The deadline for 457(b) deferred compensation plans sponsored by non-governmental, tax-exempt employers to be amended for the SECURE Act and the SECURE 2.0 Act did not get extended. If you are a non-governmental, tax-exempt employer that sponsors a calendar year 457(b) plan, amendments for these legislative changes are due by December 31, 2025.
Examples of the changes that would require an amendment by December 31, 2025:
- Required Minimum Distributions (RMDs). The SECURE Act permits an increase to the RMD age from 70½ to 72 after December 31, 2019, and the SECURE 2.0 Act permits a further increase to the RMD age from 72 to 73 for individuals who reach age 72 after December 31, 2022. The RMD age increases again to age 75 for individuals who reach age 74 on or after January 1, 2033.
- Small Benefit Cashout. SECURE 2.0 Act permits an increase in the de minimis distribution limit from $5,000 to $7,000. If your 457(b) plan implemented this optional increase in 2024 or 2025, the plan will need to be amended.
Note: Governmental 457(b) plans generally are not required to be amended until December 31, 2029.
Next Steps for Non-Governmental 457(b) Plan Sponsors
You should reach out to your document preparer to ensure that your amendment will be timely and that it accurately reflects your 457(b) plan’s operation.
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