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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 1, 31, and 54
[TD 10001]
RIN 1545–BP82

Required Minimum Distributions
Internal Revenue Service (IRS),
Treasury.
ACTION: Final regulations.
AGENCY:

This document sets forth final
regulations relating to required
minimum distributions from qualified
plans; section 403(b) annuity contracts,
custodial accounts, and retirement
income accounts; individual retirement
accounts and annuities; and certain
eligible deferred compensation plans.
These regulations affect administrators
of, and participants in, those plans;
owners of individual retirement
accounts and annuities; employees for
whom amounts are contributed to
section 403(b) annuity contracts,
custodial accounts, or retirement
income accounts; and beneficiaries of
those plans, contracts, accounts, and
annuities.
DATES:
Effective date: These regulations are
effective on September 17, 2024.
Applicability date: Amended
§§ 1.401(a)(9)–1 through 1.401(a)(9)–9,
1.403(b)–6(e), and 1.408–8 apply for
purposes of determining required
minimum distributions for calendar
years beginning on or after January 1,
2025. Amended § 1.402(c)–2 applies for
distributions on or after January 1, 2025.
Amended § 54.4974–1 applies for
taxable years beginning on or after
January 1, 2025.
FOR FURTHER INFORMATION CONTACT:
Brandon M. Ford at (202) 317–6700 (not
a toll-free number).
SUPPLEMENTARY INFORMATION:

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SUMMARY:

Background
This document sets forth amendments
to the Income Tax Regulations (26 CFR
part 1) under section 401(a)(9) of the
Internal Revenue Code of 1986 (Code).
These regulations address the required
minimum distribution requirements for
plans qualified under section 401(a) and
update the regulations to reflect the
amendments made to section 401(a)(9)
by sections 114 and 401 of the Setting
Every Community Up for Retirement
Enhancement Act of 2019 (SECURE
Act), enacted on December 20, 2019, as
Division O of the Further Consolidated
Appropriations Act, 2020, Public Law
116–94, 133 Stat. 2534 (2019) and by

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various sections of the SECURE 2.0 Act
of 2022 (SECURE 2.0 Act), enacted on
December 29, 2022, as Division T of the
Consolidated Appropriations Act, 2023,
Public Law 117–328, 136 Stat. 4459
(2022).
The rules of section 401(a)(9) are
adopted by reference in section
408(a)(6) and (b)(3) for individual
retirement accounts and individual
retirement annuities (collectively, IRAs);
section 403(b)(10) for annuity contracts,
custodial accounts, and retirement
income accounts described in section
403(b) (section 403(b) plans); and
section 457(d)(2) for eligible deferred
compensation plans. The determination
of the required minimum distribution is
also relevant for purposes of the related
excise tax under section 4974 and the
definition of eligible rollover
distribution in section 402(c).
Accordingly, this document also sets
forth conforming amendments to the
Income Tax Regulations (26 CFR part 1)
under sections 402(c), 403(b), 408, and
457, and to the Pension Excise Tax
Regulations (26 CFR part 54) under
section 4974.
Section 401(a)(9)—Required Minimum
Distributions
Section 401(a)(9) provides rules for
distributions from a qualified plan
during the life of the employee in
section 401(a)(9)(A) and after the death
of the employee in section 401(a)(9)(B).
The rules set forth a required beginning
date for distributions and identify the
period over which the employee’s entire
interest must be distributed.
Specifically, section 401(a)(9)(A)(ii)
provides that the entire interest of an
employee in a qualified plan must be
distributed, beginning not later than the
employee’s required beginning date, in
accordance with regulations, over the
life of the employee or over the lives of
the employee and a designated
beneficiary (or over a period not
extending beyond the life expectancy of
the employee and a designated
beneficiary). Section 401(a)(9)(B)(i)
provides that, if the employee dies after
distributions have begun, the
employee’s remaining interest must be
distributed at least as rapidly as under
the distribution method used by the
employee as of the date of the
employee’s death (referred to in this
preamble as the ‘‘at least as rapidly’’
rule).
Section 401(a)(9)(B)(ii) and (iii)
provides that, if the employee dies
before required minimum distributions
have begun, the employee’s interest
must either be: (1) distributed within
5years after the death of the employee;
or (2) distributed (in accordance with

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regulations) over the life or life
expectancy of the designated beneficiary
with the distributions generally
beginning not later than 1 year after the
date of the employee’s death.
However, under section
401(a)(9)(B)(iv) (as amended by section
327 of the SECURE 2.0 Act), a surviving
spouse may elect to: (1) be treated as if
the surviving spouse were the employee
for purposes of section
401(a)(9)(B)(iii)(II); (2) wait until the
date the employee would have attained
the applicable age (as defined in section
401(a)(9)(C)(v)) to begin taking required
minimum distributions; and (3) have the
beneficiaries of the surviving spouse be
treated as beneficiaries of the employee
if the surviving spouse dies before
distributions to the spouse begin.
Section 401(a)(9)(C)(i) (as amended by
section 114 of the SECURE Act and
further amended by section 107 of the
SECURE 2.0 Act) defines the required
beginning date for an employee (other
than a 5-percent owner or IRA owner)
as April 1 of the calendar year following
the later of the calendar year in which
the employee attains the applicable age
or the calendar year in which the
employee retires. Section
401(a)(9)(C)(v)(I) provides that in the
case of an individual who attains age 72
after December 31, 2022, and age 73
before January 1, 2033, the applicable
age is 73. Section 401(a)(9)(C)(v)(II)
provides that in the case of an
individual who attains age 74 after
December 31, 2032, the applicable age is
75. For a 5-percent owner or an IRA
owner, the required beginning date is
April 1 of the calendar year following
the calendar year in which the
individual attains the applicable age,
even if the individual has not retired.
Section 401(a)(9)(C)(iii) provides that
certain employees who commence
benefits under a defined benefit plan
after the year in which they attain age
701⁄2 must receive an actuarial increase.
However, section 401(a)(9)(C)(iv)
provides that the actuarial increase
requirement does not apply for a
governmental plan or for a church plan
(as defined in section 401(a)(9)(C)(iv)).
Section 401(a)(9)(D) provides that
(except in the case of a life annuity) the
life expectancy of an employee and the
employee’s spouse (used to measure the
period over which payments must be
made) may be redetermined, but not
more frequently than annually.
Section 401(a)(9)(E)(i) defines the
term designated beneficiary as any
individual designated as a beneficiary
by the employee. Section 401(a)(9)(E)(ii)
(which was added to the Code as part
of section 401 of the SECURE Act)
defines the term eligible designated

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beneficiary, with respect to any
employee, as any designated beneficiary
who, as of the date of the employee’s
death, is: (1) the surviving spouse of the
employee; (2) a child of the employee
who has not reached the age of majority
(within the meaning of section
401(a)(9)(F)); (3) disabled (within the
meaning of section 72(m)(7)); (4) a
chronically ill individual (within the
meaning of section 7702B(c)(2), subject
to certain exceptions); or (5) an
individual not described elsewhere in
section 401(a)(9)(E)(ii) who is not more
than 10 years younger than the
employee.
Section 401(a)(9)(E)(iii) provides that,
subject to the rule in section
401(a)(9)(F), the treatment of an
employee’s child as an eligible
designated beneficiary ends when the
child attains the age of majority and that
any remaining interest must be
distributed within 10 years of that date.
Section 401(a)(9)(F) provides that, under
regulations, any amount paid to a child
is treated as if it had been paid to the
surviving spouse if it will become
payable to the surviving spouse upon
that child reaching the age of majority
(or other designated event permitted
under regulations).
Section 401(a)(9)(G) provides that any
distribution required to satisfy the
incidental death benefit requirement of
section 401(a) is treated as a required
minimum distribution.
Section 401(a)(9)(H) (which was
added to the Code as part of section 401
of the SECURE Act) provides special
rules that generally apply to the
distribution of an employee’s remaining
interest in a defined contribution plan
after the death of that employee.
Specifically, section 401(a)(9)(H)(i)
provides that, except in the case of a
beneficiary who is not a designated
beneficiary, section 401(a)(9)(B)(ii): (1)
is applied by substituting 10 years for 5
years; and (2) applies whether or not
distributions of the employee’s interest
have begun in accordance with section
401(a)(9)(A). Section 401(a)(9)(H)(ii)
provides that section 401(a)(9)(B)(iii)
(permitting payments over the life or life
expectancy of the designated beneficiary
as an alternative to the 10-year rule)
applies only in the case of an eligible
designated beneficiary. Section
401(a)(9)(H)(iii) provides that if an
eligible designated beneficiary dies
before that individual’s portion of the
employee’s interest in the plan has been
entirely distributed, then section
401(a)(9)(H)(ii) does not apply to the
beneficiary of the eligible designated
beneficiary, and the remainder of that
portion must be distributed within 10

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years after the death of the eligible
designated beneficiary.
Section 401(a)(9)(H)(iv) provides that
in the case of an applicable multibeneficiary trust, if, under the terms of
the trust, it is to be divided immediately
upon the death of the employee into
separate trusts for each beneficiary, then
section 401(a)(9)(H)(ii) is applied
separately with respect to the portion of
the employee’s interest that is payable
to any disabled or chronically ill eligible
designated beneficiary. Section
401(a)(9)(H)(iv) (as amended by section
337 of the SECURE 2.0 Act) also
provides that in the case of an
applicable multi-beneficiary trust, if,
under the terms of the trust, no
beneficiary (other than an eligible
designated beneficiary who is disabled
or chronically ill) has any right to the
employee’s interest in the plan until the
death of all of those disabled or
chronically ill eligible designated
beneficiaries with respect to the trust,
then: (1) section 401(a)(9)(B)(iii)
(permitting payments over the life
expectancy of a beneficiary) will apply
to the distribution of the employee’s
interest; and (2) any beneficiary who is
not disabled or chronically ill will be
treated as a beneficiary of the eligible
designated beneficiary who is disabled
or chronically ill upon the death of that
eligible designated beneficiary.
Section 401(a)(9)(H)(v) (as amended
by section 337 of the SECURE 2.0 Act)
defines the term applicable multibeneficiary trust as a trust: (1) that has
more than one beneficiary; (2) all of the
beneficiaries of which are treated as
designated beneficiaries for purposes of
determining the distribution period
pursuant to section 401(a)(9); and (3) at
least one of the beneficiaries of which
is an eligible designated beneficiary
who is either disabled or chronically ill.
Section 401(a)(9)(H)(v) also provides
that, for purposes of that definition, in
the case of a trust described in section
401(a)(9)(H)(iv)(II), any beneficiary
which is an organization described in
section 408(d)(8)(B)(i) is treated as a
designated beneficiary.
Section 401(a)(9)(H)(vi) provides that,
for purposes of applying section
401(a)(9)(H), an eligible retirement plan
defined in section 402(c)(8)(B) (other
than a defined benefit plan described in
section 402(c)(8)(B)(iv) or (v) 1 or a
qualified trust that is a part of a defined
1 The eligible retirement plans described in
sections 402(c)(8)(B)(iv) and (v) are an annuity plan
described in section 403(a) and an eligible deferred
compensation plan described in section 457(b) that
is maintained by an eligible employer described in
section 457(e)(1)(A), respectively.

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58887

benefit plan) is treated as a defined
contribution plan.
Section 401(a)(9)(J) (which was added
to the Code by section 201 of the
SECURE 2.0 Act) provides that a
commercial annuity (within the
meaning of section 3405(e)(6)) that is
issued in connection with any eligible
retirement plan (within the meaning of
section 402(c)(8)(B), other than a
defined benefit plan) is not prohibited
from making any of the following types
of payments: (1) annuity payments that
increase by a constant percentage,
applied not less frequently than
annually, at a rate that is less than 5
percent per year; (2) certain lump sum
payments; 2 (3) an amount which is in
the nature of a dividend or similar
distribution, provided that the issuer of
the contract determines the amount
using reasonable actuarial methods and
assumptions, as determined in good
faith by the issuer of the contract, when
calculating the initial annuity payments
and the issuer’s experience with respect
to those factors; or (4) a final payment
upon death that does not exceed the
excess of the total amount of the
consideration paid for the annuity
payments, less the aggregate amount of
prior distributions or payments from or
under the contract.
Effective Date of SECURE Act Section
401
Generally, under section 401(b)(1) of
the SECURE Act, the amendments made
by section 401 of the SECURE Act to
section 401(a)(9)(E) and (H) of the Code
apply to distributions with respect to
employees who die after December 31,
2019.
Section 401(b)(2) of the SECURE Act
provides that in the case of a plan
maintained pursuant to one or more
collective bargaining agreements
between employee representatives and
one or more employers ratified before
December 20, 2019, the amendments to
section 401(a)(9)(E) and (H) of the Code
apply to distributions with respect to
employees who die in calendar years
beginning after December 31, 2021, or if
earlier, the later of: (1) December 31,
2019; and (2) the date on which the last
2 Section 401(a)(9)(J)(ii) provides that the lump
sum payment must either: (1) result in a shortening
of the payment period with respect to an annuity
or a full or partial commutation of the future
annuity payments, provided that such lump sum is
determined using reasonable actuarial methods and
assumptions, as determined in good faith by the
issuer of the contract; or (2) accelerate the receipt
of annuity payments that are scheduled to be
received within the ensuing 12 months, regardless
of whether the acceleration shortens the payment
period with respect to the annuity, reduces the
dollar amount of benefits to be paid under the
contract, or results in a suspension of annuity
payments during the period being accelerated.

