By Aubrey Clegg, CPA – Tax Director, Financial Institutions Group

As the end of the year quickly approaches, so does the deadline for tax-exempt 457(b) deferred compensation plans to adopt amendments required by the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 and the SECURE 2.0 Act of 2022.

Initially, qualified and governmental retirement plans had until the end of this year to adopt the amendments. However, in late 2023 the IRS extended the deadline for most plans until Dec. 31, 2026, but tax-exempt 457(b) plans were excluded from the extension.

Next Steps

With only a couple months left until the end of the year, sponsors of tax-exempt 457(b) plans must implement plan amendments, which include increasing the required minimum distribution age. Working with an attorney, third-party administrator or a qualified service provider who specializes in these types of plans is recommended to facilitate the plan amendments and ensure compliance by the Dec. 31, 2025, deadline.