RMD Communication to Plan Participants and Beneficiaries

Education on RMD regulations and requirements

This service campaign is designed to be educational and timely, reminding participants or beneficiaries of inherited retirement plan assets of upcoming Required Minimum Distribution (RMD) or full payout deadlines.

Eligibility and who will receive these communications

Those who will receive this communication are:

  • Participants when they reach RMD- eligible age. 
  • Participants taking RMDs without a SWP.
  • Beneficiaries of plans with required distributions.

Timing

Varies by communication (see below).

Frequently asked questions:

If a participant is still working, do they need to take an RMD?

If the participant continues working past age 73, they may delay taking RMDs from their workplace savings plan, such as a 401(k), 403(b), or small-business account, provided:
• They are they still working for the employer who sponsors the plan and the plan allows
• They do NOT own more than 5% of the business

What if a participant has a Systematic Withdrawal Plan (SWP)?

If a participant has a SWP on file for an RMD, they will be excluded from the annual communication.

First-time RMD

For participants turning 73, this communication provides details about taking their first RMD. Messages varies depending on whether the participant's plan offers the auto-generated service or the non-auto-generated service.

Sample Auto-Gen: The plan uses the automatic-generated service
Sample Non-Auto Gen: The plan does not use the automatically generated service

Timing: Runs weekly

Repeat RMD

Communication sent to participants who previously received a RMD and have not established a systematic withdrawal for future RMDs.

Sample Auto-Gen
Sample Non-Auto Gen

Timing: Runs annually (typically Q3)

Netbenefits article

Review RMD Frequently Asked Questions.

Beneficiary communications

Plans with a 5- or 10-year required distribution to beneficiaries. There will be two communications to provide beneficiaries time for planning purposes:

1. The year before: A communication is sent one year before the required distribution deadline for all inherited account assets, which must be distributed by December 31 of the 5th or 10th year. 

Sample 4th year or 9th year

2. The year of: A communication is sent during the year in which all inherited account assets must be distributed by December 31 of the applicable 5th or 10th year. 

Sample 5th year or 10th year

Timing: Runs annually (typically Q3)

Beneficiaries of plans not subject to 5- or 10-year rule

This communication is sent to beneficiaries whose plans do not follow a 5- or 10-year scheduled full payout and require a Systematic Withdrawal Plan (SWP) on file. The final payment is issued approximately 60 days before the required distribution. 

Sample Plan-required full distribution

Timing: Runs monthly

For plan sponsor and investment professional use only.

1. The “applicable age” for commencing RMDs was updated under the SECURE 1.0 Act and the SECURE 2.0 Act based on the employees date of birth as follows:

    • 70½ for those born before July 1, 1949;
    • 72 for those born on or after July 1, 1949, and before January 1, 1951;
    • 73 for those born on or after January 1, 1951, and before January 1, 1960;
    • 75 for those born on or after January 1, 1960.

If an individual waits until April 1 of the year after reaching the applicable age for commencing RMDs and/or terminating employment with the employer sponsoring the plan, they will be required to take two distributions that year to satisfy the first and second year RMDs.

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