Secure 2.0 section 316 and IRC 412(d)

Section 316 of Secure 2.0 seems to allow the adoption of discretionary amendments improving accrued benefits up until the tax filing due date including extensions. IRC 412(d) seems to only allow reflection of such an amendment in funding if adopted within 2.5 months after the close of the year. Do we think that these new amendments adopted after 2.5 months but before the date indicated in secure 2.0 will fall in the same camp as 1.404(11)(g) amendments adopted after 2.5 months? Does this now trisect the window for retroactive plan amendments in terms of their effect for defined benefit plans?. The secure 2.0 provision is not effective until 2024 years so we have time to digest this...

IRC 401(b)(3), as added by SECURE 2.0 sec. 316, says that for an amendment meeting the requirements, "the employer may elect to treat such amendment as having been  adopted as of the last day of the plan year in which the amendment is effective."

I am reading this to mean that you treat it as if it were actually adopted on the last day of the plan year. So there would be no need to worry about 1.401(a)(4)-11(g) or 1.401(a)(26)-7(c) issues, since those only apply to amendments adopted after the end of the year.

If the plan's valuation date is the last day of the plan year, then the amendment would also be taken into account for minimum funding and maximum deduction purposes. If the plan's valuation date is not the last day of the plan year, then a 412(d)(2) election would be needed if you wanted to take the amendment into account.

Reminder that this is only my best guess at this point, we will have to wait and see what the IRS comes out with.

I agree with CBZ's initial interpretation, and hopefully future IRS guidance will confirm/clarify before this becomes effective.

If your interpretations are correct this would add alot of flexibility for eoy vals...you could increase benefits for 410(b),401(a)(26) and 401(a)(4) as needed and raise the 404 limit if beneficial...

curious if there is any additional development on this subject.  In particular, I am asking if it is OK to improve the benefit/Pay Credit for the Owner after December 31, 2024 and reflect the increased benefit in 12/31/2024 valuation for 404 purposes.