H.R. 8567 - Required Minimum Distribution Modernization Act of 2020

SEC. 2. INCREASE IN AGE FOR REQUIRED BEGINNING DATE FOR MANDATORY DISTRIBUTIONS.

(a) IN GENERAL. — Section 401(a)(9)(C)(i)(I) of the Internal Revenue Code of 1986 is amended by striking "age 72" and inserting "age 75".

(b) SPOUSE BENEFICIARIES; SPECIAL RULE FOR OWNERS. — Subparagraphs (B)(iv)(I) and (C)(ii)(I) of section 401(a)(9) of such Code are each amended by striking "age 72" and inserting "age 75".

(c) CONFORMING AMENDMENTS. — The last sentence of section 408(b) of such Code is amended by striking "age 72" and inserting "age 75".

(d) EFFECTIVE DATE. — The amendments made by this section shall apply to distributions required to be made after December 31, 2020, with respect to individuals who attain age 72 after such date.

SEC. 3. EXEMPTION FROM REQUIRED MINIMUM DISTRIBUTION RULES FOR INDIVIDUALS WITH CERTAIN ACCOUNT BALANCES.

(a) IN GENERAL. — Section 401(a)(9) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:

"(J) EXCEPTION FROM REQUIRED MINIMUM DISTRIBUTIONS DURING LIFE OF EMPLOYEE WHERE ASSETS DO NOT EXCEED $100,000. —

"(i) IN GENERAL. — If, as of a measurement date, the aggregate value of an employee's entire interest under all defined contribution plans does not exceed $100,000, then, during any succeeding calendar year beginning before the next measurement date, the requirements of subparagraph (A) shall not apply with respect to such employee.

"(ii) DEFINED CONTRIBUTION PLAN. — For purposes of this subparagraph, the term 'defined contribution plan' has the same meaning as when used in subparagraph (H).

"(iii) LIMIT ON REQUIRED MINIMUM DISTRIBUTION. — The required minimum distribution determined under subparagraph (A) for an employee under all defined contribution plans shall not exceed an amount equal to the excess of —

"(I) the aggregate value of an employee's entire interest under such plans on the last day of the calendar year to which such distribution relates, over

"(II) the dollar amount in effect under clause (i) for such calendar year.

The Secretary in regulations or other guidance may provide how such amount shall be distributed in the case of an individual with more than one defined contribution plan.

"(iv) MEASUREMENT DATE. — For purposes of this subparagraph, the term 'measurement date' means, with respect to any employee —

"(I) the last day of the calendar year preceding the calendar year in which the employee attains age 75, and

"(II) in the case of any employee who (after a measurement date determined under subclause (I) with respect to such employee) receives contributions, rollovers, or transfers of amounts that were not previously taken into account in applying this subparagraph, the last day of the calendar year in which such contribution, rollover, or transfer was so received.

"(v) INFLATION ADJUSTMENT. — In the case of any calendar year beginning after 2020, the $100,000 amount in clause (i) shall be increased by an amount equal to —

"(I) such dollar amount, multiplied by

"(II) the cost of living adjustment determined under section 1(f)(3) for the calendar year, determined by substituting 'calendar year 2019' for 'calendar year 2016' in subparagraph (A)(ii) thereof.

Any increase determined under this clause shall be rounded to the next lowest multiple of $5,000.

"(vi) PLAN ADMINISTRATOR RELIANCE ON EMPLOYEE CERTIFICATION. — A defined contribution plan described in clause (iii), (iv), (v), or (vi) of section 402(c)(8)(B) shall not be treated as failing to meet the requirements of this paragraph in the case of any failure to make a required minimum distribution for a calendar year if —

"(I) the aggregate value of an employee's entire interest under all defined contribution plans of the employer on the last day of the calendar year to which such distribution relates does not exceed the dollar amount in effect for such year under clause (i), and

"(II) the employee certifies that the aggregate value of the employee's entire interest under all defined contribution plans on the most recent measurement date with respect to the employee (as determined by the employee based on guidance provided by the Secretary) did not exceed the dollar amount in effect for such year under clause (i).

"(vii) AGGREGATION RULE. — All employers treated as a single employer under subsection (b), (c), (m), or (o) of section 414 shall be treated as a single employer for purposes of clause (v).".

(b) PLAN ADMINISTRATOR REPORTING. — Section 6047 of such Code is amended by redesignating subsection (h) as subsection (i) and by inserting after subsection (g) the following new subsection:

"(h) ACCOUNT BALANCE FOR PARTICIPANTS WHO HAVE ATTAINED AGE 74. —

"(1) IN GENERAL. — Not later than January 31 of each year, the plan administrator (as defined in section 414(g)) of each defined contribution plan (as defined in section 401(a)(9)(J)) shall make a return to the Secretary with respect to each participant of such plan who has attained age 74 as of the end of the preceding calendar year which states —

"(A) the name and plan number of the plan,

"(B) the name and address of the plan administrator,

"(C) the name, address, and taxpayer identification number of the participant, and

"(D) the account balance of such participant as of the end of the preceding calendar year.

"(2) STATEMENT FURNISHED TO PARTICIPANT. — Every person required to make a return under paragraph (1) with respect to a participant shall furnish a copy of such return to such participant.

"(3) APPLICATION TO INDIVIDUAL RETIREMENT PLANS AND ANNUITIES. — In the case of an defined contribution plan described in clause (i) or (ii) of section 402(c)(8)(B) —

"(A) any reference in this subsection to the plan administrator shall be treated as a reference to the trustee or issuer, as the case may be, and

"(B) any reference in this subsection to the participant shall be treated as a reference to the individual for whom such account or annuity is maintained.".

(c) EFFECTIVE DATE. — The amendments made by this section shall apply to distributions required to be made in calendar years beginning more than 120 days after the date of the enactment of this Act.