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of the collective bargaining agreements
terminated, without regard to any
extension agreed to on or after the date
of enactment of the SECURE Act
(December 20, 2019).
Section 401(b)(3) of the SECURE Act
provides that, in the case of a
governmental plan (as defined in
section 414(d) of the Code), the
amendments to section 401(a)(9)(E) and
(H) apply to distributions with respect
to employees who die after December
31, 2021.
Section 401(b)(4) of the SECURE Act
provides that the amendments made to
section 401(a)(9)(E) and (H) of the Code
do not apply to a qualified annuity that
is a binding annuity contract in effect on
the date of enactment of the SECURE
Act (December 20, 2019) and at all times
thereafter.3
Section 401(b)(5) of the SECURE Act
provides that if an employee dies before
the effective date of section 401(a)(9)(H)
of the Code for a plan, then, in applying
the amendments made to section
401(a)(9)(E) and (H) to the employee’s
designated beneficiary who dies on or
after the effective date, (1) the
amendments apply to any beneficiary of
the designated beneficiary, and (2) the
designated beneficiary is treated as an
eligible designated beneficiary for
purposes of section 401(a)(9)(H)(ii).

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SECURE 2.0 Act Provisions
Prior to amendment by section 107 of
the SECURE 2.0 Act, section
401(a)(9)(C) of the Code defined the
required beginning date by reference to
the calendar year in which the
employee attains age 72. Section 107 of
the SECURE 2.0 Act changes the age by
3 Section 401(b)(4)(B) of the SECURE Act
provides that the term qualified annuity means,
with respect to an employee, an annuity—
(i) which is a commercial annuity (as defined in
section 3405(e)(6) of the Internal Revenue Code of
1986);
(ii) under which the annuity payments are made
over the life of the employee or over the joint lives
of such employee and a designated beneficiary (or
over a period not extending beyond the life
expectancy of such employee or the joint life
expectancy of such employee and a designated
beneficiary) in accordance with the regulations
described in section 401(a)(9)(A)(ii) of such Code
(as in effect before such amendments) and which
meets the other requirements of section 401(a)(9) of
such Code (as so in effect) with respect to such
payments; and
(iii) with respect to which—
(I) annuity payments to the employee have begun
before the date of enactment of the SECURE Act,
and the employee has made an irrevocable election
before such date as to the method and amount of
the annuity payments to the employee or any
designated beneficiaries; or
(II) if subclause (I) does not apply, the employee
has made an irrevocable election before the date of
enactment of the SECURE Act as to the method and
amount of the annuity payments to the employee
or any designated beneficiaries.

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reference to which the required
beginning date is determined from 72 to
either 73 or 75 (depending on an
employee’s date of birth). Section 107(e)
of the SECURE 2.0 Act provides that the
amendments made by section 107 of the
SECURE 2.0 Act apply to distributions
required to be made after December 31,
2022, with respect to individuals who
attain age 72 after that date.
Section 202 of the SECURE 2.0 Act
instructs the Secretary of the Treasury
(or that person’s delegate) to make
certain amendments to § 1.401(a)(9)–6.
Those amendments are: (1) to eliminate
the requirement that premiums for an
individual’s qualifying longevity
annuity contracts (QLACs) be limited to
25-percent of an individual’s account
balance; (2) to increase the dollar
limitation on premiums for an
individual’s QLACs from $125,000 to
$200,000 (adjusted for inflation); (3) to
provide that, in the case of a QLAC
purchased with joint and survivor
annuity benefits for an individual and
the individual’s spouse, a divorce
occurring after the original purchase
and before the date that the annuity
payments commence under the contract
will not affect the permissibility of the
joint and survivor benefits if certain
conditions related to an associated
qualified domestic relations order (or, if
applicable, a divorce or separation
agreement) are met; and (4) to provide
that a QLAC may include a provision
under which an employee may rescind
the purchase of the contract within a
period not exceeding 90 days from the
date of purchase.
Section 204 of the SECURE 2.0 Act
instructs the Secretary of the Treasury
(or that person’s delegate) to amend the
section 401(a)(9) regulations to provide
that if an employee’s benefit is in the
form of an individual account under a
defined contribution plan, then the plan
may allow the employee to elect to have
the amount required to be distributed
for a calendar year from that account to
be calculated as the excess of the total
required amount for that year over the
annuity amount for that year. For this
purpose, section 204(b)(1) of the
SECURE 2.0 Act defines the total
required amount with respect to a
calendar year as the amount that would
be required to be distributed under
§ 1.401(a)(9)–5 by including in the
balance of that account the value of all
annuity contracts that were purchased
with a portion of that account. Section
204(b)(2) of the SECURE 2.0 Act defines
the annuity amount with respect to a
calendar year as the total amount
distributed in that year from all annuity
contracts purchased with a portion of
the employee’s account under the plan.

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Section 204(c) of the SECURE 2.0 Act
instructs the Secretary of the Treasury
(or that person’s delegate) to make
conforming amendments to the
regulations that apply to individual
retirement plans (as defined in section
7701(a)(37) of the Code), section 403(b)
plans, and section 457(b) eligible
deferred compensation plans.
Section 325 of the SECURE 2.0 Act
amended section 402A of the Code
(relating to designated Roth accounts) to
add a new paragraph (d)(5) providing
that the rules requiring minimum
distributions to be paid during the
employee’s lifetime do not apply to a
designated Roth account. Section
325(b)(1) of the SECURE 2.0 Act
provides that this amendment applies to
taxable years beginning after December
31, 2023. However, section 325(b)(2) of
the SECURE 2.0 Act provides that the
amendment does not apply to a required
minimum distribution for a year
beginning before January 1, 2024, that is
permitted to be paid by April 1, 2024.
Section 402(c)—Rollovers
Section 402(c) of the Code provides
rules related to the rollover of a
distribution from a qualified plan to
another eligible retirement plan. Prior to
being amended by section 641 of the
Economic Growth and Tax Relief
Reconciliation Act of 2001, Public Law
107–16, 115 Stat. 38 (2001) (EGTRRA),
section 402(c)(2) of the Code limited the
portion of a distribution that could be
rolled over to the amount that would
have been includible in income in the
absence of the rollover. Section 641 of
EGTRRA and section 411(q) of the Job
Creation and Worker Assistance Act of
2002, Public Law 107–147, 116 Stat. 21
(2002), expanded the rollover rules to
permit a rollover to an IRA of the
portion of the distribution that would
have been excluded from gross income
in the absence of the rollover (that is,
the portion of the amount distributed
that consists of the employee’s
investment in the contract). In addition,
that portion may be transferred in a
direct trustee-to-trustee transfer to a
qualified trust or to an annuity contract
described in section 403(b) of the Code,
but only if the trust or annuity contract
separately accounts for the amount that
consists of the employee’s investment in
the contract. If only a portion of an
eligible rollover distribution is rolled
over or transferred, then the amount
rolled over or transferred is treated as
consisting first of the portion of the
distribution that is not allocable to the
employee’s investment in the contract.
Under section 402(c), any amount
distributed from a qualified plan
generally will be excluded from income

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if it is transferred to an eligible
retirement plan no later than the 60th
day following the day the distribution is
received. Section 402(c)(3)(B) was
added to the Code by section 644 of
EGTRRA to provide that the Secretary
may waive the 60-day rollover
requirement in certain circumstances.
Section 402(c)(3)(C) was added to the
Code by section 13613 of the Tax Cuts
and Jobs Act, Public Law 115–97, 131
Stat. 2054 (2017) (TCJA), to provide an
extended rollover deadline for qualified
plan loan offset (QPLO) amounts.4
Specifically, the deadline for rollover of
any portion of a QPLO amount is
extended so that it ends no earlier than
the distributee’s tax filing due date
(including extensions) for the taxable
year in which the offset occurs.
Subject to certain exclusions, section
402(c)(4) provides that an eligible
rollover distribution means any
distribution to an employee of all or any
portion of the balance to the credit of
the employee in a qualified plan.
Section 402(c)(4)(A) excludes from the
definition of an eligible rollover
distribution any distribution that is one
of a series of substantially equal
periodic payments payable for the life
(or life expectancy) of the employee (or
the employee and the employee’s
designated beneficiary), or for a
specified period of 10 years or more.
Section 402(c)(4)(B) provides that any
distribution that is required under
section 401(a)(9) is excluded from the
definition of an eligible rollover
distribution. Section 402(c)(4)(C), which
was added to the Code by section
636(b)(1) of EGTRRA, excludes hardship
distributions from the definition of an
eligible rollover distribution.
Prior to being amended by section 641
of EGTRRA, section 402(c)(8)(B) of the
Code provided that the only type of
eligible retirement plan permitted to
receive a rollover from a qualified plan
was another qualified plan or an IRA.
Section 641 of EGTRRA amended
section 402(c)(8)(B) of the Code to
expand the list of retirement plans
eligible to receive rollovers to include
an annuity contract described in section
403(b), and an eligible deferred
compensation plan described in section
457(b) that is maintained by an eligible
employer described in section
457(e)(1)(A). Section 617(c) of EGTRRA
amended section 402(c)(8)(B) of the
4 A QPLO amount is defined in section
402(c)(3)(C)(ii) as a plan loan offset amount that is
distributed from a qualified employer plan to a
participant or beneficiary solely by reason of (1) the
termination of the qualified employer plan, or (2)
the failure to meet the repayment terms of the loan
from the plan because of the severance from
employment of the participant.

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Code to provide that if any portion of an
eligible rollover distribution is
attributable to distributions from a
designated Roth account (as defined in
section 402A), that portion may be
rolled over only to another designated
Roth account or a Roth IRA (as
described in section 408A). Section 641
of EGTRRA also added section
402(c)(10) to the Code to provide that an
eligible deferred compensation plan
described in section 457(b) maintained
by an eligible employer described in
section 457(e)(1)(A) may accept
rollovers from a different type of eligible
retirement plan only if it separately
accounts for the amounts rolled into the
plan.
Section 402(c)(9) provides that, if any
distribution attributable to an employee
is paid to the spouse of the employee
after the employee’s death, then section
402(c) applies to that distribution in the
same manner as if the spouse were the
employee. At the time section 402(c)(9)
was enacted, a surviving spouse was
permitted to roll over an eligible
rollover distribution only to an IRA.
However, section 641 of EGTRRA
amended section 402(c)(9) of the Code
to expand the type of eligible retirement
plan permitted to receive a spousal
rollover to include not just an IRA, but
also any other eligible retirement plan.
Section 402(c)(11) was added to the
Code by section 829 of the Pension
Protection Act of 2006, Public Law 109–
280, 120 Stat. 780 (2006) (PPA), to
provide that an individual who is not
the surviving spouse of the employee
and who is a designated beneficiary (as
defined by section 401(a)(9)(E) of the
Code) may elect to have any portion of
a distribution made in the form of a
direct trustee-to-trustee transfer to an
IRA established for the purpose of
receiving that distribution. If a direct
trustee-to-trustee transfer is made
pursuant to section 402(c)(11), then the
required minimum distribution rules
applicable to distributions after the
employee’s death in section 401(a)(9)(B)
(other than section 401(a)(9)(B)(iv)) will
apply to the IRA. Section 402(c)(11)(B)
provides that the Secretary may
prescribe rules under which a trust for
the benefit of one or more designated
beneficiaries may be treated as a
designated beneficiary for purposes of
section 402(c)(11).
The rollover rules of section 402(c)
also apply to a distribution from a
section 403(a) qualified annuity plan, a
section 403(b) plan, and an eligible
deferred compensation plan described
in section 457(b) maintained by an
eligible employer described in section
457(e)(1)(A). See sections 403(a)(4)(B),

