Erwin Kratz – Page 6 – ERISA Benefits Law

Private Letter Ruling Applies Controlled Group Rules to 501(c)(3) Entities

On March 16, 2018 the IRS issued a private letter ruling (PLR 201811009) analyzing and applying the controlled group rules to two related 501(c)(3) entities. The first entity is a Medical Center, organized in part for the purpose of operating an academic medical center as part of a health system affiliated with the other entity, a University.

The PLR reiterates the general rule that one 501(c)(3) entity (the University) in this case) does not “Control” another 501(c)(3) entity (the Medical Center) for purposes of the IRS controlled group rules where:

The University holds the power to approve and remove without cause four of the Medical Center’s 11 directors.
With the exception of the University’s chancellor, no employee of the University may serve as a director of the Medical Center.
The University holds no right or power to require the use of the Medical Center’s funds or assets for the University’s purposes.
Rather, the Medical Center determines its budget, issues debt and expends funds without oversight from the University.
The Medical Center has sole control over collection of its receivables and sole responsibility for satisfaction of its liabilities.
The University does not control hiring, firing or salaries of the Medical Center’s Employees.

The PLR states that the above facts evidence the Medical Center’s operational independence from the University and support a conclusion that the University does not directly control the Medical Center.

The PLR goes on to conclude that the University does not directly control the Medical Center, even though the University has the right to prohibit the Medical Center from taking certain actions, including:

any major corporate transaction not within the ordinary course of business;
any action that would result in a change in the Medical Center’s exempt status under §§ 501(c)(3) and 509(a) of the Code;
any material change to the Medical Center’s purposes;
any change in the fundamental, nonprofit, charitable, tax-exempt mission of the Medical Center;
any action that would grant any third party the right to appoint directors of the Medical Center;
a joint operating agreement or similar arrangement under which the Medical Center’s governance is substantially subject to a board or similar body that the Medical Center does not control; and
the sale or transfer of all or substantially all of the Medical Center’s assets.

The IRS determined that, although the above rights certainly represent a form of control over the Medical Center, such control is qualitatively different from the operational control factors that were not present here.

The key to the ruling is that the University’s rights do not confer the power to cause the Medical Center to act. Rather they confer the power to bar the Medical Center from taking certain actions. The right merely limits the Medical Center’s capacity to deviate from the charitable mission it shares with the university and diminishes the chance that the Medical Center will stray from the quality standards and community focus that the University wants in an academic medical center.

Background on Tax Exempt Control Group Rules

In the case of an organization that is exempt from tax under Code section 501(a), the employer includes the exempt organization and any other organization that is under common control with that exempt organization under the special rules set forth in Treas. Reg. §1.414(c)-5(b).

For this purpose, common control exists between an exempt organization and another organization if at least 80 percent of the directors or trustees of one organization are either representatives of, or directly or indirectly controlled by, the other organization. Treas. Reg. §1.414(c)-5(b). A trustee or director is treated as a representative of another organization if he or she also is a trustee, director, agent, or employee of the other organization. A trustee or director is controlled by another organization if the other organization has the general power to remove such trustee or director and designate a new trustee or director. Whether a person has the power to remove or designate a trustee or director is based on all the facts and circumstances. Id.

In the case of PLR 201811009, the University controlled far less than 80% of the Medical Center’s board positions, so the analysis focuses on the “facts and circumstances” element of control. The key takeaway is that the power to prevent another entity from acting does not necessarily result in control. Keep in mind, however, that PLRs are fact specific and can only be relied on by the taxpayer to whom they are issued. We therefore cannot conclude that the power to preclude action by another 501(c)(3) entity will never result in control.

9th Circuit Clarifies Service Provider’s Fiduciary Duties When Negotiating Fees and When Withdrawing Fees from Plan Assets

The Ninth Circuit Court of Appeals has issued an opinion in Santomenno v. Transamerica LLC, clarifying the circumstances under which a retirement plan investment service provider breaches (and does not breach) its fiduciary duties when negotiating its fees and when collecting the agreed fees from plan accounts.

The Case

The trial court in this case held that the plan investment service provider breached its fiduciary duties to plan beneficiaries first when negotiating with the employer about providing services to the plan and later when withdrawing predetermined fees from plan funds.

The 9th Circuit held that a plan administrator is not an ERISA fiduciary when negotiating its compensation with a prospective customer. The employer/plan sponsor doing the hiring is acting under a fiduciary duty when it negotiates these fees. Therefore, the prospective service provider did not breach its duties in negotiating for the fees it wanted to receive.

