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SECURE Act: Plan Amendment Options

The SECURE Act was signed into law on December 20, 2019. Your plan will require an amendment prior to the end of your 2022 plan year. Below are provisions that you will be able to elect in the plan amendment:

  • Qualified Birth or Adoption Distribution (“QBAD”): A Participant may request a distribution of up to $5,000 (per child or Eligible Adoptee) as a QBAD. This $5,000 limit shall be reduced by QBADs made with respect to the same child or Eligible Adoptee by other plans maintained by the Employer or a related employer described in Code §414(b), (c), (m), or (o).

A QBAD must be made during the 1-year period beginning of the date on which a child of the Participant is born or on which the legal adoption of an Eligible Adoptee by the Participant is finalized.  An “Eligible Adoptee” is an individual, other than a child of the Participant’s spouse, who has not attained age 18 or is physically or mentally incapable of self-support.

If your Plan permits rollover contributions, a Participant receiving one or more QBADs from this plan may make one or more contributions in an aggregate amount not to exceed the amount of such QBADs.  The Plan will treat such contributions as rollover contributions. 

  • Distribution of Required Minimum Distributions (“RMDs”) required to be made after December 31, 2019: An Affected Participant’s Required Beginning Date (“RBD”) shall not be earlier than April 1 of the calendar year following the year the Affected Participant attains age 72.  For purposes of determining an Affected Participant’s RBD, an Affected Participant will be treated as a more than 5% owner if he or she was a 5-percent owner (as defined in Code §416(i)(B)) as to the Plan Year ending in the calendar year the Participant attains age 72.

If an Affected Participant (born after June 30, 1949) dies prior to the Participant’s RBD, and the Participant’s sole Designated Beneficiary is the Participant’s surviving spouse, then the RMDs to the surviving spouse will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died, or by December 31 of the calendar year in which the Participant would have attained age 72, if later.

  • If you sponsor a Money Purchase Plan or Defined Benefit Plan, in-service distributions may be amended from age 62 to age 59 ½.

If you utilize our document services, WR will be adopting the IRS required interim amendment on your behalf and communicate with you directly.  If another provider prepares your plan document, please forward a copy of the amendment to your Watkins Ross representative, when available.

 

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