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403(b)(8)(B), and 457(e)(16)(B),
respectively.
Sections 403(a), 403(b), 408, and 457—
Other Arrangements Subject to Section
401(a)(9)
Under section 403(a)(1), a qualified
annuity plan under section 403(a) must
meet the requirements of section
404(a)(2) (which provides that an
annuity plan must satisfy the required
minimum distribution rules under
section 401(a)(9)). Sections 403(b)(10),
408(a)(6), and 408(b)(3) provide that a
section 403(b) plan, an individual
retirement account, and an individual
retirement annuity, respectively, must
satisfy rules similar to the requirements
of section 401(a)(9) and the incidental
death benefit requirements of section
401(a). Under section 457(b)(5) and
(d)(2), a plan is an eligible deferred
compensation plan described in section
457(b) only if it satisfies the minimum
distribution requirements of section
401(a)(9).
Section 4974—Excise Tax on Failure To
Satisfy Section 401(a)(9)
Section 4974(a) (as amended by
section 302(a) of the SECURE 2.0 Act)
provides that if the amount distributed
during the taxable year of a payee under
any qualified retirement plan (as
defined in section 4974(c)) or any
eligible deferred compensation plan (as
defined in section 457(b)) is less than
that taxable year’s minimum required
distribution (as defined in section
4974(b)), then an excise tax is imposed
on the payee equal to 25 percent of the
amount by which the minimum
required distribution for the taxable year
exceeds the amount actually distributed
in that taxable year.
Section 4974(d) provides that if the
taxpayer establishes to the satisfaction
of the Secretary that the failure to
distribute the entire amount required in
a taxable year was due to reasonable
error and reasonable steps are being
taken to remedy that shortfall, then the
Secretary may waive the excise tax
imposed in section 4974(a) for that
taxable year.
Section 4974(e) (as added to the Code
by section 302(b) of the SECURE 2.0
Act) provides that in the case of a
taxpayer who, by the last day of the
correction window: (1) receives a
distribution from the qualified
retirement plan or eligible deferred
compensation plan of the amount by
which the required minimum
distribution exceeds the actual amount
distributed during the calendar year
from that plan (the shortfall); and (2)
submits a return reflecting that tax (as
modified by section 4974(e)), then the

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tax imposed under section 4974(a) is 10
percent of the shortfall (in lieu of 25
percent). For this purpose, the
correction window ends on the earliest
of: (1) the date a notice of deficiency
under section 6212 with respect to the
tax imposed by section 4974(a) is
mailed; (2) the date on which the tax
imposed by section 4974(a) is assessed;
or (3) the last day of the second taxable
year that begins after the end of the
taxable year in which the tax under
section 4974(a) is imposed.

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Good Faith Compliance Standard for
Governmental Plans
Section 823 of PPA provides that a
governmental plan (as defined in
section 414(d) of the Code) is treated as
having complied with section 401(a)(9)
if the plan complies with a reasonable,
good faith interpretation of section
401(a)(9).
2002 Final Regulations and Other
Published Guidance
Final regulations relating to required
minimum distributions from a qualified
plan, an IRA, and a section 403(b) plan
have been subject to a series of
amendments and additions since they
were published in the Federal Register
on April 17, 2002 (67 FR 18834)
(referred to in this preamble as the
‘‘2002 final regulations’’). Final
regulations relating to required
minimum distributions from defined
benefit plans and annuity contracts
were published in the Federal Register
on June 15, 2004 (69 FR 63288) (referred
to in this preamble as the ‘‘2004 final
regulations’’). Final regulations
published in the Federal Register on
September 8, 2009 (74 FR 45993)
updated the rules to permit a
governmental plan to comply with the
required minimum distribution rules
using a reasonable, good faith
interpretation of section 401(a)(9). Final
regulations relating to qualifying
longevity annuity contracts were
published in the Federal Register on
July 2, 2014 (79 FR 37633). Final
regulations published in the Federal
Register on November 12, 2020 (85 FR
72472) updated the life expectancy and
distribution period tables for
distribution calendar years that begin on
or after January 1, 2022.
Final regulations relating to section
402(c) and eligible rollover distributions
were published in the Federal Register
on September 22, 1995 (60 FR 49199).
Since those regulations were issued,
section 402(c) has been amended several
times, and guidance related to those
amendments has generally been issued
in the Internal Revenue Bulletin rather
than through the issuance of new

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regulations. For example, Notice 2007–
7, 2007–1 CB 395, provided guidance
related to the amendments to section
402(c) made by PPA. However, final
regulations related to the extended
period of time to roll over a QPLO
amount under section 402(c)(3)(C) were
published in the Federal Register on
January 6, 2021 (86 FR 464). See
§ 1.402(c)–3.
Proposed Regulations and Enactment of
SECURE 2.0 Act
Proposed regulations under section
401(a)(9) and related statutory
provisions were published in the
Federal Register on February 24, 2022
(87 FR 10504).5 Comments were
received on the proposed regulations,
and a public hearing was held on June
15, 2022. After the close of the comment
period, the SECURE 2.0 Act, which
affected many of the provisions
included in the proposed regulations
was enacted.
After consideration of the comments
and taking into account the enactment
of the SECURE 2.0 Act, the proposed
regulations are adopted by this Treasury
decision with certain changes described
in the section of this preamble entitled
‘‘Summary of Comments and
Explanation of Revisions.’’ Some of the
rules in these final regulations that
reflect provisions of the SECURE 2.0 Act
are a clear application of statutory
language for which it is unnecessary to
solicit comments (see 5 U.S.C. 553(b)).
Other rules in these final regulations are
the logical outgrowth of rules in the
proposed regulations that take into
account both the comments received on
those proposed rules and the
subsequent enactment of the SECURE
2.0 Act. A notice of proposed
rulemaking (REG–103529–23) in the
Proposed Rules section of this issue of
the Federal Register sets forth proposed
rules that reflect other provisions of the
SECURE 2.0 Act relating to section
401(a)(9) of the Code.
Summary of Comments and
Explanation of Revisions
These regulations update several
existing regulations under sections
401(a)(9), 402(c), 403(b), 457, and 4974
to reflect statutory amendments that
have been made since those regulations
were last issued and to clarify certain
issues that have been raised in public
comments and private letter ruling
requests. These regulations also replace
the question-and-answer format of the
existing regulations under sections
5 Correction notices were published in the
Federal Register with respect to the proposed
regulations on March 21, 2022 (87 FR 15907), and
May 20, 2022 (87 FR 39845).

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401(a)(9), 402(c), 408, and 4974 with a
standard format. Rules under the 2002
final regulations and the 2004 final
regulations that were proposed to be
retained in the updated regulations
generally were not discussed in the
Explanation of Provisions that
accompanied the proposed regulations.
Similarly, rules under the proposed
regulations that are included in these
final regulations without change
generally are not discussed in this
Summary of Comments and Explanation
of Revisions.
I. Section 401(a)(9) Regulations
A. Section 1.401(a)(9)–1—Minimum
Distribution Requirement in General
1. Statutory Effective Date of the
Limitation on Beneficiary Life
Expectancy Distributions
Section 1.401(a)(9)–1 provides general
rules that apply for all of the regulations
under section 401(a)(9), including rules
addressing application of the effective
date of section 401(a)(9)(H), which was
added to the Code by section 401 of the
SECURE Act to limit which
beneficiaries may take distributions over
their life expectancies. Generally, the
amendments made by section 401 of the
SECURE Act apply to distributions with
respect to an employee who dies on or
after January 1, 2020 (with a later
effective date for certain collectively
bargained plans or governmental plans).
In addition, if an employee in a plan
died before the section 401(a)(9)(H)
effective date for that plan, the
employee had only one designated
beneficiary, and the employee’s
designated beneficiary dies on or after
that effective date, then the amendments
made by section 401 of the SECURE Act
apply to any beneficiary of the
designated beneficiary. In this situation,
the designated beneficiary is treated as
an eligible designated beneficiary for
purposes of the 10-year payout required
by section 401(a)(9)(H)(iii). Accordingly,
the death of the designated beneficiary
triggers a requirement to complete
payment by the end of the calendar year
that includes the tenth anniversary of
the date of the death of that designated
beneficiary. In contrast, if that
designated beneficiary died before that
effective date, then the amendments
made by section 401 of the SECURE Act
do not apply with respect to the
employee’s interest under the plan.
Under the proposed regulations, if an
employee in a plan who died before the
section 401(a)(9)(H) effective date for
that plan had more than one designated
beneficiary, whether the amendments
made by section 401 of the SECURE Act
apply depends on when the oldest of

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those beneficiaries dies. Thus, for
example, if an employee who died
before January 1, 2020, named a seethrough trust as the sole beneficiary of
the employee’s interest in the plan, and
the trust has three beneficiaries who are
all individuals, then the amendments
made by section 401 of the SECURE Act
will apply with respect to distributions
to the trust upon the death of the oldest
trust beneficiary, but only if that
beneficiary dies on or after the section
401(a)(9)(H) effective date for that plan.
However, if the oldest of the trust
beneficiaries died before that effective
date, then the amendments made by
section 401 of the SECURE Act do not
apply with respect to distributions to
the trust. Some commenters asked how
these effective date rules apply if the
beneficiaries were using the separate
account alternative (under which
section 401(a)(9) is applied separately to
the separate accounts for each
beneficiary). In that case, the separate
application of section 401(a)(9) with
respect to the separate account for a
beneficiary is used to determine
whether section 401(a)(9)(H) applies to
that beneficiary.
The proposed regulations reflected
the exception for a qualified annuity
(that is, an annuity contract for which
an employee made an irrevocable
election as to the method and the
amount of the annuity payments before
December 20, 2019) described in section
401(b)(4) of the SECURE Act. One
commenter raised questions regarding
whether the requirements for an
irrevocable election as to the method
and amount of annuity payments under
the contract meant that the contract
loses its exception from the application
of section 401(a)(9)(H) merely because
the contract permits additional
premiums to be paid or permits the
annuitant to select when distributions
under the contract commence. The final
regulations do not change the
requirement that, in order for the
contract to be excepted from the
application of section 401(a)(9)(H), the
method and amount of annuity
payments under the contract be
irrevocably selected before December
20, 2019. For this purpose, the mere
ability to pay an additional premium or
change the commencement date of
benefits under the contract after
December 20, 2019, does not cause the
contract to lose its exception from the
application of section 401(a)(9)(H).
However, if an individual paid an
additional premium or changed the
commencement date of benefits under
the contract after that date, then the
contract would lose its exception.

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Commenters also requested that the
final regulations apply the qualified
annuity exception to the situation in
which the employee had died and, after
the employee’s death, the beneficiary
had made an irrevocable election as to
the method and the amount of the
annuity payments before December 20,
2019. These final regulations make that
change.
2. Applicability Date of Final
Regulations Under Section 401(a)(9)
A number of commentators requested
that the applicability date of the final
regulations be delayed from the
proposed applicability date of
distribution calendar years beginning on
or after January 1, 2022, in order to
provide adequate time for plan
administrators and IRA providers to
familiarize themselves with the new
rules and to update administrative
systems to implement necessary
changes. In response to these comments,
the final regulations under section
401(a)(9) apply for distribution calendar
years beginning on or after January 1,
2025. For earlier distribution calendar
years, taxpayers must apply the 2002
final regulations and 2004 final
regulations, but taking into account a
reasonable, good faith interpretation of
the amendments made by sections 114
and 401 of the SECURE Act.6 For the
2023 and 2024 distribution calendar
years, taxpayers must also take into
account a reasonable, good faith
interpretation of the amendments made
by sections 107, 201, 202, 204, and 337
of the SECURE 2.0 Act.
B. Section 1.401(a)(9)–2—Distributions
Commencing During an Employee’s
Lifetime
Section 1.401(a)(9)–2 provides rules
for determining the required beginning
date for distributions and whether
distributions are treated as having begun
during an employee’s lifetime. These
rules are based on the rules in the 2002
final regulations, except that the rules
have been updated to reflect the
amendments to the required beginning
date made by section 114 of the
SECURE Act and section 107 of the
SECURE 2.0 Act.
Specifically, these regulations
generally provide that the required
beginning date is April 1 of the calendar
year following the later of (1) the
calendar year in which the employee
reaches the applicable age, and (2) the
calendar year in which the employee
6 The preamble to the proposed regulations
provided that compliance with the proposed
regulations will be treated as a reasonable, good
faith interpretation of the amendments made by
sections 114 and 401 of the SECURE Act.