The Court also held that the service provider was not a fiduciary with respect to its receipt of revenue sharing payments from investment managers after it became a service provider to the Plan because the payments were fully disclosed before the provider agreements were signed and did not come from plan assets.

Finally, and most significantly, the Court held that the service provider also did not breach its fiduciary duty with respect to its withdrawal of the preset fees from plan funds. The Court concluded that when a service provider’s definitively calculable and nondiscretionary compensation is clearly set forth in a contract with the fiduciary-employer, collection of those fees out of plan funds in strict adherence to that contractual term is not a breach of the provider’s fiduciary duty. The withdrawal of its fees in such circumstances is a ministerial act that does not give rise to fiduciary liability.

The Take-Aways

This case highlights the importance of the fiduciary role played by the plan sponsor and administrator when hiring service providers to the Plan. Hiring and retention decisions are fiduciary acts on the part of the employer/plan sponsor, but are not fiduciary acts on the part of the service provider being hired.

In addition, while this case illustrates that it is not always a fiduciary act for a service provider to withdraw its fees directly from plan assets, that is not true in every case. For example, if the Plan sponsor or administrator disputed a charge before the service provider withdrew its fees, or if the fees withdrawn by the service provider were based on hours worked or some other non-ministerial measure of the service provided, the withdrawal may not be ministerial. This case therefore does not give service providers free reign to withdraw fees from plan assets without consideration of their fiduciary duties.

Santomenno v. Transamerica LLC

IRS Revises 2018 Annual HSA Contribution Limit for Family Coverage to $6,850 (down from $6,900)

The IRS has issued Rev. Proc. 2018-18, which revises the previously-published annual limitation on deductions under Code § 223(b)(2)(B) for 2018 for an individual with family coverage under a high deductible health plan. The originally published limitation was $6,900. It has now been reduced to $6,850.

Why the Change?

The recently enacted Tax Cuts and Jobs Act requires cost of living adjustments be made using the Chained Consumer Price Index for All Urban Consumers (C-CPI-U), which over time will reduce the cost of living adjustments made to various IRS limits.

What to Do

Employers making Health Savings Account (HSA) contributions for employees (either directly, or through their cafeteria plans) should review the elections made by their employees and adjust those elections to avoid exceeding the $6,850 limitation for 2018. Likewise, individuals making HSA contributions should revise any automatic contribution schedule they have established to avoid exceeding the limit.

The following chart summarizes various significant employee benefit Plan limits for 2016 through 2018:

Type of Limitation	2018	2017	2016
415 Defined Benefit Plans	$220,000	$215,000	$210,000
415 Defined Contribution Plans	$55,000	$54,000	$53,000
Defined Contribution Elective Deferrals	$18,500	$18,000	$18,000
Defined Contribution Catch-Up Deferrals	$6,000	$6,000	$6,000
SIMPLE Employee Deferrals	$12,500	$12,500	$12,500
SIMPLE Catch-Up Deferrals	$3,000	$3,000	$3,000
Annual Compensation Limit	$275,000	$270,000	$265,000
SEP Minimum Compensation	$600	$600	$600
SEP Annual Compensation Limit	$275,000	$270,000	$265,000
Highly Compensated	$120,000	$120,000	$120,000
Key Employee (Officer)	$175,000	$175,000	$170,000
Income Subject To Social Security Tax (FICA)	$128,400	$127,200	$118,500
Social Security (FICA) Tax For ER & EE (each pays)	6.20%	6.20%	6.20%
Social Security (Med. HI) Tax For ERs & EEs (each pays)	1.45%	1.45%	1.45%
SECA (FICA Portion) for Self-Employed	12.40%	12.40%	12.40%
SECA (Med. HI Portion) For Self-Employed	2.9%	2.9%	2.90%
IRA Contribution	$5,500	$5,500	$5,500
IRA Catch-Ip Contribution	$1,000	$1,000	$1,000
HSA Max. Contributions Single/Family Coverage	$3,450/ $6,850	$3,400/ $6,750	$3,350/ $6,750
HSA Catchup Contributions	$1,000	$1,000	$1,000
HSA Min. Annual Deductible Single/Family	$1,350/ $2,700	$1,300/ $2,600	$1,300/ $2,600
HSA Max. Out Of Pocket Single/Family	$6,650/ $13,300	$6,550/ $13,100	$6,550/ $13,100

Supreme Court Rejects “Yard-Man” Inference of Vesting of Retiree Health Benefits

The United States Supreme Court has ruled in the case of CNH Indus. N.V. v. Reese, that courts cannot simply infer lifetime vesting of retiree health benefits from a collective bargaining agreement. Instead, lifetime vesting must be expressly written into the agreement.

