IRS Issues 2022 Cumulative List of Changes for §403(b) Plans

On January 28, 2022, the IRS released Notice 2022-8, which sets forth the 2022 Cumulative List of Changes for § 403(b) Pre-approved Plans (2022 Cumulative List). The 2022 Cumulative List is designed to assist § 403(b) pre-approved plan providers applying to the IRS for opinion letters for the second remedial amendment cycle (Cycle 2) under the IRS 403(b) pre-approved plan program.

In Rev. Proc. 2021-37, the IRS outlined the procedures for issuing opinion letters for section 403(b) pre-approved plans for Cycle 2. The 2022 Cumulative List reflects requirements that the IRS will consider when reviewing a plan document submitted for Cycle 2. The Cycle 2 submission period begins on May 2, 2022, and ends on May 1, 2023. Notice 2022-8 does not extend the deadline by which a § 403(b) pre-approved plan must be amended to comply with any change in the requirements.

The 2022 Cumulative List identifies items that were enacted or issued after October 1, 2012. (The § 403(b) requirements reviewed during Cycle 1 included the final regulations under § 403(b) and any applicable requirements of the 2012 Cumulative List of Changes.) But if a plan was not reviewed during Cycle 1, the IRS will review the plan taking into account items on the 2022 Cumulative List, as well as the § 403(b) requirements reviewed during Cycle 1.

The 2022 Cumulative List includes, amongst other items:

• Changes with respect to safe harbor plans, including permitted midyear suspensions of contributions under certain circumstances, elimination of certain notice requirements and an increase in the 10% cap for automatic enrollment safe harbor plans.
• Amended definitions of qualified matching contributions and qualified nonelective contributions.
• Changes regarding in-plan Roth rollovers.
• Modifications to the hardship distribution rules, including expansion of the sources for distributions and removal of the six-month prohibition on contributions after a hardship distribution.
• An exception to the 10% additional tax for qualified birth or adoption distributions.
• Changes to required minimum distribution (RMD) provisions, including an increase in the RMD age from 70 ½ to 72 and new distribution rules for designated beneficiaries.
• Modification of the definition of “spouse” following federal recognition of same sex marriages.
• Changes resulting from numerous federal measures allowing certain participants impacted by the COVID-19 pandemic or natural disasters access to their retirement funds.

In addition to releasing the Cumulative List, the IRS intends to provide an Operational Compliance List periodically to notify plan sponsors and practitioners of changes in § 403(b) requirements that are effective during a calendar year. This list identifies matters that may involve either mandatory or discretionary plan amendments and guidance that affects daily plan operations. The current Operational Compliance list is available at Operational Compliance List | Internal Revenue Service.

Sponsors of § 403(b) retirement plans should be aware of the 2022 Cumulative List and the Operational Compliance List and work with their service providers to ensure their plan documents and operations are timely updated to reflect applicable plan changes and regulatory requirements.

2022 Cumulative List of Changes in Section 403(b) Requirements for Section 403(b) Pre-Approved Plans »