SECURE Act Amendments for 401(k)

A few questions questions regarding SECURE Act amendments:

1. My understanding is that 401(k) plan documents have until December 31, 2026 to be amended for any secured act provisions, even if operationally implemented earlier (e,g, Roth catch-up elections implemented in 2025). Is this correct?

2. Are plan amendments required for:

      a. The annual paper statement requirement of Secure 2.0 Sec 338 - my inclination is that you wouldn't have to unless there were something in the plan document that suggested something to the contrary.

      b. The disclosures for eligible unenrolled participants requirements of Secure 2.0 Sec. 320 - again,  my inclination is that you wouldn't have to unless there were something in the plan document that suggested something to the contrary.

Thanks!

Q1

Beyond whatever tax law might provide about remedial-amendment periods:

Nothing in SECURE 2019 or SECURE 2022 (or the IRS’s guidance about law other than ERISA’s title I) provides relief from ERISA’s commands that an employee-benefit plan “shall be established and maintained pursuant to a written instrument” and “specify the basis on which payments are made to and from the plan.” ERISA § 402(a)(1), 402(b)(4), 29 U.S.C. § 1102(a)(1), 1102(b)(4). Nothing in SECURE 2019 or SECURE 2022 excuses a fiduciary from her responsibility to administer an employee-benefit plan “in accordance with the documents and instruments governing the plan[.]” ERISA § 404(a)(1)(D), 29 U.S.C. § 1104(a)(1)(D).

One way some plan sponsors and plan administrators hope to follow those commands is to keep records of writings (including emails and other computer systems’ messages) by which the plan sponsor told its recordkeeper, third-party administrator, or other service provider which provisions to implement, or a service provider told its service recipient which provisions it treats as deemed adopted if the service recipient does not instruct otherwise. Some might argue that those writings, even if informal, are “written” and are “documents . . . governing the plan[.]”

I’m unaware of a court decision that supports or rejects such an interpretation.

About whether a deemed Roth-contribution election must be in “the” plan documents now or need not be until December 31, 2026, some might read the Treasury department’s recent rule to interpret § 401(k) and § 414(v)(7) as allowing a delay until December 31, 2026.

Even if that’s a fitting interpretation for tax law, the Secretary of the Treasury lacks authority regarding ERISA §§ 402-404. Some might argue that service instructions, if written, are “documents . . . governing the plan[.]”

Q2

About something that might be an ERISA command but that neither ERISA nor the Internal Revenue Code commands or expects as a plan provision, a plan sponsor might prefer to omit a plan-document provision (unless something is needed to negate or revise a plan-document provision that’s inconsistent with the ERISA command).

But consider whether the plan’s administrator wants a revision of a recordkeeper’s, third-party administrator’s, or other service provider’s agreement.

My observation about either question is not advice to anyone.

The underlining is not mine.