August 2022 Compliance News Article

The Internal Revenue Service (IRS) extended the deadline for amending retirement plans and individual retirement arrangements (IRAs) for some of the retirement impacts provided in recent laws passed by Congress.

Impacted Changes

The extended deadlines apply to the following:

Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act) which includes (but is not limited to):
- Increase in age for required minimum distributions from age 70 ½ to age 72
- Coverage for long-term part-time employees in 401(k) plans
- Lifetime income disclosures
- Optional withdrawals for birth or adoption expenses
Bipartisan American Miners Act of 2019 (Miners Act)
- Optional in-service distributions at age 59 ½ for defined benefit and governmental 457(b) plans
Coronavirus Aid, Relief, and Economic Security Act (CARES Act) passed in 2020
- Optional waiver for defined contribution required minimum distributions due in 2020

Please note that the optional coronavirus-related distributions and expanded loan provisions passed within the CARES Act do not currently have an extended deadline.

New Deadline

Non-governmental qualified retirement plans or section 403(b) retirement plans, including collectively bargained plans, or IRAs have until December 31, 2025 to comply.

Qualified governmental plans as well as governmental section 403(b) retirement plans must be amended 90 days after the close of the third regular legislative session of the legislative body with the authority to amend the plan that begins after December 31, 2023.

Governmental section 457(b) plans may have a later deadline if notified by the IRS that the plan was administered inconsistent with Code section 457(b).

The subject matter in this communication is educational only and provided with the understanding that Principal^® is not rendering legal, accounting, investment or tax advice. You should consult with appropriate counsel, financial professionals or other advisors on all matters pertaining to legal, tax, investment or accounting obligations and requirements.

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