As you may be aware, last year, the IRS provided an extension for many retirement plans to adopt amendments under SECURE 2.0. However, it’s important to note that this extension does not apply to 457(b) plans sponsored by tax-exempt entities. These plans must continue to follow the original timeline, which requires plan amendments to be adopted no later than the last day of the first plan year beginning on or after January 1, 2025. For calendar year plans, that means your amendment is due by December 31, 2025.
If you have made any of the following changes in operation to your plan, an amendment is necessary by year end:
- RMD Age – SECURE 2.0 changed the required beginning age for required minimum distributions (“RMD”) from 72 to 73 for anyone who attains age 72 after December 31, 2022. The required age will be increased again to age 75 for an individual who attains age 74 after December 31, 2032.
- Small Benefit Amount – SECURE 2.0 increased the maximum amount that a plan can allow to be taken as a small distribution from $5,000 to $7,000. This change is optional and effective January 1, 2024.
If you have questions on whether your plan needs to be amended or if you need assistance amending your plan, please reach out to any of our Employee Benefits attorneys.
