IRS postpones effective date of proposed required minimum distribution regulations

The IRS has announced a delay in the effective date of certain proposed regulations on required minimum distributions (RMDs). The regulations are now anticipated to “apply for the distribution calendar year that begins no earlier than six months after the date that final regulations are issued.“

As background, in July 2024, the IRS published final regulations on RMDs that reflected changes made by the SECURE 1.0 Act and certain changes under SECURE 2.0. At the same time, the IRS published proposed regulations implementing other SECURE 2.0 changes to the RMD rules.

The SECURE 2.0 regulations were first proposed to apply for purposes of determining RMDs for calendar years beginning on or after January 1, 2025 (so that they would begin to apply at the same time as the SECURE 1.0 final regulations). However, in response to benefit practioner concerns about this relatively short deadline, the IRS extended the effective date, with limited exceptions, to apply no earlier than the 2026 distribution calendar year. In the interim, “taxpayers were expected to apply a reasonable, good-faith interpretation of the statutory provisions underlying the amendments.“

This second postponement was necessitated by the fact that the SECURE 2.0 proposed regulations have yet to be finalized. As was the case with the first postponement, taxpayers are to continue applying a reasonable, good-faith interpretation of the provisions.

The delayed effective date only applies to specific provisions in the proposed regulations implementing SECURE 2.0 changes regarding:

• The successor beneficiary of a surviving spouse
• Defined contribution plans, including:
  • The spousal election to be treated as though the spouse were the participant (e.g., to delay the distributions to the participant’s required beginning date) and to have RMDs determined using the Uniform Lifetime Table
  • Treatment of distributions from in-plan Roth contribution accounts (i.e., the proposed rule that they do not count toward a participant’s RMD requirement)
  • That corrective distributions are not eligible for rollover and do not count toward the RMD that is otherwise due for the year in which the corrective distribution is made
• The exception to the qualified domestic relations order requirement for qualified longevity annuity contracts

The delay does not affect any of the requirements in the 2024 final rules.

Authors

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Stephen Douglas

Senior Director, Retirement and Executive Compensation

email Email phone +1 203 326 6315

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Maria Sarli

U.S. Retirement Resource Actuary

email Email phone +1 404 365 1708

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