The IRS has issued its 2024 Required Amendments List (RA List) for individually designed qualified retirement plans, including 401(k) plans and 403(b) plans. These RA Lists are released annually to identify changes in the qualification requirements of the Internal Revenue Code. Such changes may result in "disqualifying provisions" that necessitate a remedial amendment.

What Are Disqualifying Provisions?

Disqualifying provisions can be:

• A required provision that is missing from the plan document.

• A provision that does not meet the qualification requirements of the Code.

• A provision specifically designated by the IRS.

Amendments to eligible retirement plans made by the deadline established under the RA List will not violate applicable anti-cutback requirements.

Breakdown of the 2024 RA List

The 2024 RA List is divided into three parts:

1. Part A: Changes requiring amendments for most plans of the relevant type.

2. Part B: Changes impacting plans with unusual provisions.

3. Part C: Changes related to optional plan provisions previously adopted.

Part A: No Changes

No changes have been included in Part A for 2024.

Part B: Targeted Updates

Two items are included in Part B:

1. Provisions related to rural electric cooperative retirement plans.

2. Family attribution rule changes introduced by the SECURE 2.0 Act.

Part C: Optional Provisions

Part C contains numerous optional provisions, with many applying to 401(k) plans. Key items include:

• In-Service Distributions: Coronavirus-related distributions.

• Required Minimum Distributions (RMDs): Includes waivers for 2020 RMDs, updates to the age for determining the required beginning date, and timing rule relief.

• Qualified Birth or Adoption Distributions: Requirement to repay such withdrawals within three years.

• Increased Deferral Percentage: Maximum safe harbor deferral percentage for Qualified Automatic Contribution Arrangements (QACAs) increased from 10% to 15%.

• SECURE 2.0 Act Changes: Financial incentives for contributions, SIMPLE 401(k) provisions, and allowing certain contributions to be designated as Roth contributions.

• Emergency Savings Accounts: Anti-abuse rules for pension-linked accounts.

• Penalty Exceptions: Relief for personal emergency expenses and domestic abuse victims from the 10% early distribution tax.

Additional Considerations

• Cost-of-Living Adjustments (COLAs): While periodic COLAs are not explicitly listed, they are treated as included. Most plans do not require amendments to reflect these adjustments.

• Discretionary Amendments: Must generally be adopted by the end of the plan year in which discretionary changes are implemented, except for certain amendments requiring earlier adoption (e.g., elective deferral and safe harbor provisions).

• Disaster Relief Amendments: These may need to be adopted before specific deadlines, depending on IRS guidance, even if not included in the RA List.

Key Takeaways for Plan Sponsors

Those responsible for sponsoring, administering, or advising plans with Part C optional provisions should:

• Review Guidance: Determine if updates or actions are needed.

• Monitor Deadlines: Ensure compliance with amendment deadlines for discretionary and disaster-related provisions.

The RA List does not address discretionary plan amendments unrelated to Code changes, so sponsors should ensure these are also up to date.

EBIA Comment

Employers should keep in mind that discretionary plan amendments must generally be adopted by the end of the plan year. In contrast, some discretionary amendments, such as those related to elective deferrals, safe harbor provisions, and anti-cutback rules, must be adopted before implementation. Employers offering disaster relief provisions may also need to amend their plans per disaster-specific IRS guidance, even if these amendments are not listed.

Final Notes

Staying compliant with the IRS's latest guidance is essential for retirement plan sponsors and administrators. Regularly review and update your plans to align with changes in regulations, and consult with experts to ensure adherence to deadlines and guidelines.