On August 26, 2025, the Puerto Rico Department of Treasury (the “PR Treasury”) issued Administrative Determination No. 25-03 (“DA 25-03”), providing guidance on the treatment of required and optional plan amendments under the Setting Every Community Up for Retirement Enhancement Act of 2022 (“SECURE Act 2.0”) as they apply to Puerto Rico qualified retirement plans. The determination clarifies the PR Treasury’s position on whether such amendments trigger a tax re-qualification process. DA 25-03 is effective immediately and applies to plan years commencing after December 29, 2022.
The SECURE Act 2.0
The SECURE Act 2.0, enacted by the United States Congress on December 29, 2022, amended the Internal Revenue Code of 1986 (the “U.S. Code”), and the Employee Retirement Income Security Act of 1974 (“ERISA”). Its purpose is to strengthen retirement security and facilitate the establishment and expansion of employer-sponsored retirement plans. Certain provisions of the SECURE Act 2.0 require mandatory amendments for employers that sponsor retirement plans, while others are optional and effective dates vary between 2022 and 2025.
Qualification Requirements under the PR Code
Retirement plans covering participants in Puerto Rico are subject to qualification requirements under the Puerto Rico Internal Revenue Code of 2011, as amended (the “PR Code”), and may also be subject to the U.S. Code to the extent they cover U.S. participants.
Pursuant to Section 1081.01(a)(13)(A) of the PR Code, Puerto Rico retirement plan trusts must obtain a qualification determination (a “Qualification Letter”) from the PR Treasury in order to benefit from tax exemption. Plans that receive a Qualification Letter are treated as Puerto Rico qualified retirement plans. Under existing guidance, specifically Circular Letter of Tax Policy No. 16-08 (“CL 16-08”), any “Qualification Amendments” (as defined therein) adopted after a plan obtained a Qualification Letter triggered a re-qualification process before the PR Treasury. However, CL 16-08 expressly excluded from the definition of “Qualification Amendments” those amendments adopted to incorporate future changes to the U.S. Code or ERISA.
Because of the interplay between federal law and Puerto Rico requirements, plan sponsors faced uncertainty as to whether amendments implementing SECURE Act 2.0 provisions would be treated as “Qualification Amendments” requiring resubmission to the PR Treasury for qualification.
Determination by the PR Treasury
In DA 25-03, the PR Treasury determined that amendments adopted solely to implement SECURE Act 2.0 provisions—whether mandatory or optional—are not considered “Qualification Amendments” under CL 16-08. Therefore, Puerto Rico qualified plans do not need to resubmit for a new Qualification Letter solely because of SECURE Act 2.0 amendments.
Examples of SECURE Act 2.0 amendments that do not require resubmission to the PR Treasury to obtain a new Qualification Letter include: (i) Section 125: mandatory amendments expanding eligibility to long-term part-time employees, (ii) Section 304: amendments to increase the small amount distribution limits from $5,000 to $7,000, (iii) Section 107: amendments to comply with the new rule concerning minimum distributions, and (iv) Section 110: amendments permitting employers’ matching contributions based on participants’ student loan repayments.
The PR Treasury emphasized that when SECURE Act 2.0 amendments are adopted in combination with other plan amendments—such as changes to eligibility rules, benefit formulas, or payment methods—those additional amendments must be analyzed under CL 16-08 and may require submission for qualification.
This document has been prepared for information purposes only and is not intended as and should not be relied upon as legal advice. If you have any questions or comments about the matters discussed in this notice, wish to obtain more information related thereto, or about its possible effect(s) on policy or operational matters, please contact us.