IAnyone who is remotely familiar with employee benefits is aware of the fact that changes frequently occur to governing laws, regulations, and other guidance. One challenge for employers in this area is keeping their plan documents current, so they include all applicable changes’ provisions. Thus, retirement plan sponsors must carefully monitor changes that necessitate plan document amendments. Plan sponsors must also monitor IRS and Department of Labor (“DOL”) deadlines for executing such amendments, which often occur years after a change becomes effective. In addition, plan sponsors must ensure that their plans’ operations comply with those changes as of their effective dates.
In this connection, per IRS Revenue Procedure 2016-37, the IRS publishes an annual list of law changes affecting tax-qualified retirement plans. The IRS calls that annual guidance its Operational Compliance List (the “List”), and each year’s List identifies changes in retirement plan qualification requirements that are effective during an applicable calendar year. On March 26, 2019, the IRS published the latest version of the List. For defined contributions plans such as 401(k) plans and 403(b) plans, the item of most interest will be the following:
The List also includes changes that became effective in 2018 (e.g., using forfeitures to fund qualified nonelective contributions and qualified matching contributions), in 2017 (e.g., relief for plans in geographic areas affected by certain hurricanes), and in 2016 (e.g., guidance permitting certain mid-year changes to safe harbor 401(k) plans).
The IRS states that the 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.” The IRS also reminds us that in order to be a qualified plan, the plan’s operations must comply with all applicable qualification requirements, even if any such requirement is not included on a List for any year. Also note that the List does not include periodic changes that routinely occur (e.g., cost-of-living increases). Finally, it is important to know that each year’s List is available on the IRS’s website only, as it is not published in the Internal Revenue Bulletin.
Here is a link to the current List: https://www.irs.gov/retirement-plans/operational-compliance-list