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58891

retires from employment with the
employer maintaining the plan. These
regulations provide that the applicable
age is determined based on an
employee’s date of birth, as follows: (1)
for employees born before July 1, 1949,
the applicable age is 701⁄2; (2) for
employees born on or after July 1, 1949,
but before January 1, 1951, the
applicable age is 72; (3) for employees
born on or after January 1, 1951, but
before January 1, 1959, the applicable
age is 73; and (4) for employees born on
or after January 1, 1960, the applicable
age is 75.7 The final regulations make
conforming changes by replacing
references to age 72 in the proposed
regulations (when referring to the age
for determining the required beginning
date) with references to the applicable
age. The Summary of Comments and
Explanation of Revisions section of this
preamble generally does not describe
those changes.
One commenter asked whether a plan
could provide a uniform required
beginning date of April 1 of the calendar
year following the year an employee
attains age 701⁄2 that would apply to all
employees in the plan regardless of the
employee’s date of birth. While the final
regulations do not provide for such an
option, the Department of the Treasury
(Treasury Department) and the IRS note
that, subject to the requirements of
section 411(a)(11), a plan could require
benefits to commence by that date. In
addition, in the case of a defined benefit
plan, § 1.401(a)(9)–6(k) provides that if
distributions start prior to the required
beginning date in a distribution form
that is an annuity under which
distributions are made in accordance
with the requirements of that section,
then the annuity starting date will
generally be treated as the required
beginning date for purposes of applying
the rules of section 401(a)(9).
Another commenter asked whether an
employee who is not a 5-percent owner,
has benefits under a plan maintained by
more than one employer, and retires
from employment from any of the
employers participating in the plan is
treated as having retired for purposes of
section 401(a)(9)(C) if that employee is
employed by a different employer
participating in the same plan. The final
regulations add language clarifying that
the employee is not treated as having
7 Section 107 of the SECURE 2.0 Act includes an
ambiguity relating to the definition of applicable
age for employees born in 1959 (section
401(a)(9)(C)(v) provides that the applicable age for
those employees is both 73 and 75). Accordingly,
these regulations reserve a paragraph that defines
the applicable age for employees born in 1959, and
that issue is addressed in a notice of proposed
rulemaking (REG–103529–23) in the Proposed
Rules section of this issue of the Federal Register.

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retired for purposes of section
401(a)(9)(C)(i)(II) in this situation.
C. Section 1.401(a)(9)–3—Death Before
Required Beginning Date
Section 1.401(a)(9)–3 provides rules
for distributions if an employee dies
before the employee’s required
beginning date. These rules are based on
the rules in the 2002 final regulations
but are updated to reflect new section
401(a)(9)(H). For example, the option for
a designated beneficiary of an employee
who participates in a defined
contribution plan to elect to receive
distributions over the designated
beneficiary’s life expectancy is limited
to an eligible designated beneficiary.
These regulations are also updated to
reflect the amendment to section
402A(d) made by section 325 of the
SECURE 2.0 Act and provide that if an
employee’s entire interest under a
defined contribution plan is in a
designated Roth account, then no
distributions are required to be made to
the employee during the employee’s
lifetime. Thus, upon the employee’s
death, that employee is treated as
having died before his or her required
beginning date.
The proposed regulations described
satisfaction of the life expectancy rule
for an eligible designated beneficiary of
an employee in a defined contribution
plan by reference to the rules in
§ 1.401(a)(9)–5. The final regulations
clarify that the requirement to take an
annual distribution in accordance with
the preceding sentence continues to
apply for all subsequent calendar years
until the employee’s interest is fully
distributed. Thus, a required minimum
distribution is due for the calendar year
of the eligible designated beneficiary’s
death, and that amount must be
distributed during that calendar year to
any beneficiary of the deceased eligible
designated beneficiary to the extent it
has not already been distributed to the
eligible designated beneficiary.
Under the proposed regulations, if the
employee has a designated beneficiary
(who is an eligible designated
beneficiary in the case of a defined
contribution plan), the plan may: (1)
provide that the 5-year rule (in the case
of a defined benefit plan) or 10-year rule
(in the case of a defined contribution
plan) applies; (2) provide that the life
expectancy rule applies; or (3) permit
the employee or the designated
beneficiary to elect between the
applicable 5-year or 10-year rule or the
life expectancy rule.8 The proposed
8 If

a defined contribution plan does not include
either the provision that applies the 10-year rule or
the provision under which a beneficiary can elect

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regulations also provided that, if a plan
permits an employee or designated
beneficiary to elect between the
applicable 5-year or 10-year rule and the
life expectancy rule, then the plan must
specify the default that would apply
when the employee or designated
beneficiary has not made an election.
Consistent with requests made by
commenters, the final regulations
provide that the requirement to specify
a default applies only if the plan is
intended to be operated using a default
different than the default that would
apply under the regulations if the
employee or designated beneficiary did
not make an affirmative election. Thus,
for example, if the intended operation in
the absence of an election is that a
surviving spouse who is the sole
beneficiary is to wait to begin
distributions until the employee would
have reached the applicable age, then
the plan is not required to provide for
a default (because that is the rule that
would apply under the regulations if the
surviving spouse did not make an
affirmative election).
In addition, consistent with requests
made by commenters, the final
regulations clarify that a defined
contribution plan may provide that a
particular distribution method will
apply to certain categories of eligible
designated beneficiaries or that an
election as to which distribution
method applies is available only for
certain categories of eligible designated
beneficiaries. Thus, for example, a plan
may provide that only an employee’s
surviving spouse may elect between the
10-year rule and life expectancy
payments.
D. Section 1.401(a)(9)–4—Determination
of the Designated Beneficiary
Section 1.401(a)(9)–4 provides rules
addressing the determination of the
employee’s beneficiary for purposes of
section 401(a)(9), including the
definition of eligible designated
beneficiary in section 401(a)(9)(E)(ii).
Section 1.401(a)(9)–4 also provides rules
addressing the treatment of trust
beneficiaries as designated beneficiaries
when a trust is named as the beneficiary
of an employee’s interest in a plan.
1. Eligible Designated Beneficiaries
Under section 401(a)(9)(E)(ii), an
eligible designated beneficiary is a
designated beneficiary who, as of the
date of the employee’s death, is (1) the
surviving spouse of the employee, (2) a
child of the employee who has not yet
between the 10-year rule and the life expectancy
rule, then the plan must provide that the life
expectancy rule applies for an eligible designated
beneficiary.

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reached the age of majority, (3) disabled,
(4) chronically ill, or (5) not more than
10 years younger than the employee.
a. Definition of Child
Under section 401(9)(E)(ii)(III), one of
the categories of eligible designated
beneficiary is a child of the employee
who has not yet reached the age of
majority. Consistent with requests made
by commenters, the final regulations
clarify that the definition of child in
section 152(f)(1) applies for this purpose
(so that the definition includes a
stepchild, an adopted child, and an
eligible foster child).
b. Definition of Disability
The regulations provide rules for the
determination of whether an individual
is disabled for purposes of section
401(a)(9). Section 401(a)(9)(E)(ii)(III)
applies the definition of disability under
section 72(m)(7) for purposes of section
401(a)(9). Section 72(m)(7) provides a
standard of disability based on whether
an individual is unable to engage in
substantial gainful activity. However,
that standard may be difficult to apply
for individuals under age 18.
Accordingly, if, as of the date of the
employee’s death, a beneficiary is
younger than age 18, then the
regulations apply a comparable standard
that requires the beneficiary to have a
medically determinable physical or
mental impairment that results in
marked and severe functional
limitations, and that can be expected to
result in death or to be of longcontinued and indefinite duration.
These regulations also provide a safe
harbor for the determination of whether
a beneficiary is disabled. Specifically, if,
as of the date of the employee’s death,
the Commissioner of Social Security has
determined that the individual is
disabled within the meaning of 42
U.S.C. 1382c(a)(3), then that individual
will be deemed to be disabled for
purposes of section 401(a)(9) of the
Code. The final regulations clarify that
this alternative is merely a safe harbor
and that a beneficiary who does not
have a Social Security determination of
disability can apply the general
standards described in the preceding
paragraph.
Several commenters asked for
additional safe harbors for the
determination of whether a beneficiary
is disabled. For example, one
commenter requested that the final
regulations include a safe harbor under
which a beneficiary is considered to be
a disabled individual if a State court has
determined that the beneficiary is
incapacitated for purposes of State
guardianship proceedings. Another

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commentor asked for a safe harbor
under which an individual is treated as
disabled or chronically ill if that
individual is an eligible individual with
respect to an ABLE account as described
in section 529A(e)(1). The regulations
do not provide for those safe harbors
because the standards required for a
State law guardianship proceeding or to
be an eligible individual with respect to
an ABLE account could be broader than
the definition of disability in section
72(m)(7).
c. Documentation Requirements for
Disabled or Chronically Ill Status
The regulations provide that, with
respect to a beneficiary who is disabled
or chronically ill as of the date of the
employee’s death, documentation of the
disability or chronic illness must be
provided to the plan administrator no
later than October 31 of the calendar
year following the calendar year of the
employee’s death. If the designated
beneficiary is chronically ill under any
of the definitions in section
7702B(c)(2)(A) as of the date of the
employee’s death, the documentation
must include a certification by a
licensed health care practitioner (as
defined in section 7702B(c)(4)) that the
designated beneficiary is chronically ill.
Additionally, in accordance with
section 401(a)(9)(E)(ii)(IV), if the
beneficiary is chronically ill under the
definition in section 7702B(c)(2)(A)(i),
then the documentation also must
include a certification from a licensed
health care practitioner that, as of the
date of the certification, the individual
is unable to perform (without
substantial assistance from another
individual) at least 2 activities of daily
living and the period of that inability is
an indefinite one that is reasonably
expected to be lengthy in nature.
For a designated beneficiary who is an
eligible designated beneficiary because,
at the time of the employee’s death, the
designated beneficiary is the employee’s
minor child and that child also is
disabled or chronically ill within the
meaning of the regulations, the
designated beneficiary will continue to
be treated as an eligible designated
beneficiary after reaching the age of
majority (on account of being disabled
or chronically ill) only if these
documentation requirements are timely
met with respect to that designated
beneficiary. Similarly, if the employee’s
designated beneficiary is the employee’s
surviving spouse and that spouse also is
disabled or chronically ill at the time of
the employee’s death, then the surviving
spouse will be treated as disabled or
chronically ill for purposes of the
applicable multi-beneficiary trust rules

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only if the documentation requirements
are timely met with respect to the
surviving spouse.
One commenter requested that the
final regulations replace the October 31
deadline for providing documentation
reflecting a designated beneficiary’s
disability or chronic illness and instead
provide that the deadline be before a
full distribution would be required if
the beneficiary was not disabled. The
regulations do not make that change
because of the need for a medical
assessment of the designated
beneficiary’s disability or chronic
illness as of the date of the employee’s
death. Allowing a 10-year delay before
making this medical assessment (or an
even further delay in the case of a child
of the employee who had not reached
the age of majority as of the date of the
employee’s death) could result in a less
reliable assessment that the beneficiary
was disabled or chronically ill as of the
date of the employee’s death than an
assessment made within a short period
after that date.
Several commenters requested that
plan administrators be permitted to rely
on self-certifications from a designated
beneficiary (or, in the case of a seethrough trust, the trustee of that trust)
that the beneficiary is disabled or
chronically ill within the meaning of
§ 1.401(a)(9)–4(d). The commenters
argued that plan administrators and IRA
custodians should not be required to
review personal health records or
similar documents to determine
whether a beneficiary is disabled or
chronically ill and that the selfcertification process has already been
established for other areas of plan
administration, including in the case of
coronavirus-related distributions
pursuant to Notice 2020–50, 2020–28
IRB 35.
The Treasury Department and the IRS
generally disagree with the commenters’
request that plan administrators should
be able to rely on a beneficiary’s selfcertification of disability or chronic
illness. This documentation
requirement is different than that of
coronavirus-related distributions
because there is the potential for a delay
of distributions of the employee’s
account for long periods if the
beneficiary meets the disabled or
chronically ill standard in the Code. As
a result, plans should require
documentation from a licensed health
care practitioner (rather than rely on a
certification by the beneficiary).
While the final regulations do not
eliminate the deadline to provide
documentation to a plan administrator,
an example illustrating this rule has
been modified to show that the required

