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Association Requests Delayed Effective Date for RMD Regs

MAY 25, 2022

Association Requests Delayed Effective Date for RMD Regs

DATED MAY 25, 2022
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May 25, 2022

CC:PA:LPD:PR (REG-105954-20)
Room 5203
Internal Revenue Service
P.O. Box 7604
Ben Franklin Station
Washington, DC 20044

Re: [REG-105954-20) RIN 1545-BP82: Notice of Proposed Rulemaking: Required Minimum Distributions

To Whom It May Concern:

The Insured Retirement Institute (IRI)1 appreciates the opportunity to provide these comments to the Department of the Treasury, Internal Revenue Service (IRS) in response to its Notice of Proposed Rulemaking on Required Minimum Distributions (the Proposed Rule)2. The Proposed Rule was developed to implement the updated Required Minimum Distribution (RMD) provisions as set forth in the Setting Every Community Up for Retirement Enhancement Act (SECURE Act)3, while also providing significant additional guidance. These comments follow review and consideration by IRI's members of the expansive and comprehensive provisions presented in the Proposed Rule. Our members continue to evaluate the specific rules and guidance enumerated in the Proposed Rule and would appreciate any opportunity from the IRS to continue discussion of issues identified in these comments, and on the Proposed Rule.

IRI received and reviewed the comments on the Proposed Rule by the Chamber of Commerce of the United States of America (the U.S. Chamber), as submitted. IRI submits these comments as an opportunity to support the U.S. Chamber's comments, and respectfully urge the IRS to consider the U.S. Chamber's requests and recommendations as they relate to the Proposed Rule.

Along with IRI's general support of the U.S. Chamber's comments, IRI has additional comments with respect to the effective dates regarding the RMD updates per the SECURE Act and as set forth in the Proposed Rule.

Effective Dates under the SECURE Act

Earlier this year, IRI signed on to a joint trades letter to the IRS dated March 25, 2022 (the joint trades letter)4, seeking to extend the effective dates of the Proposed Rule, and other related SECURE Act of 2019 implementation issues. The joint trades letter urged the Treasury Department and IRS to promptly issue guidance that (1) extends the deadline for amending qualified plan and IRA documents to reflect the SECURE Act's changes to the RMD rules, and (2) delays the effective date of the Proposed Rule on RMDs.

As set forth in the joint trades letter, IRI along with our fellow trade association signees noted the that the SECURE Act provides that qualified plans and IRAs must amend their governing documents to reflect the SECURE Act by the last day of the first plan year beginning on or after January 1, 2022, “or such later date as the Secretary of the Treasury may prescribe.”5

The joint trades letter observed that revising retirement plan and IRA governing documents requires extensive legal review and vetting, which is difficult in the absence of final rules to implement the statutory provisions of the SECURE Act. In addition, insurance companies issuing annuity contracts typically must obtain approval from state insurance regulators prior to amending their forms to conform with the SECURE Act.

The joint trades letter concluded that the current effective dates set forth under the SECURE Act would not provide our members with a reasonable or feasible timeframe to cover the process of amending their governing documents until final regulations are available.

Effective Dates under the Proposed Rule:

Reaffirming our comments from the joint trades letter on the effective dates as to the Proposed Rule, we reiterate that the Proposed Rule sets forth that they apply to RMDs for 2022. The Proposed Rule also incorporates new rules regarding rollovers (including required tax withholding) to apply retroactively to distributions made after 2021. The effective dates as currently set forth in the Proposed Rule should be delayed until the first calendar year beginning at least nine months after final regulations are issued, and relief for reasonable, good faith interpretations should apply until then.

* * * * *

Thank you again for the opportunity to provide these comments. If you have questions about any of our comments on the Proposed Rule, or if we can be of any further assistance in connection with this important regulatory effort, please feel free to contact the undersigned at emicale@irionline.org.

Sincerely,

Emily Micale
Director, Federal Regulatory Affairs
Insured Retirement Institute
Washington, DC

FOOTNOTES

1The Insured Retirement Institute (IRI) is the leading association for the entire supply chain of insured retirement strategies, including life insurers, asset managers, broker-dealers, banks, marketing organizations, law firms, and solution providers. IRI members account for 90 percent of annuity assets in the U.S., include the foremost distributors of protected lifetime income solutions, and are represented by financial professionals serving millions of Americans. IRI champions retirement security for all through leadership in advocacy, awareness, research, and the advancement of digital solutions within a collaborative industry community.

287 FR 10504 (Feb. 24, 2022).

3Pub. L. 116–94, Section 114 et seq.

5SECURE Act § 601. The deadline for certain collectively bargained and governmental plans is two years later. See also Notice 2020-68 § G-1 (confirming that the first deadline applies to IRAs).

END FOOTNOTES

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