On February 24, the IRS published long-awaited proposed changes to the required minimum distribution (RMD) regulations. RMDs are distributions to participants age 70½ or 72,** as applicable, or beneficiaries of deceased participants. These proposed regulations are in accordance with the legislative changes required under the Setting Every Community Up for Retirement Enhancement Act 2019 (“SECURE Act”). Please refer to the SECURE Act Guide (Jan. 2022 Update) for further information.
The regulations are effective January 1, 2022, even though they were not issued until late February. Fidelity is reviewing and analyzing the impact on Fidelity’s retirement products and services to determine the required changes for 2022 and for subsequent years. The IRS is soliciting written comments on the regulations and will hold a public hearing in June. Several industry groups have already submitted letters to the IRS raising concerns about the impact of the proposed regulations on 2022 required minimum distributions. They have also requested a delay in the effective date until after the final regulations have been published and good faith compliance relief for required distributions for the 2022 calendar year.
Fidelity will continue to monitor events and provide updates as needed, including once final regulations are published. We will provide an update about the impact of the regulations on plans, participants, and beneficiaries later this year.
**The old RMD rule applies for the calendar year the employee (or a 5% owner) is age 70½ for employees who were 70½ before January 1, 2020 (born before July 1, 1949). The new RMD rule applies for the calendar year the employee (or a 5% owner) is age 72 for employees who were 70½ on or after Dec. 31, 2019 (born on or after July 1, 1949)