The IRS Extends Looming Restatement Deadlines
The IRS announced on March 27th via its website the extension of the initial remedial amendment period for Section 403(b) plans from March 31, 2020, to June 30, 2020. It also extended the deadline for the second six-year remedial amendment cycle for pre-approved defined benefit plans from April 30, 2020, to July 31, 2020.
Revenue Procedure 2019-39 includes a system of recurring remedial amendment periods for both Individually Designed and Pre-approved 403(b) plans. The initial remedial amendment period began on the later of January 1, 2010, or the effective date of the plan and was to end as of March 31, 2020. Cycle 2 for the 403(b) pre-approved plans was to begin April 1, 2020. This announcement extends the initial remedial amendment period end date to June 30, 2020, and the beginning date for Cycle 2 to July 1, 2020. The IRS states it will issue more guidance related to the extension.
Defined Benefit Plans
Announcement 2018-05 originally determined April 30, 2020, as the end of the second six-year remedial amendment cycle for defined benefit plan. The website announcement also extends this deadline from April 30, 2020, to July 31, 2020. The IRS states it will consider an employer who adopts a pre-approved defined benefit plan approved based on the 2012 Cumulative List by July 31, 2020, to have timely adopted a plan under the second six-year remedial amendment cycle as described in Revenue Procedure 2016-37.
This extension of the Defined Benefit Cycle 2 remedial amendment period delays the beginning date for the third six-year cycle remedial amendment cycle to August 1, 2020, but the end date remains the same, January 1, 2025. It does not change the beginning of the submission period for advisory opinion letter applications for the Cycle 3 remedial amendment period, which remains August 1, 2020, ending July 31, 2021.