Secure Act - RMD Changes - Amendment Needed?

[Stash026]

Does the RMD change for the Secure Act require an amendment to adopt for Plans?  I know things like the $5,000 distribution for a newborn requires an amendment, but I haven't seen anything where it says if the RMD changes also need one or if it's just an automatic change.

Thanks!

[RatherBeGolfing]

I think most documents reference the code section rather than a specified age, but it would probably depend on the document.  

[Stash026]

 

6 hours ago, RatherBeGolfing said:

I think most documents reference the code section rather than a specified age, but it would probably depend on the document.  

Of course for the definition of Required Beginning Date on my document software it states "April 1st of the calendar year following the calendar year in which the Participant reaches age 70½".  I guess we'll have to be doing amendments for each document.

Thanks!

[Bri]

I presume the IRS will at some point issue guidance on when these remedial amendments would be necessary.  It's not like we've all crammed in our 2019 hardship provisions onto amendments yet.  (Or have we?)

[Kristina]

There will have to be amendments since SECURE only changes the RMD beginning age for those who turn 70 1/2 after 1/1/20.  Yes, people there will be two groups of people subject to RMDs:  those who started at 70 1/2 and those who start at 72

[RatherBeGolfing]

4 hours ago, Kristina said:

There will have to be amendments since SECURE only changes the RMD beginning age for those who turn 70 1/2 after 1/1/20.  Yes, people there will be two groups of people subject to RMDs:  those who started at 70 1/2 and those who start at 72

After 12/31/2019.  If you hit 70.5 on 1/1/20 you are in the 72 group.

[EPCRSGuru]

Three of my plans incorporate 401(a)(9) by reference and at first glance I don't think I need an amendment, but, surprisingly enough, I am getting pushback from management who does not want to change the RMD rules for our plans.  Can anyone think of any good reasons to retain the age 70 1/2 required beginning date?

 

[Belgarath]

I dunno. Possibly system/programming/procedural changes that they don't want to deal with? Delaying getting people paid out and possibly off the books? Just guessing.

I'd expect most clients would want the delay, since the largest RMD's are usually the >5%owners...

[Caroline Martinez]

1 hour ago, EPCRSGuru said:

Three of my plans incorporate 401(a)(9) by reference and at first glance I don't think I need an amendment, but, surprisingly enough, I am getting pushback from management who does not want to change the RMD rules for our plans.  Can anyone think of any good reasons to retain the age 70 1/2 required beginning date?

 

Not sure the changes are optional. The new Uniform Tables will be issued to be used for 2021 RMD's and they take into account the later age requirement for those under the old and the new rules. I understand it is difficult to revise a current process to include both RMD groups but I didn't perceive it as anything other than mandatory? 

[Peter Gulia]

Not that I'm advocating or suggesting anything, but:

Aside from provisions about not compelling a distribution until the participant has reached normal retirement age, is there anything in ERISA or the Internal Revenue Code that restrains a plan’s provision that sets the plan’s required beginning date earlier than IRC § 401(a)(9)’s condition for tax treatment?

 

[Mike Preston]

23 minutes ago, Peter Gulia said:

Not that I'm advocating or suggesting anything, but:

Aside from provisions about not compelling a distribution until the participant has reached normal retirement age, is there anything in ERISA or the Internal Revenue Code that restrains a plan’s provision that sets the plan’s required beginning date earlier than IRC § 401(a)(9)’s condition for tax treatment?

 

Not that I'm aware of.