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documentation need not be overly
detailed. Under the example, the
licensed health care practitioner merely
certifies that, as of a specified date, the
designated beneficiary is unable to
engage in any substantial gainful
activity by reason of a physical
impairment that can be expected to be
of long-continued and indefinite
duration. In addition, the regulations
include a transition rule for the
documentation deadline in the case of
an employee who died in 2020, 2021,
2022, or 2023. In that case, the
documentation of the designated
beneficiary’s disability or chronic
illness does not need to be furnished to
the plan administrator until October 31,
2025. Finally, as described in section IV
of this Summary of Comments and
Explanation of Revisions, the final
regulations provide that there is no
requirement to provide documentation
of a designated beneficiary’s disability
or chronic illness to an IRA custodian.
2. Trust as Beneficiary
The final regulations retain the seethrough trust concept in the 2002 final
regulations under which certain
beneficiaries of a trust are treated as
beneficiaries of the employee if the trust
meets specified requirements.
Specifically, to be a see-through trust,
the trust must meet the following
requirements: (1) the trust is valid under
State law or would be valid but for the
fact that there is no corpus; (2) the trust
is irrevocable or will, by its terms,
become irrevocable upon the death of
the employee; (3) the beneficiaries of the
trust who are beneficiaries with respect
to the trust’s interest in the employee’s
benefit are identifiable; and (4) the
specified documentation requirements
are satisfied.
a. Determining Which See-Through
Trust Beneficiaries Are Treated as
Beneficiaries of the Employee
1. See-Through Trust Beneficiaries
Taken Into Account
Generally, the regulations provide
that a beneficiary of a see-through trust
is treated as a beneficiary of the
employee if the beneficiary could
receive amounts in the trust
representing the employee’s interest in
the plan that are neither contingent
upon nor delayed until the death of
another trust beneficiary who does not
predecease (and who is not treated as
having predeceased) 9 the employee. A
9 For purposes of this rule, a beneficiary is treated
as having predeceased the employee if the
beneficiary is treated as predeceasing the employee
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beneficiary described in the preceding
sentence is referred to as a primary
beneficiary in this Summary of
Comments and Explanation of
Revisions. One commenter requested
that the final regulations provide a
uniform simultaneous death provision
for determining whether one beneficiary
predeceases another beneficiary. The
final regulations do not adopt this
request because the disposition of
property interests is governed by State
law rather than by these regulations.
Whether any other see-through trust
beneficiary also is treated as a
beneficiary of the employee depends
upon whether the see-through trust is a
conduit trust or an accumulation trust.
A conduit trust is defined in the
regulations as a see-through trust, the
terms of which provide that all plan
distributions will, upon receipt by the
trustee, be paid directly to, or for the
benefit of, primary beneficiaries during
their lifetimes. For example, if an
employee names a see-through trust as
the beneficiary of the employee’s
interest in a plan and the trust terms
provide that all distributions from the
plan to the trust during the surviving
spouse’s life will, upon receipt by the
trustee, be paid directly to that
surviving spouse, then the trust is a
conduit trust and the surviving spouse
is treated as a beneficiary of the
employee because the surviving spouse
could receive amounts in the trust with
respect to the deceased employee’s
interest in the plan that are neither
contingent upon nor delayed until the
death of another trust beneficiary. In
this case, any beneficiary who could
receive distributions from the trust with
respect to the deceased employee’s
interest in the plan after the surviving
spouse’s death is not treated as a
beneficiary of the employee.
An accumulation trust is any seethrough trust that is not a conduit trust,
and under an accumulation trust, there
are potentially more beneficiaries. A
beneficiary of an accumulation trust is
treated as a beneficiary of the employee
if that beneficiary could receive
amounts accumulated in the trust
representing the employee’s interest in
the plan that were not distributed to
other beneficiaries during their lifetimes
(unless that beneficiary is disregarded
pursuant to the rules described in
section II.D.2.a.2 of this Summary of
Comments and Explanation of
Revisions). A beneficiary described in
the preceding sentence is referred to as
a residual beneficiary in this Summary
applicable State law or a qualified disclaimer
satisfying section 2518 that applies to the entire
interest to which the beneficiary is entitled.

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of Comments and Explanation of
Revisions.
As an illustration of the rule in the
preceding paragraph, assume an
employee designates a see-through trust
as the sole beneficiary of the employee’s
interest in the plan. The terms of the
see-through trust provide that the
trustee is to pay specified amounts from
the trust to the employee’s surviving
spouse, but do not provide that all plan
distributions made to the trust will,
upon receipt by the trustee, be paid
directly to, or for the benefit of, the
spouse. Upon the spouse’s death, the
see-through trust will terminate and the
amounts remaining in the trust will be
paid to the employee’s brother. The
surviving spouse is treated as a
beneficiary of the employee (because the
surviving spouse could receive amounts
in the see-through trust representing the
deceased employee’s interest in the plan
that are neither contingent upon nor
delayed until the death of another trust
beneficiary). Moreover, because not all
distributions from the plan to the seethrough trust are required, upon receipt
by the trustee, to be paid directly to, or
for the benefit of, a trust beneficiary, the
trust is an accumulation trust. As a
result, the employee’s brother is treated
as a beneficiary of the employee because
he is the residual beneficiary of an
accumulation trust (unless the
employee’s brother is disregarded
pursuant to the rules described in
section II.D.2.a.2 of this Summary of
Comments and Explanation of
Revisions).
One commenter requested that the
final regulations provide that a seethrough trust can still be a conduit trust
if it includes certain trust terms.
Specifically, the commenter requested
that final regulations provide that a seethrough trust will not fail to be treated
as a conduit trust merely because that
trust does not provide that, with respect
to the deceased employee’s interest in
the plan, all distributions will, upon
receipt by the trustee, be paid directly
to a specified beneficiary provided that
the beneficiary has a unilateral
withdrawal right with respect to those
amounts. The final regulations do not
include this change because the
Treasury Department and the IRS are
concerned that if a trust merely provides
a beneficiary with this type of unilateral
withdrawal right (rather than providing
that any distribution from the plan,
upon receipt by the trustee, be paid
directly to that beneficiary), then there
could be an accumulation within the
trust of amounts representing the
employee’s interest in the plan that
could be paid to a different trust
beneficiary. In those cases, the trust

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beneficiaries who could benefit from
that accumulation should also be treated
as beneficiaries of the employee for
purposes of section 401(a)(9) (without
regard to the taxability of the
distribution).
Commenters requested that the
regulations clarify the see-through trust
rules in the case of payments that are
not made directly to the trust
beneficiary but are made indirectly for
the benefit of the trust beneficiary (such
as payments to a custodial account for
the benefit of a minor child). In
response to those comments, these
regulations provide that a trust
beneficiary will be treated as if that
beneficiary could receive amounts in
the trust representing the employee’s
interest in the plan regardless of
whether those amounts could be paid
directly to that beneficiary or indirectly
for the benefit of that beneficiary.
2. Disregarded Beneficiaries of SeeThrough Trusts
The regulations provide for certain
beneficiaries of a see-through trust to be
disregarded as beneficiaries of the
employee for purposes of section
401(a)(9). Specifically, a beneficiary of a
see-through trust is not treated as a
beneficiary of the employee if that trust
beneficiary could receive payments
from the trust that represent the
employee’s interest in the plan only
after the death of another trust
beneficiary who is a residual beneficiary
(and is not also a primary beneficiary)
who did not predecease (and is not
treated as having predeceased) the
employee.
One commenter requested that the
disregard described in the preceding
paragraph should not be affected by a
trustee’s ability to make sprinkling
distributions to a residual beneficiary
(that is, distributions for the health,
support, or maintenance of that residual
beneficiary) during the lifetime of a
primary beneficiary. The Treasury
Department and the IRS disagree with
this request because of the potential for
the primary beneficiary to be entitled to
only a nominal amount (so that the
residual beneficiary entitled to
sprinkling distributions is effectively
the primary beneficiary). In that case,
the beneficiary who is entitled to
amounts representing the employee’s
interest in the plan after the death of the
residual beneficiary has a significant
interest in amounts accumulated in the
trust representing the employee’s
interest in the plan and should be
treated as a beneficiary of the employee.
The regulations provide another
exception under which a see-through
trust beneficiary with a residual interest

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is disregarded as a beneficiary of the
employee. Specifically, the regulations
provide that if the see-through trust
terms require a full distribution of
amounts in the trust representing the
employee’s interest in the plan to a
specified trust beneficiary by the later
of: (1) the calendar year following the
calendar year of the employee’s death;
and (2) the end of the calendar year that
includes the tenth anniversary of the
date the designated beneficiary reaches
the age of majority, then any other
beneficiary whose sole entitlement to
distributions is conditioned on the
specified trust beneficiary’s death before
the full distribution is required is
disregarded as a beneficiary of the
employee.
One commenter requested that the
final regulations also disregard
beneficiaries who have a contingent
interest in the employee’s benefit under
the plan if the likelihood of that
contingency occurring is remote (for
example, the probability of that
contingency occurring is less than 5
percent). The final regulations do not
adopt this broad disregard because it is
too difficult to determine the likelihood
of a stated event occurring prior to a
specified date in cases other than an
individual reaching a particular age or
a residual beneficiary predeceasing
another designated beneficiary entitled
to amounts in the trust.
b. Documentation Requirements for SeeThrough Trusts
The proposed regulations adopted the
see-through trust documentation
requirements described in the 2002 final
regulations. The documentation
requirements in the proposed
regulations generally provided that the
plan administrator must timely receive
either (1) a copy of the actual trust
instrument, or (2) a list of all the trust
beneficiaries, including contingent
beneficiaries, with a description of the
conditions on their entitlement
sufficient to establish who are the
beneficiaries.
Commenters noted that plan
administrators and IRA custodians are
not experts in the intricacies of various
State trust laws and thus, are not
qualified to read through complex trust
instruments to determine who the
beneficiaries are for purposes of section
401(a)(9). The commenters requested
that final regulations allow for a
certification from the trustee of the trust
as to the beneficiaries who are to be
treated as beneficiaries of the employee
for purposes of section 401(a)(9). The
final regulations do not permit a trustee
to certify to a plan administrator the list
of beneficiaries to be treated as

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beneficiaries of the employee because
plan administrators are better suited to
determine how section 401(a)(9) applies
with respect to an employee.
As an alternative to allowing a plan
administrator to rely on the trustee’s
certification of the trust beneficiaries
who are to be treated as the employee’s
beneficiaries for purposes of section
401(a)(9), the commenters requested
that final regulations allow for a plan
administrator to specify that a list of the
trust beneficiaries with a description of
the conditions on their entitlement must
be provided (rather than the actual trust
document). The final regulations clarify
that a plan administrator may choose
which of the two alternatives will be
accepted. Thus, the plan administrator
may require the trustee to provide a list
of trust beneficiaries with a description
of the conditions on their entitlement in
lieu of the actual trust document. In
addition, as described in section IV of
this Summary of Comments and
Explanation of Revisions, the
regulations provide that a trustee of a
see-through trust is not required to
provide the trust documentation to an
IRA custodian, trustee, or issuer.
c. Applicable Multi-Beneficiary Trusts
The proposed regulations provided
guidance on a particular type of seethrough trust defined in section
401(a)(9)(H)(v) as an applicable multibeneficiary trust. Specifically, the
proposed regulations defined two types
of applicable multi-beneficiary trusts. A
type I applicable multi-beneficiary trust
is a trust with at least one beneficiary
who is disabled or chronically ill, the
terms of which provide that the trust is
to be divided immediately upon the
death of the employee into separate
trusts for each beneficiary (as described
in section 401(a)(9)(H)(iv)(I)). A type II
applicable multi-beneficiary trust is an
applicable multi-beneficiary trust, the
terms of which provide that no
individual other than a disabled or
chronically ill eligible designated
beneficiary has any right to the
employee’s interest in the plan until the
death of all such eligible designated
beneficiaries with respect to the trust (as
described in section 401(a)(9)(H)(iv)(II)).
The proposed regulations permitted
section 401(a)(9) to be applied
separately with respect to the separate
interests of the beneficiaries reflected in
the separate trusts of a type I applicable
multi-beneficiary trust. However, the
final regulations do not include a
definition of a type I applicable multibeneficiary trust. This is because, as
described in section I.H of this
Summary of Comments and Explanation
of Revisions, the final regulations

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include a broader rule that permits
separate application of section 401(a)(9)
with respect to the separate interests of
the beneficiaries reflected in a trust if
that trust is to be divided immediately
upon the death of the employee into
separate trusts for each beneficiary,
without regard to whether any of the
beneficiaries are disabled or chronically
ill.
With respect to the definition of a
type II applicable multi-beneficiary
trust, one commenter requested that the
final regulations provide that the trust
be permitted to include beneficiaries
that are not individuals (such as a
charity) that are entitled to distributions
after the death of the disabled or
chronically ill beneficiary. Section
337(b) of the SECURE 2.0 Act amended
section 401(a)(9)(H)(v) of the Code to
provide a modified version of that
request. Accordingly, these regulations
adopt a modified version of the
definition of a type II applicable multibeneficiary trust from the proposed
regulations. Under that modification,
certain organizations described in
section 170(b)(1)(A) to which charitable
contributions may be made are treated
as designated beneficiaries.10
In addition, one commenter requested
clarification in the case of a trust that
provides for a disabled or chronically ill
eligible designated beneficiary’s interest
in the trust to be terminated if necessary
to preserve eligibility for certain public
benefits. These regulations continue to
require that no trust beneficiary other
than the disabled or chronically ill
beneficiary may receive payments from
the trust prior to the death of that
beneficiary in order for the trust to be
treated as an applicable multibeneficiary trust. However, if the trust
provides that the other trust
beneficiaries cannot receive any
amounts from the trust until the death
of the disabled or chronically ill
beneficiary notwithstanding whether
that beneficiary’s interest in the trust is
terminated, then the termination
provision will not cause the trust to fail
to be treated as an applicable multibeneficiary trust. In this case, if the
disabled or chronically ill beneficiary’s
interest is terminated pursuant to that
trust provision after September 30 of the
calendar year following the calendar
year of the employee’s death, then the
trust is treated as having been modified
10 The final regulations also reflect the change to
section 401(a)(9)(H)(iv)(II) of the Code made by
section 337 of the SECURE 2.0 Act. Under this
change, the restriction on payments from a type II
applicable multi-beneficiary trust prior to the death
of the disabled or chronically ill individual applies
to any other beneficiary (rather than applying to any
other individual).

