On December 5, 2017, the Internal Revenue Service (IRS) issued the 2017 required amendments list for tax-qualified retirement plans. As background, the IRS annually releases the required amendments list to identify changes to the tax-qualification rules that may require amendments to retirement plans. The required amendments list generally is divided into two categories: Part A covers changes that would require amendments to most plans or to most plans of the type affected by the particular change, and Part B covers changes that the IRS anticipates will not require amendments to most plans, but might require an amendment to a particular plan because of an unusual plan provision.

The 2017 required amendments list identifies several changes to the tax-qualification rules as follows:

Part A

  • To the extent applicable, cash balance/hybrid plans must be amended to comply with final regulations covering market rate of return and other requirements that first became applicable to such plans as of January 1, 2017.
  • An eligible cooperative plan or eligible charity plan that was not subject to the benefit restrictions of Internal Revenue Code (Code) Section 436 generally becomes subject to those restrictions for plan years beginning on or after January 1, 2017.

Part B

  • Defined benefit plans that permit bifurcated distributions such that the benefit is paid partly in the form of an annuity and partly as a single sum (or other accelerated form) must do so in a manner that complies with the Code Section 417(e) regulations. The 2016 final regulations provide methods for satisfying this requirement. These regulations generally apply to plans effective as of January 1, 2017, but taxpayers may elect to apply the regulations to an earlier period.

In general, amendments necessary to comply with these changes must be adopted by the last day of the second calendar year following the issuance of the list—that is, by December 31, 2019. However, earlier amendments may be desirable in some instances (for example, amendments adopted to comply with the bifurcated distribution rules before December 31, 2017 are eligible for relief from the Code Section 411(d)(6) anti-cutback rules).