The Case

The employer in this case provided health benefits to certain employees who were eligible for benefits under the employer’s pension plan, in accordance with a collective bargaining agreement (CBA). When the CBA expired in 2004, some retirees sued, arguing that their health benefits were vested for life.

While the lawsuit was pending, the Supreme Court decided M&G Polymers USA, LLC v. Tackett, which held that courts must interpret CBAs according to “ordinary principles of contract law.” The trial court in this case then ruled for the retirees, and the Sixth Circuit affirmed, relying on presumptions the 6th Circuit originally established in UAW v. Yard-Man, Inc., even though the Supreme Court had explicitly rejected those presumptions in Tackett. The Sixth Circuit’s decision turned on its holding that the CBA’s 2004 expiration date was inconclusive as to whether the retiree health benefits terminated in 2004 or were vested for life because (1) the CBA specified that certain benefits, such as life insurance, ceased at a time different from other provisions, and (2) the CBA tied health care benefits to pension eligibility. The court acknowledged that Tackett precluded it from inferring vesting based on these plan provisions, but concluded that the provisions nevertheless rendered the CBA ambiguous, allowing consideration of extrinsic evidence that supported lifetime vesting.

The Supreme Court reversed, stating that “inferences applied in Yard-Man and its progeny” do not represent ordinary principles of contract law and therefore cannot be used to generate a reasonable inference that then creates ambiguity. The Court acknowledged that, when a contract is ambiguous, courts can consult extrinsic evidence to determine the parties’ intentions—but a contract is not ambiguous unless it is susceptible to at least two reasonable but conflicting meanings. In this case, the Supreme Court held that the CBA contained a durational clause that applied to all benefits, with no exception for retiree health benefits, and that therefore there is only one reasonable interpretation of the CBA – that it does not vest retiree health benefits for life.

Take-Aways

This case is re-assuring for employers offering retiree medical plans – that they are less at risk of inadvertently creating a vested lifetime retiree health benefit than if the Plantiffs had prevailed in this case. However, the long standing advice still stands: Employers should be explicit in their retiree health plan documents and SPDs that the benefit is not vested and that the employer retains full and unfettered discretion to amend or terminate the plan and the benefits at any time.

IRS Releases Sample Notice CP 220J Notice of Assessment of Employer Mandate Penalty

The IRS has released a sample of Notice CP 220J, which the IRS will use to notify applicable large employers (ALEs) that it has charged them an employer mandate penalty under Code § 4980H for failure to offer adequate health coverage to full-time employees and their dependents.

The release of Notice CP 220J follows last year’s release of Letter 226J (the initial letter that the IRS will use to notify employers of the assessment of proposed employer mandate penalties) and Forms 14764 (Employer’s response to proposed penalties) and 14765 (list of employees receiving premium tax credit). Employers may use Form 14765 to change information previously reported to the IRS, which could potentially reduce or eliminate employer mandate penalties.

Employers receiving a Notice CP 220J will have three choices:

Pay the assessment
File a claim for refund on Form 843, Claim for Refund and Request for
Abatement.
If you want to take your case to court immediately, include a written request to issue a Notice of Claim Disallowance. Employers will then have two years from the date of the notice of disallowance to file suit in the United States District Court that has jurisdiction or the United States Court of Federal Claims.

Updated Disability Claims Procedures Go Into Effect April 2, 2018

The Department of Labor’s final rules updating the procedures for disability claims goes into effect on April 2, 2018. This post summarizes the new rules; which plans are affected by the new rules; and the next steps affected plans should take.

Affected Plans

The Claims Procedure Regulations at C.F.R. §2560.503-1 affect all ERISA Plans, including pension plans such as defined benefit and 401(k) plans, welfare benefit plans like medical and disability insurance plans. As a practical matter, the changes to the rules for disability claims only impacts plans that actually make disability determinations. Therefore, if your pension or 401(k) Plan relies on disability determinations made by a third party, like the Social Security Administration, you should not need to make any changes to your plan documents or your claims procedures as a result of the new rules.

