Plan amendment

What a plan amendment is

There are two kinds. A discretionary amendment reflects a choice, such as adding Roth or changing the match, and generally must be signed by the end of the plan year in which it takes effect. A required amendment reflects a change in the law and is due by a deadline the IRS sets. For the SECURE 2.0 Act, IRS Notice 2024-2 set that deadline at December 31, 2026 for most plans. The IRS repeated that date in September 2026, though some required amendments, such as the Roth catch-up rules, will have later deadlines.

Why it matters to employers

A plan has to be run according to its written terms. Changing payroll first and the document later is an operational failure. An amendment cannot take away benefits participants have already earned. Participants must receive a summary of material modifications within 210 days after the end of the plan year in which the change was adopted. Safe harbor plans can make only certain changes during the year.

Example

A company wants to add Roth deferrals and raise its match from 3% to 4% on January 1, 2027. It signs the amendment in December 2026, updates payroll for the first January pay date, and gives employees a notice describing the change.

Common mistakes

• Changing how the plan runs and leaving the paperwork for later.

• Missing a required amendment deadline, which has to be fixed through the IRS correction program.

• Cutting an employer contribution that employees have already earned for the year.