD rules. In February 2022, the IRS published proposed regulations for RMDs under Code Section 401(a)(9), and solicited comments. The proposed regulations are intended to reflect the changes made to the rules by the SECURE Act, and completely overhaul the current regulations. The proposed regulations do not, as we had hoped, include model "snap-on" amendments for retirement plans, as was provided in Revenue Procedures 2002-29 after the RMD regulations were last updated in 2001. Now that the IRS has extended the amendment deadlines, the hope is that in the interim, the IRS will issue more guidance that includes model amendments or sample language relating to the SECURE Act's RMD changes.

The extended amendment deadlines are highlighted in the table below. Note that Notice 2022-33 does not extend the amendment deadline for the optional loan and withdrawal relief provisions of the CARES Act, which are still currently due by December 31, 2022 (for calendar year plans).

Please contact your Seyfarth Employee Benefits Attorney with any questions you may have about this guidance and its application to your plan. Please also be sure to register for our Coffee Talk With Benefits Podcast here, where we discuss interesting issues that our clients are facing, as well as breaking employee benefits developments. The podcast drops the first week of every month, and we have some very interesting topics in the pipeline!

Amendment Deadlines Chart

*Note, the deadline for adopting the optional loan and withdrawal relief provisions under the CARES Act has NOT been extended. The deadline for those changes is generally December 31, 2022 (for calendar year plans).

**Special deadline may apply if notified by IRS that the plan was administered in a manner that is inconsistent with requirements of Code Section 457(b).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.