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to add those other beneficiaries as of the
date the termination occurred.
E. Section 1.401(a)(9)–5—Required
Minimum Distributions From Defined
Contribution Plans
1. In General
Like the proposed regulations, these
final regulations retain the general
method in the 2002 final regulations by
which a required minimum distribution
from a defined contribution plan is
calculated in any calendar year when an
employee dies on or after the required
beginning date or when an employee’s
eligible designated beneficiary is taking
annual life expectancy payments after
an employee dies before the required
beginning date. Specifically, the
required minimum distribution for a
calendar year is determined by dividing
the employee’s account balance as of the
end of the prior calendar year by the
applicable denominator. In addition to
the requirement to take annual required
minimum distributions, the regulations
implement the amendments made by
section 401 of the SECURE Act by
requiring that a full distribution of the
employee’s remaining interest be taken
in certain circumstances.

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2. Purchase of Annuity Contract With
Portion of Employee’s Individual
Account
The 2002 final regulations provided a
special bifurcation rule in the case of an
employee with an individual account
who used a portion of that account to
purchase an annuity contract. In that
case, those regulations provided that
payments from the annuity contract
were required to satisfy the rules of
§ 1.401(a)(9)–6 and payments of the
remaining account balance were
required to satisfy the rules of
§ 1.401(a)(9)–5. In addition, because the
required minimum distribution for a
calendar year is determined based on
the account balance as of the end of the
previous calendar year, the 2002 final
regulations provided that, for the
calendar year in which the annuity
contract is purchased, payments made
under the contract are treated as
distributions from the individual
account for purposes of determining
whether section 401(a)(9) has been
satisfied with respect to that account.
The proposed regulations generally
retained these rules.
In accordance with section 204 of the
SECURE 2.0 Act, these regulations
provide that a plan may allow the
employee to elect to have the amount
required to be distributed for a calendar
year from an individual account to be
calculated as the excess of the total

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required amount (as defined in section
204(b)(1) of the SECURE 2.0 Act) for
that year over the annuity amount (as
defined in section 204(b)(2) of the
SECURE 2.0 Act) for that year.
Accordingly, these final regulations
provide an alternative to the bifurcation
rule described in the preceding
paragraph. Under this rule, in lieu of
satisfying section 401(a)(9) separately
with respect to the annuity contract and
the remaining account balance, a plan
may permit an employee to elect to
satisfy section 401(a)(9) for the annuity
contract and that account balance in the
aggregate by adding the fair market
value of the contract to the remaining
account balance and treating payments
under the annuity contract as
distributions from the individual
account. These regulations reserve a
paragraph for rules of operation with
respect to this alternative, including
guidance related to the determination of
the fair market value of the annuity
contract. These rules are included in a
notice of proposed rulemaking (REG–
103529–23) in the Proposed Rules
section of this issue of the Federal
Register.
3. Distributions After the Employee’s
Death
a. Requirement To Satisfy Both Section
401(a)(9)(B)(i) and (ii) in the Case of an
Employee Who Dies On or After the
Required Beginning Date
Section 401(a)(9)(B)(i) provides rules
that apply if an employee dies after
benefits have commenced. While the 5year rule under section 401(a)(9)(B)(ii)
generally applies if an employee dies
before the employee’s required
beginning date, section 401(a)(9)(H)(i)
provides that section 401(a)(9)(B)(ii)
applies in certain cases by substituting
10 years for 5 years and applies whether
or not the employee dies before or after
the employee’s required beginning date.
Accordingly, if an employee dies after
the required beginning date,
distributions to the employee’s
beneficiary for calendar years after the
calendar year in which the employee
died must satisfy section 401(a)(9)(B)(i)
as well as section 401(a)(9)(B)(ii). In
order to satisfy both of these
requirements, the regulations provide
for the same calculation of the annual
required minimum distribution that was
adopted in the 2002 final regulations
but with an additional requirement that
a full distribution of the employee’s
entire interest in the plan be made upon
the occurrence of certain designated
events (discussed in section I.E.3.c of
this Summary of Comments and
Explanation of Revisions).

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Several commenters requested that
the final regulations eliminate the
requirement for continued annual
distributions if an employee dies on or
after the employee’s required beginning
date. The commenters set forth an
interpretation of section 401(a)(9)(H)
under which, if an employee dies on or
after the employee’s required beginning
date, the 10-year rule described in
section 401(a)(9)(B)(ii) (as modified by
section 401(a)(9)(H)(i)) applies in lieu of
the ‘‘at least as rapidly’’ rule described
in section 401(a)(9)(B)(i). Commenters
also asserted that requiring continued
annual distributions adds complexity to
the regulations (in that the beneficiary
would have to know whether the
employee died before or after the
employee’s required beginning date to
apply this rule).
The final regulations do not eliminate
the requirement for continued annual
distributions if an employee dies on or
after the employee’s required beginning
date. The Treasury Department and the
IRS do not think that the commenters’
interpretation is consistent with a plain
reading of the statute. Instead, the
Treasury Department and the IRS have
determined that section 401(a)(9)(B)(i)
and (ii) both apply if an employee dies
after the employee’s required beginning
date (unless the designated beneficiary
is an eligible designated beneficiary
taking life expectancy payments under
section 401(a)(9)(B)(iii)). Read together,
those provisions generally require
annual distributions to continue while
also requiring full distribution of the
employee’s interest in the plan by the
end of the calendar year that includes
the tenth anniversary of the date of the
employee’s death.
The Treasury Department and the IRS
have also concluded that the
overarching policy of section 401(a)(9)
and the amendments made by section
401 of the SECURE Act support the
interpretation in these regulations.
Since it was first added to the Code,
section 401(a)(9) has always included
the concept of a required beginning
date, under which, once required
minimum distributions began to either
an employee or designated beneficiary,
they were required to continue until the
employee’s entire interest under the
plan was fully distributed, and these
regulations retain this requirement.
There is little indication in section 401
of the SECURE Act to suggest that
Congress intended to allow distributions
of an employee’s account to temporarily
cease for up to 9 years once annual
required minimum distributions have
begun. Moreover, the requirement to
continue annual distributions does not
increase complexity (in that this

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requirement merely retains the rules
that were in place before the addition of
section 401(a)(9)(H), but subject to the
full distribution requirement described
in section I.E.3.c of this Summary of
Comments and Explanation of
Revisions).
The proposed regulations provided a
similar requirement to continue annual
distributions for 10 years if an eligible
designated beneficiary who was taking
life expectancy payments dies or if an
eligible designated beneficiary who is a
minor child of the employee and who
was taking life expectancy payments
reaches the age of majority. Commenters
raised similar concerns regarding this
requirement. For the reasons described
in the preceding paragraph, these
regulations retain this requirement for
continued annual distributions for up to
10 years after: (1) the death of an eligible
designated beneficiary who was taking
life expectancy payments; or (2) the
attainment of the age of majority (in the
case of an eligible designated
beneficiary who was a minor child of
the employee taking life expectancy
payments).
While the final regulations do not
eliminate the annual distribution
requirement in cases in which annual
life expectancy payments have begun,
the Treasury Department and the IRS
issued Notice 2022–53, 2022–45 IRB
437, Notice 2023–54, 2023–31 IRB 382,
and Notice 2024–35, 2024–19 IRB 1051,
in response to comments requesting
transition relief for this requirement.
Under those notices, if a distribution
would have been required to be made to
certain beneficiaries under these
regulations had they applied before
January 1, 2025, then: (1) a plan will not
fail to be qualified for failing to make
that distribution in 2021, 2022, 2023, or
2024; and (2) the taxpayer who failed to
take the distribution will not be
assessed an excise tax for failing to do
so.11 This relief applies with respect to
a beneficiary who is a designated
beneficiary of an employee who died in
2020, 2021, 2022, or 2023, and after the
employee’s required beginning date,
provided that the beneficiary was not an
eligible designated beneficiary who
used the lifetime or life expectancy
payments exception under section
401(a)(9)(B)(iii). Those notices also
11 This relief does not require taxpayers to make
up missed required minimum distributions nor
does it permit taxpayers to extend the 10-year
deadline by which a full distribution is required to
be made. For example, if an employee died in 2020,
then in 2025, there are six years remaining in the
10-year period without regard to whether the
designated beneficiary took distributions in 2021,
2022, 2023, or 2024. In 2030, the designated
beneficiary must take a distribution of the
remaining account balance.

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provided comparable relief for the case
in which an eligible designated
beneficiary who was taking annual life
expectancy payments died in 2020,
2021, 2022, or 2023, and that
beneficiary’s successor beneficiary
failed to take a distribution in 2021,
2022, 2023, or 2024.
b. Determination of Applicable
Denominator
If an employee died on or after the
required beginning date (or the
employee died before the required
beginning date and the employee’s
eligible designated beneficiary is taking
life expectancy distributions in
accordance with section 401(a)(9)(B)(iii)
and these regulations), then for calendar
years after the calendar year in which
the employee died, the applicable
denominator generally is the remaining
life expectancy of the designated
beneficiary.12 The beneficiary’s
remaining life expectancy generally is
calculated using the age of the
beneficiary in the year following the
calendar year of the employee’s death,
reduced by one for each subsequent
calendar year.
However, as an exception to these
general rules, if the employee’s spouse
is the employee’s sole beneficiary, then
the applicable denominator during the
spouse’s lifetime is the spouse’s life
expectancy (which reflects an annual
recalculation in accordance with section
401(a)(9)(D)). The final regulations
clarify that in this case, for calendar
years after the calendar year in which
the spouse died, in determining the
required minimum distribution to the
spouse’s beneficiary, the applicable
denominator is the spouse’s life
expectancy calculated using the
spouse’s age as of the spouse’s birthday
in the calendar year in which the spouse
died, reduced by one for each
subsequent calendar year.
The final regulations reflect the
amendments made to section
401(a)(9)(B)(iv) by section 327 of the
SECURE 2.0 Act under which a
surviving spouse who is the sole
beneficiary of the employee may elect to
be treated as the employee for certain
purposes. However, the rules relating to
this election are reserved in these final
regulations and included in a notice of
proposed rulemaking (REG–103529–23)
in the Proposed Rules section of this
issue of the Federal Register.
12 In the case of an employee who died on or after
the employee’s required beginning date, the
designated beneficiary may use the employee’s
remaining life expectancy if it is longer than the
beneficiary’s remaining life expectancy.

