The Setting Every Community Up for Retirement Enhancement
(SECURE) Act, passed and signed into law on December 20, 2019, is the first
piece of legislation to affect required minimum distributions (RMDs) since the Worker,
Retiree, and Employer Recovery Act of 2008 (WRERA), which eliminated RMD
requirements for 2009.

Beginning in 2020, there are two significant mandatory RMD
changes to qualified plans and traditional IRAs:

• A mandatory increase to age 72 from age 70-1/2 for the required beginning date for mandatory distributions (effective for distributions required to be made after December 31, 2019, for employees or participants who attain age 70-1/2 after December 31, 2019).
• A requirement that defined contribution (DC) plan (and IRA) distributions generally be made to non-spouse beneficiaries within 10 years of the death of the account holder (effective for RMDs to beneficiaries who die after December 31, 2019).

These changes do not affect participants currently in pay status.
For example, if a participant born prior to June 30, 1949, turned 70- prior to
December 31, 2019, that person is required to continue RMDs and must have the
first RMD for 2019 paid no later than April 1, 2020. RMDs will also continue in
2020 and 2021.

Note that, if an active participant turned 70- in 2019 but
was not required to take an RMD under the plan document; then that person's RMD
must follow the law and the Internal Revenue Service (IRS) regulations in
effect prior to the enactment of SECURE and RMDs will begin in the year of retirement
regardless of age. Participants who turn 70- in 2020 or later are under the
new age 72 regulation.

While not related to SECURE, note that the life expectancy tables used to calculate the RMDs have changed. The revised life expectancies are longer; therefore, the amounts participants and beneficiaries are required to receive, as RMDs will be lower. This change will not go into effect until 2021 at the earliest and is likely to result in a lower tax liability for RMD recipients (except for Roth accounts, for which distributions are tax-exempt).

These changes are mandatory under SECURE and are required to
be implemented effective January 1, 2020. Milliman is currently reviewing
procedures, and updating our recordkeeping systems to account for the legislative
change.

The SECURE Act does give plan sponsors a two-year delay in
amending the plan document. Amendments are not required before the last day of
the plan year that begins on or after January 1, 2022.

Please contact your Milliman consultant for additional details.