On November 8, 2023, the IRS released Notice 2023-79, its annual list of required amendments (“RA List”) for individually designed qualified retirement plans, including 401(k) plans. In good news for plan administrators, the RA List contains no provisions requiring amendments to 401(k) plans.
Background – RA Lists:
- To assist individually designed qualified retirement plan sponsors with keeping their plan documents up-to-date, the IRS issues RA Lists at the end of each calendar year to identify changes in the qualification requirements that might require a “remedial” plan amendment to be made. If such amendments are not timely made, a plan could potentially be subject to disqualification or other sanctions.
- The RA List is divided into two parts – Part A covers changes in qualification requirements that generally would require an amendment to most plans that are affected by the change; Part B covers changes in qualification requirements that mightrequire a plan amendment because of an unusual provision in a particular plan.
RA Lists generally do not include guidance issued or legislation enacted after the list has been prepared. Further, the lists do not include:
- Statutory changes in requirements for which the IRS expects to issue guidance at a future time (which would be included on an RA List issued in a future year);
- Changes in legal requirements that permit, but do not require, optional plan provisions, as contrasted with changes in legal requirements that cause existing plan provisions to become “disqualifying provisions;” or
- Changes in the tax laws that, although they may affect qualified individually designed plans (for example, the taxation of distributions), they do not change the actual plan qualification requirements themselves.
The 2023 RA List:
As previously stated, the 2022 RA List contains no changes in the qualification requirements requiring plan amendments to qualified retirement plans, including 401(k) plans.
CAUTION: Other Plan Amendments May Still Be Required!
Although the 2023 RA List does not identify any required amendments for 401(k) plans, employers may still need to amend their plans for other reasons. For example, RA Lists do not take into account any discretionary plan amendments that a 401(k) plan sponsor may wish to make – for example, amendments modifying the plan’s entry date requirements, changing the vesting schedule, or adding a new distribution option. Such non-required amendments generally must be adopted by the end of the plan year in which the desired plan changes become effective.
NOTE: This article is intended as a general overview of Notice 2023-79 as it affects 401(k) plans and is not meant to address the details of plan qualification, plan amendments generally, other types of retirement plans (such as defined benefit plans or 403(b) plans), or previous or related IRS or other official guidance. As always, be sure to consult with your own ERISA attorney or other professional advisor for individualized advice with respect to your plan’s unique situation.