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c. Full Distribution Required in Certain
Circumstances
Under the proposed regulations, if an
employee’s interest is in a defined
contribution plan to which section
401(a)(9)(H) applies, in order to satisfy
the 5-year rule of section 401(a)(9)(B)(ii)
(or, if applicable, the exception to that
rule in section 401(a)(9)(B)(iii), taking
into account section 401(a)(9)(E)(iii) and
(H)), then the employee’s entire interest
in the plan must be distributed by the
earliest of the following dates:
(1) The end of the tenth calendar year
following the calendar year in which the
employee died if the employee’s
designated beneficiary is not an eligible
designated beneficiary;
(2) The end of the tenth calendar year
following the calendar year in which the
designated beneficiary died if the
employee’s designated beneficiary was
an eligible designated beneficiary;
(3) The end of the tenth calendar year
following the calendar year in which the
beneficiary reaches the age of majority
if the employee’s designated beneficiary
is the child of the employee who had
not yet reached the age of majority as of
the date of the employee’s death; or
(4) The end of the calendar year in
which the applicable denominator
would have been less than or equal to
one if it were determined using the
beneficiary’s remaining life expectancy,
if the employee’s designated beneficiary
is an eligible designated beneficiary,
and if the applicable denominator is
determined using the employee’s
remaining life expectancy.
The final regulations generally retain
these full distribution requirements
(with minor language changes clarifying
those requirements). However,
consistent with requests made by
commenters, the regulations remove the
requirement for a full distribution by the
end of the calendar year in which the
applicable denominator would have
been less than or equal to one if it were
determined using the beneficiary’s
remaining life expectancy (which would
have applied in the case of a designated
beneficiary who was older than the
employee). Accordingly, in the case of
an eligible designated beneficiary who
was born before the employee, if that
beneficiary is taking distributions over
the employee’s remaining life
expectancy, then a full distribution is
not required until the calendar year in
which the applicable denominator is
less than or equal to one.
d. Multiple Designated Beneficiaries
The proposed regulations provided
that if the employee has more than one
designated beneficiary then the

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applicable denominator is determined
using the life expectancy of the oldest
designated beneficiary. Under the
proposed regulations, whether a full
distribution is required also generally is
determined using the oldest of the
designated beneficiaries.
The proposed regulations provided
certain exceptions to these general rules
for multiple designated beneficiaries.
Under one exception, if the employee’s
beneficiary is an applicable multibeneficiary trust, then only the disabled
and chronically ill beneficiaries of the
trust are taken into account in
determining the oldest designated
beneficiary. Under a second exception,
if any of the employee’s designated
beneficiaries was a child of the
employee who had not yet reached the
age of majority as of the date of the
employee’s death, then, in applying the
requirement to make a full distribution
by the tenth year following the death of
the oldest eligible designated
beneficiary, only the employee’s
children who are designated
beneficiaries and who are under the age
of majority as of the employee’s date of
death were taken into account. Thus, in
a situation involving one or more
designated beneficiaries who are
children of the employee under the age
of majority as of the date of the
employee’s death and one or more older
designated beneficiaries, the death of an
older designated beneficiary would not
result in a requirement to pay a full
distribution before the oldest of those
children attains the age of majority plus
10 years.13
One commenter raised the concern
that, if two of the employee’s children
are eligible designated beneficiaries, the
rules in the proposed regulations would
result in a requirement to pay the
balance of the employee’s account upon
the attainment of the age of majority
plus 10 years by the older of those
children. To address this situation, the
final regulations provide that, in the
case described in this paragraph, a full
distribution is not required until ten
years after the youngest of the
employee’s children who are designated
beneficiaries attains the age of majority
13 This rule works in conjunction with the rule in
§ 1.401(a)(9)–4(e)(2)(ii), which provides that if any
of the employee’s designated beneficiaries is an
eligible designated beneficiary because the
beneficiary is the child of the employee who had
not reached the age of majority at the time of the
employee’s death, then the employee is treated as
having an eligible designated beneficiary even if the
employee has other designated beneficiaries who
are not eligible designated beneficiaries. Thus, if the
employee has both an eligible designated
beneficiary who is a minor child of the employee
and an older designated beneficiary, annual
distributions may continue until the minor child
reaches the age of majority plus 10 years.

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(or, if earlier, ten years after the last of
those minor children dies).
4. Treatment of Designated Roth
Accounts
These final regulations provide that,
in accordance with section 325 of the
SECURE 2.0 Act, when determining the
account balance subject to section
401(a)(9) of the Code for distribution
calendar years up to and including the
calendar year including the employee’s
date of death, amounts held by the
employee in a designated Roth account
(as described in section 402A(b)(2)) are
not taken into account. These
regulations reserve a paragraph for rules
regarding how distributions from a
designated Roth account are treated for
purposes of section 401(a)(9) that are
included in a notice of proposed
rulemaking (REG–103529–23) in the
Proposed Rules section of this issue of
the Federal Register.
5. Disregard of Certain Distributions
The proposed regulations updated the
list of amounts of distributions and
deemed distributions that are not taken
into account in determining whether the
required minimum distribution has
been made for a calendar year. Under
the proposed regulations, that list was
implemented by a cross-reference to a
list of amounts in proposed § 1.402(c)–
2(c)(3) (relating to amounts that are not
treated as eligible rollover
distributions). The effect of the new
cross-reference was to add the following
items to the list of amounts that are
disregarded for purposes of determining
whether the required minimum
distribution has been made from a
defined contribution plan: prohibited
allocations that are treated as deemed
distributions pursuant to section 409(p);
distributions of premiums for health
and accident insurance under
§ 1.402(a)–1(e)(1)(i); amounts treated as
distributed with respect to collectibles
pursuant to section 408(m); and
distributions that are permissible
withdrawals from an eligible automatic
contribution arrangement within the
meaning of section 414(w).
These exclusions are reflected in the
final regulations with minor language
changes. However, consistent with
requests made by commenters, the final
regulations clarify that the disregard for
a distribution of premiums for health
and accident insurance does not include
a distribution described in section 402(l)
(that is, certain distributions with
respect to eligible retired public safety
officers from governmental plans that
are used to pay qualified health
insurance premiums).

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The final regulations reserve a
paragraph for the treatment of a
corrective distribution under section
4974(e) (that is, a distribution of a prior
year’s missed required minimum
distribution within the statutory
correction window that results in a
reduction in the excise tax rate for the
missed required minimum distribution)
or § 54.4974–1(g)(2) (relating to the
automatic waiver of the excise tax for a
missed required minimum distribution
for the year of an individual’s death).
These rules are included in a notice of
proposed rulemaking (REG–103529–23)
in the Proposed Rules section of this
issue of the Federal Register.
F. Section 1.401(a)(9)–6—Required
Minimum Distributions From Defined
Benefit Plans and Annuity Contracts
Section 1.401(a)(9)–6 provides rules
for required minimum distributions
from defined benefit plans and from
annuity contracts (including annuity
contracts that are used to pay benefits
under a defined contribution plan).
These rules are based on the 2004 final
regulations and are updated to reflect
the amendments to section 401(a)(9) of
the Code made by various provisions of
the SECURE 2.0 Act.
1. Rules Applicable to Defined Benefit
Plans
The proposed regulations, like the
2004 final regulations, reflected the
exceptions from the requirements of
section 401(a)(9)(C)(ii) and (iii) provided
under section 401(a)(9)(C)(iv) for
governmental plans and church plans.
Section 401(a)(9)(C)(iv) specifies that for
purposes of these exceptions, a church
plan is a plan maintained by a church
for church employees, and the term
church means any church as defined in
section 3121(w)(3)(A) or any qualified
church-controlled organization as
defined in section 3121(w)(3)(B). The
proposed regulations provided that, for
this purpose, the determination of
whether an employee is a church
employee is made without regard to
section 414(e)(3)(B).
One commenter requested that the
final regulations provide that the rules
under section 414(e)(3)(B) that treat
certain individuals as employees of a
church apply generally for the purposes
of determining whether a plan is
maintained for church employees under
section 401(a)(9)(C)(iv). The Treasury
Department and the IRS determined that
such a rule would yield an
inappropriate result in the case of a plan
for employees of a tax-exempt
organization that is associated with a
church unless the organization is a
qualified church-controlled

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organization. However, it would be
appropriate to treat a plan for selfemployed individuals who are licensed
ministers of a church as a plan
maintained by a church for employees
of a church. Accordingly, these
regulations provide that the
determination of whether an individual
is an employee of a church or qualified
church-controlled organization is made
in accordance with the rules of section
414(e)(3)(B) other than section
414(e)(3)(B)(ii). Thus, a licensed
minister who is self-employed but is
treated as an employee of a church
under section 414(e)(3)(B)(i) is
considered an employee of a church for
purposes of section 401(a)(9)(C)(iv).
The commenter also requested that
the exception apply to a multiple
employer plan covering employees of a
church or a qualified church-controlled
organization that also covers other
employees. These regulations do not
adopt that rule. Instead, they provide
that a plan is excepted from the
actuarial increase requirement only if at
least 85 percent of the individuals
covered by the plan are employees of a
church or a qualified church-controlled
organization. Thus, if the employees in
the plan who are not employees of a
church or a qualified church-controlled
organization constitute more than 15
percent of the covered employees, then
the plan is not treated as a church plan
that is exempted from the requirement
under section 401(a)(9)(C)(iii) to provide
an actuarial increase. However, these
regulations provide that this actuarial
increase requirement does not apply to
benefits accrued by an individual that
are attributable to service the individual
performs as an employee of a church or
a qualified church-controlled
organization (including service
performed as an employee described in
section 414(e)(3)(B)(i)).
Another commenter asked whether
the requirement to apply an actuarial
increase applies to benefits that are not
vested. These regulations provide that
the actuarial increase applies to benefits
that are accrued but treat benefits that
are not vested as accruing when they
become vested. Accordingly, benefits
that are not vested are not required to
be actuarially increased until they
become vested.
2. Applicability of Section 401(a)(9)(H)
to Annuity Contracts
One commentor noted that the
language in § 1.401(a)(9)–5(a)(5) of the
proposed regulations requiring that an
annuity contract purchased under a
defined contribution plan satisfy the
requirements of § 1.401(a)(9)–5(e)
(implementing the requirements of

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section 401(a)(9)(E)(iii), (H)(ii) and (iii)
that the employee’s entire interest be
distributed by the end of a specified
calendar year) was not clear (in that the
rule in § 1.401(a)(9)–5(e) of the proposed
regulations referred to the situation in
which an employee’s benefit is in the
form of an individual account). The
final regulations clarify that, if an
annuity contract is purchased under a
defined contribution plan, or the
annuity contract is otherwise subject to
section 401(a)(9)(H), then payments
under that annuity contract are not
permitted to extend past the calendar
year described in § 1.401(a)(9)–5(e).14
Several commenters observed that, as
of the annuity starting date, a
participant may have elected to receive
a joint and survivor annuity benefit
under an annuity contract with the
spouse as survivor annuitant, and that
the participant and spouse may divorce
after the annuity starting date.
Commenters asserted that, in such a
case, there should be no change in the
terms of the annuity contract on account
of the divorce (as would have been
required under the proposed regulations
if the former spouse were no longer
considered to be a spouse and were not
an alternate payee under a qualified
domestic relations order (QDRO) issued
in accordance with section 414(p)
specifying that the former spouse is to
be treated as the surviving spouse for
purposes of the annuity contract).
Consistent with these comments, the
final regulations provide that, for a
designated beneficiary who is a
contingent annuitant under an annuity
contract, the determination of whether
that beneficiary is an eligible designated
beneficiary is made as of the annuity
starting date. Thus, if the employee
elects a joint and survivor annuity with
the employee’s spouse as the contingent
annuitant, and they divorce after the
annuity starting date, then the former
spouse who is a designated beneficiary
and the contingent annuitant under the
contract is treated as an eligible
designated beneficiary without regard to
whether there is a QDRO. This approach
is consistent with the requirements of
rules of sections 401(a)(11) and 417, and
§ 1.401(a)–20, Q&A–25(b)(3), under
which the spouse as of the annuity
starting date continues to be entitled to
a qualified joint and survivor annuity
elected under the plan if the participant
14 One commenter asked for clarification of
whether section 401(a)(9)(H) applies in the case of
an annuity provided under a defined benefit plan
that is attributable to a direct rollover from a
defined contribution plan (as described in Rev. Rul.
2012–4, 2012–8 IRB 386). In that case, because the
annuity is provided under a defined benefit plan,
it is not subject to section 401(a)(9)(H).

