SECTION 2. BACKGROUND

.01 Qualified individually designed plans .

(1) Section 401(b) of the Internal Revenue Code (Code) provides a remedial amendment period ⁴ during which a plan may be amended retroactively to comply with the Code’s qualification requirements. Treas. Reg. § 1.401(b)-1 describes the disqualifying provisions that may be amended retroactively and the remedial amendment period during which retroactive amendments may be adopted. The regulations also grant the Commissioner of Internal Revenue (Commissioner) the discretion to designate certain plan provisions as disqualifying provisions and to extend the remedial amendment period.

(2) Section 7805(b)(8) provides that the Secretary may prescribe the extent, if any, to which any ruling (including any judicial decision or any administrative determination other than by regulation) relating to the internal revenue laws shall be applied without retroactive effect.

(3) Section 1.401(b)-1 provides that a plan that fails to satisfy the requirements of section 401(a) solely as a result of a disqualifying provision defined under § 1.401(b)‑1(b) need not be amended to comply with those requirements until the last day of the remedial amendment period with respect to the disqualifying provision, provided the amendment is made

retroactively effective to the beginning of the remedial amendment period. Under § 1.401(b)-1(b)(1), a disqualifying provision includes a provision of a new plan, the absence of a provision from a new plan, or an amendment to an existing plan that causes the plan to fail to satisfy the requirements of the Code applicable to the qualification of the plan as of the date the plan or amendment is first made effective. Under § 1.401(b)-1(b)(3), a disqualifying provision includes a plan provision designated, at the Commissioner’s discretion, as a disqualifying provision that either (a) results in the failure of the plan to satisfy the qualification requirements of the Code by reason of a change in those requirements, or (b) is integral to a qualification requirement of the Code that has been changed. For this purpose, § 1.401(b)-1(c) (1) provides that a disqualifying provision includes the absence from a plan of a provision required by or, if applicable, integral to the applicable change in the qualification requirements of the Code, if the plan was in effect on the date the change in those requirements became effective with respect to the plan. Under § 1.401(b)-1(c) (3), the Commissioner may impose limits and provide additional rules regarding the amendments that may be made during the remedial amendment period with respect to disqualifying provisions described in § 1.401(b)-1(b)(3).

(4) For a disqualifying provision of a new plan described in § 1.401(b)-1(b)(1), the remedial amendment period begins on the date the plan is put into effect and, in the case of a plan maintained by one employer, ends on the later of (a) the due date (including extensions) for filing the employer’s tax return for the taxable year in which the plan is put into effect or (b) the last day of the plan year in which the plan is put into effect. In the case of a new plan maintained by more than one employer, the remedial amendment period ends on the last day of the tenth month following the last day of the plan year that includes the date the plan is put into effect.

(5) For a disqualifying provision that is an amendment to an existing plan described in § 1.401(b)-1(b)(1), the remedial amendment period begins on the earlier of the date the plan amendment is adopted or put into effect and, in the case of a plan maintained by one employer, ends on the later of (a) the due date (including extensions) for filing the employer’s tax return for the taxable year in which the amendment is adopted or effective (whichever is later) or (b) the last day of the plan year in which the amendment is adopted or effective (whichever is later). In the case of an amendment to an existing plan maintained by more than one employer, the remedial amendment period ends on the last day of the tenth month following the last day of the plan year in which the amendment is adopted or effective (whichever is later).

(6) For a disqualifying provision described in § 1.401(b)-1(b)(3), the remedial amendment period begins on the date on which the change becomes effective with respect to the plan or, in the case of a provision that is integral to a qualification requirement that has been changed, unless another time is specified by the Commissioner in revenue rulings, notices, and other guidance published in the IRB, the first day on which the plan is operated in accordance with the provision as amended. In the case of a plan maintained by one employer, the remedial amendment period for a disqualifying provision described in § 1.401(b)-1(b)(3) ends on the later of: (a) the due date (including extensions) for filing the income tax return for the employer’s taxable year that includes the date on which the remedial amendment period begins; or (b) the last day of the plan year that includes the date on which the remedial amendment period begins. In the case of a plan maintained by more than one employer the remedial amendment period ends on the last day of the tenth month following the last day of the plan year in which the remedial amendment period begins.

3 This revenue procedure also does not address section 403(b) pre-approved plans. The Treasury Department and the IRS anticipate updating the provisions of Rev. Proc. 2019-39 relating to section 403(b) pre-approved plans in the future guidance that will update the provisions of Rev. Proc. 2016-37 relating to qualified pre-approved plans.

4 This revenue procedure includes certain defined, capitalized terms, such as Disqualifying Provision and Form Defect. On occasion, these same words were used in prior guidance without capitalization or with a somewhat different meaning. If this revenue procedure refers to words used in prior guidance under these conditions, those words are not capitalized.

November 21, 2022 488 Bulletin No. 2022–47

(7) Section 1.401(b)-1(f) provides that the Commissioner has discretion to extend the remedial amendment period.

(8) Rev. Proc. 2016-37 provides that, effective January 1, 2017, a sponsor of a qualified individually designed plan is permitted to submit a determination letter application only for initial plan qualification, for qualification upon plan termination, and in certain other circumstances, as set forth in guidance published in the IRB. Rev. Proc. 2016-37 also provides an extended remedial amendment period under section 401(b) for qualified individually designed plans and a system of cyclical remedial amendment periods under section 401(b) for qualified pre-approved plans.

(9) Rev. Proc. 2019-20 provides for a permanent, limited expansion of the determination letter program with respect to qualified individually designed plans. As part of this limited expansion, the IRS accepts determination letter applications for certain qualified individually designed merged plans on an ongoing basis.

(10) Rev. Proc. 2022-4, 2022-1 IRB 161, sets forth the types of advice provided by the Commissioner, Tax Exempt and Government Entities Division, Employee Plans Rulings and Agreements Office, and the procedures for requesting such advice, including procedures for issuing determination letters (a) on the qualified status of pension, profit-sharing, stock bonus, annuity, and employee stock ownership plans under sections 401, 403(a), 409, and 4975(e)(7), and (b) except with respect to an adopting employer of a pre-approved plan requesting a determination letter under section 12 of Rev. Proc. 2022-4, on the status for exemption of any related trusts or custodial accounts under section 501(a). 02 Section 403(b) individually designed plans . Rev. Proc. 2019-39 sets forth a system of recurring remedial amendment periods for correcting form defects, first occurring after June 30, 2020, in section 403(b) plans. Rev. Proc. 2019-39 defines a

form defect as (1) a provision that causes a plan to fail to satisfy the section 403(b) requirements, (2) the absence of a provision that causes a plan to fail to satisfy the section 403(b) requirements, (3) a provision that is integral to a section 403(b) requirement that has been changed (either by statute, or in regulations or other guidance published in the IRB), or (4) the absence from a plan of a provision required by a change to the section 403(b) requirements (either by statute, or in regulations or other guidance published in the IRB) or integral to the change. Rev. Proc. 201939 also sets forth the plan amendment deadlines for correcting form defects and for adopting discretionary amendments to section 403(b) individually designed plans. Section 7 of Rev. Proc. 2019-39 sets forth a limited extension of the initial remedial amendment period for section 403(b) individually designed plans.