Next Steps

Affected plans have until December 31, 2018 to adopt the necessary plan amendments, but the amendment will need to be effective, and Plans will need to comply with the revised rules, as of April 2, 2018. Affected Plans will also need to update their Summary Plan Descriptions to reflect the new rules.

Summary of the Changes

The new rules amend the claims procedure regulation at 29 C.F.R. §2560.503-1 for disability benefits to require that plans, plan fiduciaries, and insurance providers comply with additional procedural protections when dealing with disability benefit claimants. Specifically, the final rule includes the following changes in the requirements for the processing of claims and appeals for disability benefits:

Basic Disclosure Requirements. Benefit denial notices must contain a more complete discussion of why the plan denied a claim and the standards used in making the decision. For example, the notices must include a discussion of the basis for disagreeing with a disability determination made by the Social Security Administration if presented by the claimant in support of his or her claim.
Right to Claim File and Internal Protocols. Benefit denial notices must include a statement that the claimant is entitled to receive, upon request, the entire claim file and other relevant documents. Previously, this statement was required only in notices denying benefits on appeal. Benefit denial notices also have to include the internal rules, guidelines, protocols, standards or other similar criteria of the plan that were used in denying a claim or a statement that none were used. Previously, instead of including these internal rules and protocols, benefit denial notices have the option of including a statement that such rules and protocols were used in denying the claim and that a copy will be provided to the claimant upon request.
Right to Review and Respond to New Information Before Final Decision. The new rule prohibits plans from denying benefits on appeal based on new or additional evidence or rationales that were not included when the benefit was denied at the claims stage, unless the claimant is given notice and a fair opportunity to respond.
Avoiding Conflicts of Interest. Plans must ensure that disability benefit claims and appeals are adjudicated in a manner designed to ensure the independence and impartiality of the persons involved in making the decision. For example, a claims adjudicator or medical or vocational expert could not be hired, promoted, terminated or compensated based on the likelihood of the person denying benefit claims.
Deemed Exhaustion of Claims and Appeal Processes. If plans do not adhere to all claims processing rules, the claimant is deemed to have exhausted the administrative remedies available under the plan, unless the violation was the result of a minor error and other specified conditions are met. If the claimant is deemed to have exhausted the administrative remedies available under the plan, the claim or appeal is deemed denied on review without the exercise of discretion by a fiduciary and the claimant may immediately pursue his or her claim in court. The revised rule also provides that the plan must treat a claim as re-filed on appeal upon the plan’s receipt of a court’s decision rejecting the claimant’s request for review.
Certain Coverage Rescissions are Adverse Benefit Determinations Subject to the Claims Procedure Protections. Rescissions of coverage, including retroactive terminations due to alleged misrepresentation of fact (e.g. errors in the application for coverage) must be treated as adverse benefit determinations, thereby triggering the plan’s appeals procedures. Rescissions for non-payment of premiums are not covered by this provision.
Notices Written in a Culturally and Linguistically Appropriate Manner. The final rule requires that benefit denial notices have to be provided in a culturally and linguistically appropriate manner in certain situations.

Budget Act Relaxes Hardship Distribution Rules

The Bipartisan Budget Act of 2018, which was signed into law on Friday, February 9, 2018, changes the rules related to hardship distributions from qualified defined contribution plans, effective for Plan Years starting after December 31, 2018, in three significant ways:

The Act removes the requirement that Participants exhaust the ability to take any available loans under the plan before taking a hardship distribution.
The Act allows Participants to take a hardship distribution from their elective deferral contribution accounts, qualified nonelective contributions (“QNECs”), and qualified matching contributions (“QMACs”), as well as from earnings on those contributions. Previously, hardship distributions could only be taken from elective deferral contributions only, and not from any earnings on deferrals.
The Act repeals the rule prohibiting participants from making elective deferrals and other employee contributions for six months after taking a hardship distribution.

Employers that want to implement any or all of the above relaxations in the hardship distribution rules will almost certainly need to amend their plans. While I am generally not a fan of permitting hardship distributions in qualified plans, because they undermine the purpose of retirement savings and add administrative complexity, if your plan provides for hardship distributions you will probably want to incorporate these changes because they will simplify and streamline plan administration.

Cadillac Tax Delayed to 2022

The legislation passed by Congress and signed by President Trump on January 23, 2018 to continue funding the government through February 8, 2018 also delays the “Cadillac Tax” another two years.

