Deadline Imminent for SECURE 2.0 Amendments to Tax-Exempt 457(b) Plans
Unlike virtually all other types of plans, 457(b) plans maintained by (non-governmental) tax-exempt entities—such as many charities, hospitals, insurers, and private universities—did not receive the benefit of an extended amendment deadline for compliance with SECURE 2.0 (as well as previous legislation, including the original SECURE Act). (Governmental 457(b) plans do have an extended amendment deadline.) Therefore, by the end of the 2025 plan year (i.e., December 31, 2025 for calendar year plans), all 457(b) plans sponsored by (non-governmental) tax-exempt entities must be amended for this legislation. The required updates largely relate to required minimum distribution rules and are necessary to reflect increases to the required minimum distribution age as well as the final RMD regulations’ position that the elimination of the stretch IRA does apply to these types of plans.
There is no correction program available for these types of plans, so missed amendments can have devastating consequences. If you believe that you may be affected by these requirements and your 457(b) plan(s) have not already been amended, please contact the authors as soon as possible (and no later than December 15, 2025), so that we can ensure your plan remains compliant.
