The Internal Revenue Service ("IRS") issued the 2020 Required Amendments List under IRS Notice 2020-83 on November 20, 2020. The IRS publishes an annual Required Amendments List, which generally applies to changes in requirements that become effective on or after January 1 of that year. The Required Amendments List applies to both individually designed plans qualified under Internal Revenue Code ("Code") § 401(a) and individually designed plans that satisfy the requirements of Code § 403(b).
Difficulty of Care Payments
The 2020 Required Amendments List addresses the difficulty of care payments treated as compensation for retirement contribution limits as provided for in the Setting Every Community Up for Retirement Enhancement Act ("SECURE Act"), which became law on December 20, 2019. For employers who offer difficulty of care payments, the SECURE Act amends Code § 415(c) to include difficulty of care payments as defined in Code § 131(c). In effect, this allows the Code § 415(c)(1) compensation of a participant to be increased by the amount of the difficulty of care payments. Governmental plans of employers who have provided for such payments during plan years beginning after December 31, 2015, and before January 1, 2021, must be amended by the last day of the first plan year beginning on or after January 1, 2024. If in future years an employer begins difficulty of care payments to employees, the plan must be amended to include such payments in the definition of Code § 415(c)(1) compensation by the end of the second calendar year following the calendar year in which the employer begins such payments. A plan is not required to be amended to include such payments in the definition of Code § 415(c)(1) compensation if an employer does not make such payments to employees eligible to participate in the plan. For more information regarding the difficulty of care payments treated as compensation for retirement contribution limits, please refer to our e-alert dated December 27, 2019 entitled "SECURE Act Becomes Law."
Ice Miller's Comply Now Program
We previously published an e-alert dated August 10, 2017 entitled "Introducing Ice Miller's Qualified Plan Comply Now Program," which addressed how Ice Miller can assist you with keeping your plan documents in compliance with the IRS' ongoing changes in qualification requirements in light of the IRS' near termination of its determination letter program.
To discuss the impact of the 2020 Required Amendments List on your plan documents or for more information about Comply Now, please contact Audra Ferguson-Allen, Robert L. Gauss, Tara S. Sciscoe, Christopher Sears, Lisa E. Harrison, Lindsey Knowles or the Ice Miller Employee Benefits attorney with whom you most closely work. Please contact our COVID-19 Task Force if you have any questions about managing the risks of the coronavirus pandemic. Also see our Coronavirus (COVID-19) Resource Center for additional resources, which is updated daily.
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