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The Treasury Department ("Treasury") and the Internal Revenue Service (the "IRS") recently issued Announcement 2026-7, further delaying the effective date for certain required minimum distribution ("RMD") regulations issued under the SECURE Act of 2019 and SECURE 2.0 Act of 2022. This delay aims to provide sufficient time for (1) the IRS to address concerns raised by commentators to the proposed regulations, and (2) retirement plans to implement the final regulations.
As a refresher, prior to the SECURE Act, participants were generally required to begin RMDs at age 70½ and many designated beneficiaries could "stretch" distributions over their life expectancy. The SECURE Act made to primary changes: (1) increased the RMD age from 70½ to 72, and (2) eliminated the lifetime "stretch" for most non-spouse beneficiaries, replacing it with a 10-year distribution rule.
Congress made additional changes to RMDs by enacting SECURE 2.0 which primarily: (1) gradually increased the RMD age again (up to age 75, depending on birth year), and (2) eliminated lifetime RMDs for designated Roth accounts in employer plans.
In 2024, Treasury and the IRS issued final and proposed regulations implementing SECURE 2.0 and set a proposed applicability date for both sets of regulations for calendar years beginning on or after January 1, 2025. However, industry stakeholders raised concerns regarding some of the provisions of the proposed regulations as well as the feasibility of implementing these changes within the proposed timeline.
In response to these concerns, Treasury and the IRS extended the implementation date for the proposed regulations to the 2026 distribution calendar year in Announcement 2025-2.
Treasury and IRS now clarify in Announcement 2026-7 that the applicability date of these regulations will begin "no earlier than six months after the final regulations are published in the Federal Register."
Despite this additional delay, Treasury and the IRS continue to require that plan sponsors and taxpayers apply a reasonable, good-faith interpretation of the statutory provisions underlying these proposed amendments.
Those seeking to ensure their retirement plans are prepared for these changes are encouraged to consult Nelson Mullins' Employee Benefits and Executive Compensation attorneys.
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