Required Minimum Distribution Guide - December 2022
Summary of the RMD Rules under the SECURE Act
There are new required minimum distribution (RMD) rules as a result of the Setting Every Community Up for Retirement Enhancement Act (SECURE Act) for death benefit distributions to one or more of the beneficiaries of a deceased employee who was a participant in a defined contribution retirement plan. The IRS issued proposed regulations in February on the new rules.
Fidelity has summarized the key aspects of the new rules in the Required Minimum Distribution Guide into the following sections:
Section One - Background: This section provides an overview and identifies the twelve key questions that must be answered to determine how the new death benefit rules apply to a beneficiary.
Section Two - RMD Flowcharts: This section includes RMD information in four flowcharts summarizing the different scenarios based on the RMD rules. This material identifies the applicable distribution options and when the money in the defined contribution plan must be distributed to the beneficiary or to the beneficiary of a deceased beneficiary because they were unable to receive all of the money in the account before their death. The flowcharts do not include any information for a trust that may be designated as a beneficiary.
Section Three – Fidelity Workplace Services LLC Administration of RMDs for Defined Contribution Plans: This section includes information about Fidelity’s administration of the RMD rules until the IRS issues final regulations and identifies the new RMD options that should be included in the plan document amendment for the new RMD rules. Fidelity will draft a good faith amendment for plan sponsors that are using our preapproved plan document.
The information in the Guide is based on Fidelity’s interpretation of the SECURE Act and the proposed regulations. However, we recognize that there may be other reasonable interpretations of certain provisions. Fidelity will update this Guide periodically and after the IRS finalizes their regulations or when more information is available. This Guide is not intended to constitute legal or tax advice.
