IRS Releases 2019 List of Required Amendments for Qualified Retirement Plans, Including 401(k) Plans

On December 4, 2019, the IRS released Notice 2019-64, its annual list of required amendments (“RA List”)for individually designed qualified retirement plans, including 401(k) plans. Demonstrating how little has been happening in the 401(k) world recently, this year the RA List includes only one qualification change applicable to 401(k) plans – amendments required to be made in response to the final regulations that were issued on September 23, 2019 regarding hardship distributions. See our previous blog for a recap.

RA Lists are issued at the end of each calendar year to identify changes in the Internal Revenue Code’s qualification requirements that may require a remedial amendment to be made to a 401(k) plan to avoid potential plan disqualification.

OBSERVATION: Believe it or not, this is the first RA List in four years to identify any changes relating directly to 401(k) plans! In past years, 401(k) plans often have had several major changes that have required amendments to be made, often on an expeditious basis, to ensure continued qualification of these plans.

Amendments Required to Reflect Final Hardship Distribution Regulations.  According to the 2019 RA List, a 401(k) plan will need to be amended to comply with the final hardship distribution regulations if the plan permits hardship regulations and it also:

  • Provides for the temporary suspension of making future 401(k) elective deferrals or employee contributions as a condition for obtaining any hardship distribution that consists of elective deferrals or employee contributions; and/or
  • Does not require that the employee/plan participant represent to the plan administrator that he or she has insufficient cash or other liquid assets reasonably available to satisfy the financial need.

See our previous blog for details on the changes made by the final regulations in connection with the above requirements.

IMPORTANT NOTE!  If the above conditions apply to a 401(k) plan, then continued qualification of the plan will be contingent upon the timely adoption (see below) of plan amendments that meet all relevant legal requirements. Be sure to consult your individual ERISA attorney or advisor if you are unsure as to whether or not your plan may need to be amended.

Timing – Effective Date. Required hardship distribution amendments generally must be made effective with respect to hardship distributions made on or after January 1, 2020.

That said, under the final regulations, plan sponsors are given the choice to: (i) apply the new rules to hardship distributions that occur in plan years beginning after 2018; and/or to (ii) eliminate suspension of contributions from the operation of the plan as of the first day of the first plan year beginning after 2018 (even if the hardship distribution occurred prior to that date).

Importantly, if a plan sponsor chooses to apply the final regulations earlier than January 1, 2020, in either of the above situations, then the effective date of the plan amendment must be consistent with the actual effective date of the pertinent provision in actual plan operation.

Timing – Amendment Deadline. Generally, in the case of a qualified individually designed 401(k) plan, the remedial amendment period for a disqualifying provision arising as a result of a change in qualification requirements extends to the end of the second calendar year that begins after the issuance of the RA List on which the change in qualification requirements appears. Accordingly, since the hardship distribution changes appear on the 2019 RA List, the deadline for amending a 401(k) plan to reflect changes made by the final hardship distribution regulations is December 31, 2021.


The information and content contained in this blog post are for general informational purposes only, and does not, and is not intended to, constitute legal advice. As always, for specific questions regarding your 401(k) plan, including plan amendments and all other compliance issues, please consult your own ERISA attorney or advisor. 

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