The SECURE Act Has Passed: How Does It Affect Our Clients?
By After months of sitting in committee in the Senate, the Setting Every Community Up for Retirement Enhancement Act (SECURE Act) has been added to one of the year-end appropriations bills and passed by Congress. Particularly with the change in required minimum distribution rules, the SECURE Act represents a significant change in the law surrounding qualified plans. This post summarizes some of the provisions most relevant to elder law attorneys. The summary is organized by section of the Act with the change in required distribution rules discussed first. The language of select sections is included at the end. Thank you to Larry Rocamora and Jason Page for their insights on the Act.
Section 401. Modification of Required Distribution Rules for Designated Beneficiaries
Section 401(a)(1) of the Act adds a new subsection (H) to 26 U.S.C. Section 401(a)(9) (IRC Section 401(a)(9)). For individuals dying on or after January 1, 2020, this Section creates a ten-year distribution period for most designated beneficiaries similar to the five-year period that has long been applied to non-designated beneficiaries. IRC §401(a)(9)(H)(i)(I). This is true whether or not the employee reached the required beginning date before death. IRC §401(a)(9)(H)(i)(II).