The Cadillac Tax is now not scheduled to become effective until 2022. While it is likely future Congresses will continue to delay, or perhaps eliminate the tax entirely, employers and others that sponsor Cadillac plans should continue to monitor the situation and have contingencies to deal with it if the tax does in fact go into effect.

See our prior post on this related topic: IRS Proposes Various Approaches to Cadillac Tax Implementation

Tax Cuts and Jobs Act Includes Employee Benefits Changes and Elimination of ACA Individual Mandate Penalty

The Tax Cuts and Jobs Act, which the President signed into law on December 22, 2017 enacts significant tax reforms that include a number of employee benefits changes. Significant employee benefits changes include:

Individual Mandate Repeal.

Effective in 2019, the Act will reduce to zero the individual shared responsibility (individual mandate) penalty. This will inevitably lead to more people deciding not to purchase health insurance. Coupled with guaranteed issue, which remains the law, this will contribute to the potential “death spiral” in the individual insurance market.

Extended Rollover Period for Qualified Plan Loans.

If a participant’s account balance in a qualified retirement plan is reduced to repay a plan loan and the amount of that offset is considered an eligible rollover distribution, the offset amount can be rolled over into an eligible retirement plan. Under current law, the rollover must occur within 60 days. The legislation extends the 60-day deadline until the due date (including extensions) for the participant’s tax return for the year in which the amount is treated as distributed. Plan loan offset amounts qualifying for this extended deadline are limited to loan amounts that are treated as distributed solely by reason of either termination of the plan or failure to meet the loan’s repayment terms because of a severance from employment.

New Employer Tax Credit for Paid Family and Medical Leave.

The Act creates a new tax credit for eligible employers providing paid family and medical leave to their employees. To be eligible, employers must have a written program that pays at least 50% of wages to qualified employees for at least two weeks of annual paid family and medical leave.

Eligible employers paying 50% of wages may claim a general business credit of 12.5% of wages paid for up to 12 weeks of family and medical leave a year. The credit increases to as much as 25% if the rate of payment exceeds 50%. The provision is generally effective for wages paid in taxable years beginning after December 31, 2017, and before January 1, 2020. Leave provided as vacation, personal leave, or other medical or sick leave is not considered to be family and medical leave eligible for this credit.

Moving Expense Deduction Eliminated.

For an eight-year period starting in 2018, most employees will not be able to exclude qualified moving expense reimbursements from income or deduct moving expenses. During that period, the exclusion and deduction are preserved only for certain members of the Armed Forces on active duty who move pursuant to a military order.

Qualified Transportation Plans Eliminated.

The Act eliminates the employer deduction for qualified transportation fringe benefits and, except as necessary for an employee’s safety, for transportation, payments, or reimbursements in connection with travel between an employee’s residence and place of employment.

The tax exclusion for qualified transportation fringe benefits is generally preserved for employees, but the exclusion for qualified bicycle commuting reimbursements is suspended and unavailable for tax years beginning after 2017 and before 2026.

Other Fringe Benefits Deductions Eliminated.

Effective for amounts paid or incurred after 2017, the Act repeals the rule under Code § 274 that previously allowed a partial deduction for certain entertainment, amusement, and recreation expenses (including expenses for a facility used in connection with such activities) if those expenses are sufficiently related to or associated with the active conduct of the taxpayer’s business.

Also, effective after 2017, the deductibility of employee achievement awards is limited by a new definition of “tangible personal property” that denies the deduction for cash, cash equivalents, and gift cards, coupons, or certificates, except when employees can only choose from a limited array pre-selected or pre-approved by the employer.

Other nondeductible awards include—vacations, meals, lodging, theater or sports tickets, and securities.

Inflation Adjustments.

Beginning in 2018, many dollar amounts in the Code—including some benefit-related amounts—that are currently adjusted for inflation using the Consumer Price Index for All Urban Consumers (“CPI-U”) will instead be adjusted using the Chained Consumer Price Index for All Urban Consumers (“C-CPI-U”). According to the Bureau of Labor Statistics (which determines and issues the CPI), the C-CPI-U is a closer approximation to a true cost-of-living index for most consumers, and it tends to increase at a lower rate than the CPI-U.

