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IRS 2018 Required Amendments List Indicates No Changes in Plan Qualification Requirements

On November 21, 2018, the IRS issued Notice 2018-91, the 2018 “Required Amendments List”. The Notice states that there are no changes in qualification requirements on the 2018 Required Amendments List. This means the IRS believes most qualified plans are not required to be amended in 2018 for law changes. However, year-end is still a good time for plan sponsors to review their plan terms and determine whether there are other reasons to make changes, such as discretionary changes.

Background

Generally, individually designed retirement plans qualified under Internal Revenue Code (“Code”) Section 401(a) have a period (the “remedial amendment period”) to be amended to comply with law changes. For the last several years, the IRS has issued a Required Amendments List that lists law changes that require amendment for the applicable year and provides the deadline to make those amendments.

The following annual, monthly, or other periodic changes are treated as included on the Required Amendments List for the year in which such changes are effective even though they are not directly referenced on that list:

  1. Various dollar limits that are adjusted for cost of living increases as provided in Code Section 415(d) or other Code provisions.
  2. The spot segment rates used to determine the applicable interest rate under Code Section 417(e)(3).
  3. The applicable mortality table under Code Section 417(e)(3).

A year’s Required Amendments List does not include:

  • Guidance issued or legislation enacted after the date the list was prepared.
  • Statutory changes in qualification requirements for which the Treasury Department and IRS expect to issue future guidance (these may be included on a Required Amendments List for a future year).
  • Changes in qualification requirements that permit (but do not require) optional plan provisions (i.e., discretionary changes).
  • Changes in the tax laws affecting qualified plans that do not change the qualification requirements under Tax Code Section 401(a) (such as changes to tax treatment of plan distributions or changes to the funding requirements for qualified plans).

Notice 2018-91, the 2018 Required Amendments List

Notice 2018-91 indicates that there are no entries for the 2018 Required Amendments List. The Notice does state that the annual, monthly, or other periodic changes referenced in 1-3 above still apply, but the Treasury Department and the IRS anticipate that few plans have language that will need to be amended on account of these changes.

Even though it appears most qualified plans will not require amendment for law changes in 2018, plan sponsors should consider reviewing the plan documents and design on a regular basis. Year-end may be a convenient time to do so.

DISCLAIMER: The information provided is for general informational purposes only. This post is not updated to account for changes in the law and should not be considered tax or legal advice. This article is not intended to create an attorney-client relationship. You should consult with legal and/or financial advisors for legal and tax advice tailored to your specific circumstances.

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