Remedial amendment period for section 403(b) plan correcting amendments

IRS releases Rev. Proc. 2017-18

The IRS today released an advance version of Rev. Proc. 2017-18 announcing that the last day of the remedial amendment period for section 403(b) plans—for purposes of what had been a “reserved” timing provision of Rev. Proc. 2013-22—is March 31, 2020.

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Read Rev. Proc. 2017-18 [PDF 16 KB]

Summary

Rev. Proc. 2013-22 was issued in March 2013 to provide guidelines for issuing opinion and advisory letters for section 403(b) prototype plans and volume submitter plans. The 2013 guidance included information about a remedial amendment period afforded to eligible employers to “retroactively correct” defects in the form of written section 403(b) plans. A “defect” was defined as a provision (or the absence of a required provision) that causes the plan to fail to satisfy the requirements of section 403(b).

Specifically, a provision of Rev. Proc. 2013-22 stated that any defect must be corrected on or before the last day of the remedial amendment period; however, that date was not provided in the 2013 revenue procedure. Instead, the 2013 guidance included a statement that the IRS would subsequently announce what date would be the last day of the remedial amendment period for all eligible employers.

With today’s release of Rev. Proc. 2017-18, the IRS has announced that for these purposes, the last day of the remedial amendment period is March 31, 2020. Thus, if a plan has not satisfied the requirements of section 403(b) in form during the remedial amendment period but is amended by March 31, 2020, to satisfy those requirements, the plan will be considered to have satisfied those requirements for the entire remedial amendment period.    

Rev. Proc. 2017-18 also states that the IRS and Treasury Department intend to issue future guidance with respect to the timing of section 403(b) plan amendments made after March 31, 2020.

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