IRS Issues 2017 “Required Amendments List”

The IRS has issued the 2017 “Required Amendments List” for qualified plans. This is the second list issued since the IRS eliminated the five-year remedial amendment cycle and significantly curtailed the favorable determination letter program for individually designed plans. The IRS will issue a new List each year.

This new List, set forth in Notice 2017-72 contains amendments that are required as a result of changes in qualification requirements that become effective on or after January 1, 2017. The plan amendment deadline for a disqualifying provision arising as a result of a change in qualification requirements that appears on the 2017 List must be adopted by December 31, 2019.

The Required Amendments List is divided into two parts:

Part A lists the changes that would require an amendment to most plans or to most plans of the type affected by the particular change. Part A of the 2017 List contains two changes applicable to most plans of the type affected by the changes:

• Final regulations regarding cash balance/hybrid plans. Cash balance/hybrid plans must be amended to the extent necessary to comply with those portions of the regulations regarding market rate of return and other requirements that first become applicable to the plan for the plan year beginning in 2017. (This requirement does not apply to those collectively bargained plans that do not become subject to these portions of the regulations until 2018 or 2019 under the extended applicability dates provided in § 1.411(b)(5)-1(f)(2)(B)(3).)

Note: The relief from the anti-cutback requirements of § 411(d)(6) provided in § 1.411(b)(5)-1(e)(3)(vi) applies only to plan amendments that are adopted before the effective date of these regulations.

Note: See also Notice 2016-67, which addresses the applicability of the market rate of return rules to implicit interest pension equity plans.

• Benefit restrictions for certain defined benefit plans that are eligible cooperative plans or eligible charity plans described in section 104 of the Pension Protection Act of 2006, as amended (“PPA”)). An eligible cooperative plan or eligible charity plan that was not subject to the benefit restrictions of § 436 for the 2016 plan year under § 104 of PPA ordinarily becomes subject to those restrictions for plan years beginning on or after January 1, 2017. However, a plan that fits within the definition of a “CSEC plan” (as defined in § 414(y)) continues not to be subject to those rules unless the plan sponsor has made an election for the plan not to be treated as a CSEC plan.

Part B lists changes that the Treasury Department and IRS do not anticipate will require amendments in most plans, but might require an amendment because of an unusual plan provision in a particular plan. Part B of the 2017 List contains a single change that may apply to certain defined benefit plans as follows:

• Final regulations regarding partial annuity distribution options for defined benefit pension plans (81 Fed. Reg. 62359). Defined benefit plans that permit benefits to be paid partly in the form of an annuity and partly as a single sum (or other accelerated form) must do so in a manner that complies with the § 417(e) regulations. Section 1.417(e)-1(d)(7) provides rules under which the minimum present value rules of § 417(e)(3) apply to the distribution of only a portion of a participant’s accrued benefit.

Section 1.417(e)-1(d)(7) applies to distributions with annuity starting dates in plan years beginning on or after January 1, 2017, but taxpayers may elect to apply § 1.417(e)-1(d)(7) with respect to any earlier period.

Note: The regulations provide relief from the anti-cutback rules of § 411(d)(6) for certain amendments adopted on or before December 31, 2017.

Note: Model amendments that a sponsor of a qualified defined benefit plan may use to amend its plan to offer bifurcated benefit distribution options in accordance with these final regulations are provided in Notice 2017-44.

Additional Background

In Rev. Proc. 2016-37, the IRS eliminated, effective January 1, 2017, the five-year remedial amendment/determination letter cycle for individually-designed qualified plans. After January 1, 2017, individually-designed plans will only be able to apply for a determination letter upon initial qualification, upon termination, and in certain other circumstances that the IRS may announce from time to time. See Announcement 2015-19.

To provide individually designed plans with guidance on what amendments must be adopted and when, the IRS announced that it would publish annually a Required Amendments List. The Required Amendments List generally applies to changes in qualification requirements that become effective on or after January 1, 2016. The List also establishes the date that the remedial amendment period expires for changes in qualification requirements contained on the list. Generally, an item will be included on a Required Amendments List only after guidance (including any model amendment) has been issued.

Where a required amendment appears on the List, then for an individually-designed non-governmental plan, the deadline to adopt the amendment is extended to the end of the second calendar year that begins after the issuance of the Required Amendments List in which the change in qualification requirements appear (i.e. until December 31, 2018 for items on the 2016 List; and until December 31, 2019 for items on the 2017 List.)

See our prior post regarding the 2016 Required Amendment List Here.