IRS Announces Second Remedial Amendment Cycle For Code Sec. 403(b) Pre-Approved Plans, Announcement 2024-38

The IRS announced details for the second remedial amendment cycle (Cycle 2) for Code Sec. 403(b) pre-approved plans. The IRS also addressed a procedural rule that applies to all pre-approved plans and provided guidance to adopting employers of retirement income account plans.

Opinion letters for Cycle 2 plans will be issued by November 29, 2024, or shortly thereafter. Employers must adopt Cycle 2 pre-approved plans by December 31, 2026, in accordance with Rev. Proc. 2023-37. Employers eligible to apply for individual determination letters may submit requests from January 1, 2025, to December 31, 2026, using Form 5307 or Form 5300 as applicable.

The announcement reaffirms that procedural restatement rules under Rev. Proc. 2019-39 and Rev. Proc. 2016-37 remain applicable to all pre-approved plans (both 403(b) and qualified preapproved plans), including future cycles.

Further, the IRS reminded adopting employers of Code Sec. 403(b)(9) retirement income account plans to comply with the “established or maintained” rule under Code Secs. 403(b)(9) and 414(e)(3)(A). These requirements ensure that plans are associated with a church or similar organization, maintaining eligibility under current regulations.

Announcement 2024-38