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Article | Insider

IRS delays effective date for proposed required minimum distribution rules

By Gary Chase and Maria Sarli | January 20, 2025

The earliest potential effective date for certain proposed required minimum distribution rules could be further delayed beyond the 2026 distribution calendar year.
Benefits Administration and Outsourcing Solutions|Retirement
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The IRS has announced a one-year delay (generally from the 2025 distribution calendar year to 2026) for the earliest potential effective date for certain proposed rules regarding the required minimum distribution (RMD) requirements. The RMD requirements affect the timing for participants and beneficiaries to receive distributions from tax-deferred retirement accounts each year to avoid tax penalties.

In July 2024, the IRS issued:

  • Final regulations (Final Rule) that reflected changes included in a proposed rule issued in February 2022 and certain changes enacted in December 2022 in SECURE 2.0
  • Proposed regulations (2024 Proposed Rule) addressing the remaining SECURE 2.0 changes

The delay only applies to the proposed effective date of certain provisions included in the 2024 Proposed Rule and does not affect any of the requirements in the Final Rule.

The delay in the proposed effective date affects the following provisions of the 2024 Proposed Rule:

  • Section 1.401(a)(9)-4: Proposed rules regarding the successor beneficiary of a surviving spouse
  • Section 1.401(a)(9)-5: Proposed rules regarding defined contribution plans, including:
    • The spousal election to have RMDs determined using the Uniform Lifetime Table
    • Treatment of distributions from Roth contribution accounts (i.e., the requirement that Roth contributions and earnings are not subject to the RMD requirement)
    • Corrective distributions and the excise tax on RMD failures
  • Section 1.401(a)(9)-6: Proposed rules that address the exception to the qualified domestic relations order requirements for qualified longevity annuity contracts

Going forward

Since the proposed effective date of the 2024 Proposed Rule is contingent on this rule becoming final, it is possible that the deadline could be further delayed beyond the 2026 distribution calendar year. In the interim, plan sponsors must follow a reasonable, good faith interpretation of the statute.

Authors


Director, Retirement and Executive Compensation

U.S. Retirement Resource Actuary

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