Employee Benefits-IRS Issues 2016 Required Amendments List for Qualified Retirement Plans

This helps: IRS says (with a very limited exception) “No Amendments Required”!  The details follow.

The Internal Revenue Service (the “IRS”) has issued Notice 2016-80, which contains the Required Amendments List for 2016 (“2016 RA List”).  The major points:

Final Day of Remedial Amendment Period.  The Notice reminds us that, in the case of an individually designed qualified retirement plan, the remedial amendment period for a disqualifying provision arising as a result of a change in qualification requirements generally is extended to the end of the second calendar year that begins after the issuance of the Required Amendments List (RA List) in which the change in qualification requirements appears.  As such, the Notice provides that December 31, 2018 is the last day of the remedial amendment period-and is the deadline for adopting the amendment- with respect to a disqualifying provision arising as a result of a change in qualification requirements that appears on this 2016 RA List.

Content and Organization of the 2016 RA List.  In general, according to the Notice, an RA List includes statutory and administrative changes in qualification requirements (for qualified retirement plans) that are first effective during the plan year in which the list is published.  However, an RA List does not include guidance issued or legislation enacted after the list has been prepared, and also does not include:

  • statutory changes in qualification requirements for which the Treasury Department and the IRS expect to issue guidance (which would be included on an RA List issued in a future year);
  • changes in qualification requirements that permit (but do not require) optional plan provisions; or
  • changes in the tax laws affecting qualified plans that do not change the qualification requirements under section 401(a) of the Code.

The RA List is divided into two parts.  Part A covers changes in qualification requirements that generally would require an amendment to most plans or to most plans of the type affected by the change.  Part B includes changes in qualification requirements that the Treasury Department and the IRS anticipate will not require amendments in most plans, but might require an amendment because of an unusual plan provision in a particular plan.  In the Notice, however, Part A of the 2016 RA List does not include any changes or required amendments, and Part B includes only a change that applies to restrictions under Code Section 436 on accelerated distributions from underfunded single-employer plans, which are collectively bargained, and which are involved in an employer bankruptcy.

The Bottom Line.  Except for the one very limited change included in Part B, there are NO amendments to be concerned with for this year.  The Notice does leave us with some guidance on how the RA List generally works.