In Announcement 2026-7, the Internal Revenue Service (IRS) further delayed the application of certain required minimum distribution (RMD) proposed regulations until January 1, 2027, at the earliest. The delayed proposed regulations addressed certain changes to the RMD rules made by the SECURE 2.0 Act of 2022 (SECURE 2.0).
Background
SECURE 2.0 made significant changes to the RMD requirements, including increasing the age component of the required beginning date, offering surviving spouses the ability to elect to use the Uniform Lifetime Table to calculate RMDs (Spousal Election), excluding Roth amounts from RMD requirements (Roth Exemption), and eliminating penalties on partial annuitization (Partial Annuity Changes), and expanding availability of qualified longevity annuity contracts (QLACs).
On July 19, 2024, US Department of the Treasury issued final and proposed regulations covering changes made to the RMD statutory requirements by the Setting Every Community Up for Retirement Enhancement Act (SECURE 1.0) and SECURE 2.0. The final regulations covered many of these changes, such as the required beginning date changes. However, other changes were covered by proposed regulations. As originally published, both the final and proposed regulations were effective January 1, 2025.
Commentators raised issues with the IRS regarding certain aspects of the proposed regulations, which has now led to a delayed effective date for the provisions regarding the Spousal Election, the Roth Exemption, Partial Annuity Changes, and QLACs (collectively, Delayed RMD Regulatory Provisions). In addition, there are several other delayed provisions, including clarification about the applicable RMD age for participants born in 1959 (i.e., that it will be age 73, not 75), clarification about separate-interest treatment for the beneficiaries held in a see-through trust, and a conforming change to the Section 408 regulations addressing the treatment of corrective distributions for excise tax purposes.
Announcement 2026-7 delays the effective date until the first distribution calendar year that begins at least six months after the publication of final regulations. Since the final regulations have not been published as of the date of this post, the first affected distribution calendar year would be 2027 at the earliest, but may be later depending on the timing of the publication of the final regulations.
Importantly, Announcement 2026-7 does not delay the requirement to comply with the SECURE 1.0 and SECURE 2.0 RMD requirements, nor does it delay the requirement that certain terms need to be reflected in the plan document for calendar year plans by December 31, 2026. Until final regulations become applicable, plans should operate based on a reasonable, good-faith interpretation of the SECURE 2.0 statutory requirements with respect to the Delayed RMD Regulatory Provisions.
Takeaways
To the extent plan sponsors have not already done so, plan sponsors may wish to use the additional time provided by the delay to coordinate with recordkeepers on system readiness to implement any required or desired changes to address the Delayed RMD Regulatory Provisions. Plan sponsors should also document interim administrative positions to support reliance on the good-faith compliance standard and may wish to start preparing participant communications to address anticipated questions regarding the Delayed RMD Regulatory Provisions to the extent relevant.
How We Can Help
Our team is available to help plan sponsors and administrators navigate the RMD requirements, including evaluating interim good-faith compliance approaches, coordinating with recordkeepers, assessing operational readiness, and planning for future plan amendments. Please contact the authors of this blog post or your Morgan Lewis contacts with any questions or if we can assist in helping plans develop procedures to comply with the proposed and final regulations (once issued).