Nearly a year to the day after IRS modified the timing rules for discretionary amendments to preapproved retirement plans, the agency is further tweaking the rules for qualified plan interim amendments. Rev. Proc. 2021-38 simplifies the deadline for adopting interim amendments to reflect statutory or regulatory changes in plan qualification requirements. The new guidance sets the deadline as the end of the second calendar year after the calendar year in which the change in qualification requirements took effect.

Under previous guidance (Rev. Proc. 2016-37), plans had to make these amendments by the end of the remedial amendment period, which depended in part on the employer’s taxable year. The deadline change removes the reference to the employer’s taxable year and so eliminates the need for special provisions for tax-exempt employers.

Although Rev. Proc. 2021-38 applies only to plans qualified under Internal Revenue Code Section 401(a), Rev. Proc. 2021-37, issued on the same day, similarly modifies the timing rules for interim amendments to preapproved 403(b) plans. Substantive changes in that procedure more closely align the 403(b) preapproved plan program with the one for 401(a) qualified plans.

The change applies for amendments related to qualification changes first effective after Dec. 31, 2020.

Related resources

Non-Mercer resources

• Rev. Proc. 2021-38 (IRS, Sept. 1, 2021)
• Rev. Proc. 2021-37 (IRS, Sept. 1, 2021)
• Rev. Proc. 2020-40 (IRS, Sept. 2, 2020)
• Rev. Proc. 2016-37 (IRS, June 29, 2016)

Mercer Law & Policy resources

• IRS tweaks amendment timing rules for preapproved plans (Sept. 24, 2020)