“I realize the deadline for adopting our restated 403(b) individually designed plan that reflects all changes in the Code and Regulations since 2010 is March 31, 2020. However, we are currently discussing a minor plan design change for 2020, but we don’t know if we will resolve to make the change prior to March 31. Assuming we make the design change after March 31, when is our deadline to amend the plan?”
Stacey Bradford, Kimberly Boberg, David Levine and David Powell, with Groom Law Group, and Michael A. Webb, vice president, Retirement Plan Services, Cammack Retirement Group, answer:
This is a timely question, as the IRS recently addressed this issue in Rev. Proc. 2019-39, which states the following:
.02 Plan amendment deadline for discretionary amendments. Except as otherwise provided by statute, or in regulations or other guidance published in the Internal Revenue Bulletin, effective for plan years beginning on or after January 1, 2020, for a discretionary amendment (that is, an amendment that is not made with respect to a Form Defect) made to a § 403(b) Individually Designed Plan, the plan amendment deadline is the date described in paragraph (1) or (2) of this section 6.02, as applicable.
Thus, if your 403(b) plan is NOT a governmental plan, the amendment deadline for your 2020 plan design change is the end of the plan year in which the design change was put into effect. If that date is in 2020 and your plan year is a calendar year, your amendment deadline would be December 31, 2020.
If your 403(b) plan is a governmental plan, the amendment deadline would be the LATER of a) December 31, 2020 for a calendar-year plan, or b) 90 days after the close of the second regular legislative session of the legislative body with the authority to amend the plan that begins on or after the date the plan amendment is operationally put into effect. So if the plan amendment is operationally put into effect on July 1, 2020, and 90 days after the close of the second regular legislative session that begins after that date is January 1, 2022, the amendment deadline would be January 1, 2022.
NOTE: This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.
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