SECURE 2.0 amendments don’t affect qualification in Puerto Rico 

Puerto Rico’s Department of Treasury (“Hacienda”) recently announced that amendments to Puerto Rico retirement plans for the SECURE 2.0 Act of 2022 (Div. T of Pub. L. No. 117-328) are not “qualification amendments” under Puerto Rico’s tax code. Administrative Determination No. 25-03 (DA 25-03) confirms that sponsors of Puerto Rico retirement plans adopting any of SECURE 2.0’s required or optional changes do not have to apply for a new letter of qualification because of those amendments. Amendments for SECURE 2.0 are due by Dec. 31, 2026 (Dec. 31, 2028, for collectively bargained plans and Dec. 31, 2029, for governmental plans).

Retirement plans in Puerto Rico must obtain a qualification letter to be exempt from tax in Puerto Rico. A sponsor that adopts qualification amendments after receiving a qualification letter must request a new one from Hacienda. Under Tax Policy Circular Letter No. 16-08 (CC PC No. 16-08), qualification amendments include changes to a plan’s eligibility conditions, benefit formula and payment provisions (among other changes). However, amendments to comply with federal tax law and ERISA are not considered qualification amendments.

Sponsors of plans that are dual-qualified under Puerto Rico and US federal tax law may need to amend their plans to reflect provisions of SECURE 2.0 that affect plan eligibility, benefits and payment. DA 25-03 mentions the following examples:

• Rules regarding the participation of long-term, part-time employees in 401(k) plans
• The option to offer matching contributions on participants’ student loan repayments
• The increase in the small benefit cashout threshold to $7,000
• Various changes to the federal tax code’s required minimum distribution rules (including changes to the required beginning age)

DA 25-03 confirms that these and all other SECURE 2.0 changes — both required and optional — are considered amendments to comply with federal tax law and ERISA, and not qualification amendments requiring a new qualification letter. However, other amendments adopted at the same time as SECURE 2.0 amendments are not covered by DA 25-03 and must be separately analyzed to determine if they are qualification amendments under CC PC No. 16-08.

• Determinación Administrativa Núm. 25-03 (Departamento de Hacienda, Aug. 27, 2025)
• Carta Circular de Política Contributiva Núm. 16-08 (Departamento de Hacienda, Dec. 29, 2016)

• User’s guide to SECURE 2.0 (periodically updated)