Interim Amendment Guidance for Qualified Plans

December 2, 2005 – The IRS is releasing Notice 2005-95, which provides guidance on interim amending of qualified retirement plans for plan provisions such as designated Roth contributions (Roth 401(k) contributions), final IRC Sec. 401(k) and 401(m) regulations, automatic rollovers, retroactive annuity starting dates (a defined benefit issue), etc.

The deadline for interim amending to allow Roth 401(k) contributions will be the last day of the first plan year in which this contribution option is made available. For calendar year plans that will begin allowing Roth contributions as of January 1, 2006, the amending deadline is December 31, 2006. Fiscal year plans that allow designated Roth contributions as of January 1, 2006, or before the end of the plan year that ends in 2006, must amend by that end-of-plan year date. For example, a fiscal year plan that allows Roth contributions as of January 1, 2006, and has a plan year end of March 31, 2006, must amend by March 31, 2006. The IRS indicates that a sample amendment for designated Roth contributions will be made available “after publication of the final 401(k) regulations as amended for designated Roth contributions.” Notice 2005-95 does not specify when this will be. 

In addition, plans that have chosen to implement the final IRC Sec. 401(k) and 401(m) regulations optionally in 2005 have only until the end of 2005 to amend. Late amenders for the automatic rollover rules are granted an extension to December 31, 2005.  In effect, this means that late amenders who have amended by this date will not be required to go through a corrections program process as a consequence of late amending.

The IRS has not yet provided a web link to Notice 2005-95. When available, it will be posed in this Latest News section.