The IRS has issued Notice 2022-53, which provides guidance regarding certain required minimum distributions (RMDs) from retirement plans for 2021 and 2022 (see Practice Note, Required Minimum Distributions from Retirement Plans).

The SECURE Act modified the post-death RMD requirements for defined contribution plans and IRAs by adding Internal Revenue Code Section 401(a)(9)(H), which limits the ability of beneficiaries to take distributions over a period not extending beyond the beneficiary's life expectancy (see Legal Update, Government Funding Legislation Includes the SECURE Act, Which Changes Retirement Plan Requirements: Plan Distributions and Practice Note, Required Minimum Distributions from Retirement Plans: SECURE Act Changes Post-Death Distributions for Defined Contribution Plans and IRAs). Now, if a participant in a defined contribution plan or IRA dies before their entire interest is distributed, the designated beneficiary generally must take the inherited interest within ten years of the participant's death (ten-year rule) (26 U.S.C. § 401(a)(9)(H)(i)). However, the ten-year rule does not apply if the distribution is made to an eligible designated beneficiary and certain conditions are met. This change is generally effective for distributions made for participants who die after December 31, 2019.

In February 2022, the IRS issued proposed regulations that would amend the RMD regulations to reflect the SECURE Act changes (87 Fed. Reg. 10504 (Feb. 24, 2022); see Legal Update, Proposed Required Minimum Distributions (RMD) Regulations Reflect SECURE Act Changes). Under the proposed regulations:

The proposed regulations would apply for distributions on or after January 1, 2022. In Notice 2022-53, the IRS announced that it intends to issue final regulations related to RMDs but that the regulations will not apply until the 2023 distribution calendar year, at the earliest.

In response to the proposed regulations, commenters indicated they had expected the ten-year rule to apply differently than what was set out in the proposed regulations (that is, no distributions would be required until the end of the ten-year period). Instead, the proposed regulations would require annual distributions, with the entire benefit needing to be distributed by the end of the ten-year period. As a result, some commenters who were beneficiaries of participants who died in 2020 did not take distributions in 2021 and were not sure if they needed to take distributions in 2022.

Notice 2022-53 states that final regulations regarding RMDs will not apply before the 2023 distribution calendar year.

Additionally, regarding RMDs for 2021 and 2022, the guidance provides that:

The guidance defines a specified RMD as a distribution that, under the proposed regulations, would be required to be made under a defined contribution plan or IRA that is subject to new Code Section 401(a)(9)(H), in 2021 or 2022 to a: