Pension & Benefits News IRS extends for deadlines for 403(b) and defined benefit plans
News
Friday, April 17, 2020

IRS extends for deadlines for 403(b) and defined benefit plans

By Pension and Benefits Editorial Staff

The IRS is extending the initial remedial amendment period for certain 403(b) plans and the second six-year remedial amendment cycle for certain defined benefit plans.

403(b) plans. The IRS is extending the last day of the initial remedial amendment period for 403(b) plans from March 31, 2020, to June 30, 2020. Plan sponsors now have until June 30, 2020, to update their pre-approved and individually designed 403(b) plan documents.

The IRS intends to issue guidance to modify Rev. Proc. 2019-39 to replace applicable references to March 31, 2020, with June 30, 2020. Rev. Proc. 2019-39 provides a system of recurring remedial amendment periods for correcting form defects for both individually designed and pre-approved 403(b) plans. For example, the rules for the recurring remedial amendment periods for 403(b) individually designed plans now will apply to form defects first occurring after June 30, 2020, and the second cycle for 403(b) pre-approved plans will begin on July 1, 2020.

Defined benefit plans. The IRS is extending the following deadlines for the second six-year remedial amendment cycle to July 31, 2020:

  1. the April 30, 2020, deadline for employers to adopt a pre-approved defined benefit plan and to submit a determination letter application (if eligible) under the second six-year remedial amendment cycle, and
  2. the April 30, 2020, end of the second six-year remedial amendment cycle for pre-approved defined benefit plans, as set forth in IRS Announcement 2018-05

An employer that adopts, by July 31, 2020, a pre-approved defined benefit plan that was approved based on the 2012 Cumulative List will be considered to have timely adopted the plan within the second six-year remedial amendment cycle. The remedial amendment period for disqualifying provisions described in section 15.03 of Rev. Proc. 2016-37 is also extended to the end of the second six-year remedial amendment cycle.

Third six-year remedial amendment cycle. The IRS states that the third six-year remedial amendment cycle for pre-approved defined benefit plans now will begin on August 1, 2020 (and will still end on January 31, 2025). The on-cycle submission period for pre-approved defined benefit plan providers to submit opinion letter applications for the third six-year remedial amendment cycle will still begin on August 1, 2020, and end on July 31, 2021.

According to the IRS, the extensions to the second six-year remedial amendment cycle and the delayed beginning date for the third six-year remedial amendment cycle for pre-approved defined benefit plans will be reflected in future guidance.

Source: IRS Website, March 27, 2020.

Back to Top

Interested in submitting an article?

Submit your information to us today!

Learn More