IRS Updates Operational Compliance List of Changes in Qualification and Section 403(b) Requirements

On February 6, 2023, the IRS released an Operational Compliance List (OC List) to help plan sponsors and practitioners achieve operational compliance by identifying changes in qualification and Code Section 403(b) requirements effective during a calendar year. The OC List was posted pursuant to IRS Revenue Procedure 2022-40, which was issued on November 7, 2022, and allows 403(b) retirement plans to use the same individually designed retirement plan determination letter program currently used by qualified retirement plans. Please see our December 8, 2022, article for further information on IRS Revenue Procedure 2022-40.

The OC list is available on the IRS website and identifies matters that may involve either mandatory or discretionary plan amendments or significant guidance that affects daily plan operations. The IRS updates the OC List periodically to reflect new legislation and IRS guidance.

Examples of items updated in 2023 include, but are not limited to:

• Proposed regulations to allow the use of an electronic medium to make participant elections and spousal consents, which was discussed in our January 5, 2023, article.
• Guidance relating to certain required minimum distributions (RMDs) for 2021 and 2022 under Notice 2022-53, which provided clarification and transitional relief regarding changes to RMDs under the SECURE Act of 2019. Please see our October 27, 2022, article.
• Extensions of plan amendment deadlines relating to the CARES Act and Relief Act provisions that provide special tax treatment with respect to a COVID-19-related distribution or a qualified disaster distribution, respectively. Please see our October 13, 2022, article.
• Extension of plan amendment deadlines relating to the SECURE Act of 2019 and certain provisions of the Miners Act and Cares Act to December 31, 2025, under Notice 2022-33; please see our August 18, 2022, article.

However, the OC List is not intended to be a comprehensive list of every item of IRS guidance or new legislation for a year that could affect a particular plan. I.e., a plan must comply operationally with each relevant IRS requirement, even if the requirement is not included on the OC List. Additionally, a plan must be operated in compliance with a change in requirements from the effective date of the change.

Sponsors of qualified and 403(b) retirement plans may want to review the OC List and should consult with their advisors for further information.

Operational Compliance List »