The original rules under the law prior to the SECURE Act still drive many of the requirements for distributions, so they are worth briefly reviewing.
The RMD rules for defined contribution plans are set out in Sec. 401(a)(9). These basic rules apply to all defined contribution plans, including regular and Roth IRA accounts; annuity contracts; custodial accounts; profit-sharing, Sec. 401(k), and Sec. 403(b) accounts; and Sec. 457(d) deferred compensation accounts.
Sec. 401(a)(9)(A) provides rules for RMDs during the life of an IRA owner, and Sec. 401(a)(9) (B) addresses RMDs after the IRA owner’s death.
Sec. 401(a)(9)(B)(i) defines rules for distributions if the IRA owner dies after RMDs have begun. If the IRA owner has already begun taking RMDs, the decedent’s remaining interest must be distributed at least as rapidly as when the owner was alive.
Sec. 401(a)(9)(B)(ii) requires that if the IRA owner dies before RMDs have begun, the account must be distributed within five years after the owner’s death. This requirement was significantly modified by the SECURE Act, as described below. Under the original law, the account could be distributed at any time within five years. A beneficiary could wait until the last month of the fifth year to take a distribution. This is not the case under the SECURE Act.