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and the spouse divorce after the annuity
starting date.
3. Increasing Payments
Similar to the 2004 final regulations,
the proposed regulations provided that
all payments under a defined benefit
plan or annuity contract must be
nonincreasing, subject to a number of
exceptions. The proposed regulations
retained the exceptions in the 2004 final
regulations and added further
exceptions under which annuity
payments under a defined benefit plan
or annuity contract may increase. Under
the proposed regulations, the permitted
increases in annuity payments were
different for defined benefit plans and
annuity contracts issued by insurance
carriers. In the case of an annuity
contract, certain of the exceptions to the
nonincreasing rule in the proposed
regulations applied only if the total
future expected payments under the
contract exceed the total value being
annuitized (that is, the value of the
employee’s entire interest being
annuitized).
One commenter requested that each of
the annuity payment increases
permitted under a defined benefit plan
(such as a fixed percentage increase in
annuity payments that is less than 5
percent) be permitted for annuity
contracts without regard to the
condition that the total future expected
payments exceed the total value being
annuitized. Consistent with this
comment, and in accordance with
section 401(a)(9)(J)(i) (as added to the
Code by section 201 of the SECURE 2.0
Act), these regulations provide that the
permitted increases in annuity
payments under a defined benefit plan
generally are also available under an
annuity contract and eliminate the
condition on increases under an annuity
contract that the total future expected
payments under the contract exceed the
total value being annuitized. Thus, the
permitted increases in annuity
payments under an annuity contract are
expanded under the regulations to
include increases by a constant
percentage, applied not less frequently
than annually, at a rate that is less than
5 percent per year. However, consistent
with the simplification of the permitted
annuity increases under section
401(a)(9)(J), an increase of 5 percent or
more per year is not permitted for an
annuity contract under the final
regulations, even if the annuity
payments could have met the condition
for that increase under the 2004
regulations.
These regulations also include
modifications to the permitted increases
for annuity contracts to reflect the

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addition of section 401(a)(9)(J)(ii)
through (iv) to the Code. Thus, the
following increases in annuity payments
are permitted: (1) an increase as a result
of the shortening of the payment period
with respect to the annuity or a full or
partial commutation of the future
annuity payments, provided that the
amount of the payment pursuant to the
commutation is determined using
reasonable actuarial methods and
assumptions, as determined in good
faith by the issuer of the contract; 15 (2)
a payment of an amount that is in the
nature of a dividend, provided that the
issuer of the contract uses reasonable
actuarial methods and assumptions, as
determined in good faith, when
calculating the initial annuity payments,
the issuer’s experience with respect to
those factors, and the amount of the
dividend or similar payment; and (3) a
final payment upon death that does not
exceed the amount by which the total
consideration paid for the contract
exceeds the aggregate amount of prior
distributions under the contract.
In addition, these regulations provide
rules that apply if the annuity contract
purchased under a defined benefit plan
is merely providing the same benefits
that would have been payable under the
defined benefit plan if an annuity
contract had not been purchased.16 In
that case, the annuity contract is
permitted to have the same increases in
annuity payments as under the qualified
defined benefit rules. This could occur,
for example, if an annuity contract is
purchased under a terminating defined
benefit plan.
One commenter requested additional
guidance as to whether section 401(a)(9)
prohibits a plan from offering a period
of time during which a participant or
beneficiary may elect to receive a lump
sum payment instead of future annuity
payments. These regulations do not
address this issue. As described in
Notice 2019–18, 2019–13 IRB 915, the
Treasury Department and the IRS will
continue to study the issue of retiree
lump sum windows. This study will
take into account the enactment of
section 342 of the SECURE 2.0 Act.
15 This commutation may be needed to comply
with the requirement that, if the employee’s
designated beneficiary is not an eligible designated
beneficiary, then payments under the annuity
contract may not extend beyond the calendar year
that includes the tenth anniversary of the date of
the employee’s death.
16 The final regulations also make a change to
§ 1.401(a)(9)–6(d) to broaden the applicability of the
annuity rules by removing the requirement that an
annuity be purchased with the employee’s benefit
under the plan.

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4. Qualifying Longevity Annuity
Contracts
In 2014, the Treasury Department and
the IRS amended the regulations under
section 401(a)(9) to provide special rules
that apply if a deferred annuity that
commences annuity payments at an
advanced age is purchased with a
portion of the employee’s interest under
a defined contribution plan. See 79 FR
37633. Under those rules, if the annuity
contract satisfies certain requirements,
then the contract is a QLAC and the
value of that QLAC is excluded from the
account balance under the plan. Those
requirements include that: (1)
distributions commence not later than
age 85; (2) the premiums paid with
respect to all contracts intended to be
QLACs not exceed an inflation-adjusted
$125,000 (dollar limitation) or 25
percent of the employee’s account
balance (percentage limitation); and (3)
the contract not make available any
commutation benefit, cash surrender
value, or other similar feature.
The proposed regulations retained
these premium limitations for QLAC
status. However, in accordance with
section 202(a)(1) and (2) of the SECURE
2.0 Act, the final regulations eliminate
the percentage limitation and increase
the initial amount of the inflationadjusted dollar limitation from $125,000
to $200,000. These higher limits apply
to an annuity contract that was
purchased before December 29, 2022,
and that satisfied the requirements to be
a QLAC as of that date. Thus, the
contract need not be exchanged for
another annuity contract on or after that
date in order for the employee to take
advantage of the higher premium limits
under section 202(a)(1) and (2) of the
SECURE 2.0 Act.
The proposed regulations included an
exception to the requirement that the
contract not include any commutation
benefit, cash surrender value, or similar
feature by permitting such a feature
before the required beginning date. This
change was proposed so that if a plan’s
investment options include a series of
target date funds to which the relief
under Notice 2014–66, 2014–46 IRB
820, applies,17 those target date funds
could include QLACs among their
assets. Commenters observed that some
State laws prohibit the purchase of an
annuity contract that does not provide
for a right to rescind the contract within
a specified short period of time and
17 Notice 2014–66 provides relief under section
401(a)(4) of the Code to enable plans to provide
lifetime income by offering, as investment options,
a series of target date funds that include deferred
annuities among their assets, even if some of the
target date funds within the series are available only
to older participants.

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requested that such a rescission right be
accommodated for a QLAC. Consistent
with this comment and as instructed by
section 202(a)(4) of the SECURE 2.0 Act,
the final regulations add an exception
under which the contract may provide
a right to rescind the contract within a
period not exceeding 90 days after
purchase.
One commenter asked how an issuer
of a QLAC should report that a taxpayer
utilized the option to commute a
contract before the required beginning
date. The final regulations do not
modify the reporting required under
§ 1.6047–2 and do not provide for a
reversal of any premiums previously
paid for a contract that is commuted
prior to the required beginning date or
rescinded within a short period after
purchase. This is because the purpose of
these exceptions is to accommodate the
possibility that the contract will permit
the commutation or recission and not to
accommodate an employee who chooses
to commute or rescind the contract and
later decides to purchase another QLAC.
The proposed regulations provided
that, for purposes of applying the
limitation on premiums used to
purchase a QLAC, if another insurance
contract is exchanged for a QLAC then
the fair market value of the exchanged
contract will be treated as a premium
paid for the QLAC. One commenter
suggested that if an insurance contract
is surrendered for its cash surrender
value, the surrender extinguishes all
benefits and other characteristics of the
contract, and the cash is used to
purchase a QLAC, then only the cash
from the surrendered contract should be
treated as a premium paid for the QLAC.
These regulations include that
modification to the rule.
One commenter asked for continued
treatment of a former spouse as a spouse
if the participant and spouse divorce
after the QLAC is purchased but before
the annuity starting date in the absence
of a QDRO providing for this treatment.
Consistent with this comment and as
instructed in section 202(a)(3) of the
SECURE 2.0 Act, these final regulations
provide that the payment of survivor
benefits to the employee’s former
spouse under an annuity contract will
not cause the contract to fail to satisfy
the requirements to be treated as a
QLAC merely because the divorce
between the employee and that former
spouse occurred after the contract is
purchased, provided that a QDRO
satisfying certain requirements has been
issued in connection with the divorce.
Specifically, the QDRO must: (1)
provide that the former spouse is
entitled to the survivor benefits under
the contract; (2) provide that the former

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spouse is treated as a surviving spouse
for purposes of the contract; (3) not
modify the treatment of the former
spouse as the beneficiary under the
contract who is entitled to the survivor
benefits; or (4) not modify the treatment
of the former spouse as the measuring
life for the survivor benefits under the
contract.18
Section 202(a)(3) of the SECURE 2.0
Act provides for a comparable rule in
the case of a plan not subject to the
QDRO rules of section 414(p) of the
Code or section 206(d) of the Employee
Retirement Income Security Act of 1974,
Public Law 93–406, 88 Stat. 829, as
amended (ERISA). These regulations
reserve a paragraph for this comparable
rule, which is included in a notice of
proposed rulemaking (REG–103529–23)
in the Proposed Rules section of this
issue of the Federal Register.
G. Section 1.401(a)(9)–7—Rollovers and
Transfers
As was the case for the proposed
regulations, § 1.401(a)(9)–7 retains the
rollover and transfer rules that are in the
2002 final regulations.

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H. Section 1.401(a)(9)–8—Special Rules
Section 1.401(a)(9)–8 provides special
rules applicable to satisfying the
minimum distribution requirement.
The proposed regulations retained the
rules from the 2002 final regulations
under which section 401(a)(9) may be
applied separately with respect to the
separate interests of each of the
employee’s beneficiaries under a plan.
The final regulations clarify that the
separate application of section 401(a)(9)
only applies for calendar years after the
death of the employee (and thus, does
not apply for the calendar year of the
employee’s death) and adds expenses to
the list of items that must be allocated
in a reasonable and consistent manner
among the separate accounts.
The final regulations also restore
flexibility from § 1.401(a)(9)–5 in the
2002 final regulations relating to the
required minimum distribution for the
calendar year of the employee’s death
by providing that a required minimum
distribution must be paid to ‘‘any
beneficiary’’ in the year of death rather
than to ‘‘the beneficiary.’’ Thus, for
example, if an employee who is
required to take a distribution in a
calendar year dies before taking that
18 The Treasury Department and the IRS remind
taxpayers that in the case of a QDRO that does not
provide that either the former spouse is entitled to
the survivor benefits under the contract or that the
former spouse is treated as a surviving spouse for
purposes of the contract, there is a risk that the
spousal rights rules of sections 401(a)(11) and 417
will be violated if the employee remarries.

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distribution and has named more than
one designated beneficiary, then any of
those beneficiaries can satisfy the
employee’s requirement to take a
distribution in that calendar year (as
opposed to each of the beneficiaries
being required to take a proportional
share of the unpaid amount).
The proposed regulations generally
retained the separate account rules
applicable to beneficiaries after the
death of the employee that were
adopted in the 2002 final regulations,
including the rule that prohibits
separate application of section 401(a)(9)
to separate interests in a trust. However,
in light of the enactment of special rules
that apply to an applicable multibeneficiary trust described in section
401(a)(9)(H)(iv)(I) (a trust with at least
one disabled or chronically ill
beneficiary that provides that it is to be
immediately divided upon the death of
the employee into separate trusts for
each beneficiary), the proposed
regulations provided an exception to
that prohibition that would permit
separate application of section 401(a)(9)
to those separate trusts.
Consistent with requests made by
commenters, the final regulations
expand the exception in the proposed
regulations to permit separate
application of section 401(a)(9) to the
separate interests of beneficiaries of a
see-through trust if certain requirements
are met. This exception applies to the
separate interests of beneficiaries of a
see-through trust if the terms of that
trust provide that it is to be divided
immediately upon the death of the
employee into separate shares for one or
more trust beneficiaries (without regard
to whether any of the beneficiaries are
disabled or chronically ill).
For this purpose, the final regulations
provide that a trust is divided
immediately upon the death of the
employee into separate shares for one or
more trust beneficiaries only if the trust
is terminated, the separate interests of
the trust beneficiaries are held in
separate trusts, and there is no
discretion as to the extent to which the
separate trusts will be entitled to receive
post-death distributions attributable to
the employee’s interest in the plan. In
addition, the final regulations clarify
that a trust does not fail to be divided
immediately upon the death of the
employee merely because there are
administrative delays between the date
of the employee’s death and the date on
which the trust actually is divided and
terminated provided that any amounts
received by the trust during this period
are allocated as if the trust had been
divided on the date of the employee’s
death.

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58901

II. Section 402(c) Regulations
The proposed regulations provided
updates to existing rules of § 1.402(c)–
2 that reflect certain statutory
amendments made to section 402(c)
since the regulations were issued in
1995. Those amendments are described
in the Background section of this
preamble under the heading Section
402(c)—Rollovers.
A. Special Rule for Certain Distributions
to Surviving Spouses
The proposed regulations provided a
new rule to limit the ability of a
surviving spouse to use the 5-year rule
or the 10-year rule to defer distributions
beyond the calendar year that annual
distributions would have been required
to commence and then, after that
calendar year, commence annual
distributions. This rule, which applied
in limited circumstances, would have
been used to determine, with respect to
a distribution to the employee’s
surviving spouse to whom the 5-year
rule or 10-year rule applies, the portion
of that distribution that is treated as a
required minimum distribution under
section 401(a)(9) (and thus is not an
eligible rollover distribution). This
special rule, which treated a portion of
a distribution made before the last year
of the 5-year or 10-year period
(whichever applies to the spouse) as a
required minimum distribution, applied
if: (1) the distribution was made in or
after the calendar year the surviving
spouse attains age 72; and (2) the
surviving spouse rolled over some or all
of the distribution to an eligible
retirement plan under which the
surviving spouse is not treated as the
beneficiary of the employee.
Under this special rule, the portion of
the distribution that is treated as a
required minimum distribution was the
cumulative total, over a span of years,
of the hypothetical required minimum
distribution for each year had the life
expectancy rule applied (or, in the case
of a defined benefit plan, had the
annuity payment rule applied), reduced
by any amounts actually distributed to
the surviving spouse during that span of
years. The span of years began with the
first applicable year (defined as the later
of the calendar year in which the
surviving spouse reaches age 72 and the
calendar year in which the employee
would have reached age 72) and ended
in the year of distribution.
In calculating the hypothetical
required minimum distributions from a
defined contribution plan for a calendar
year under this special rule (the
determination year), the proposed
regulations provided that an adjusted

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account balance would be used. The
adjusted account balance for a calendar
year was determined by reducing the
account balance that normally would be
used to determine the required
minimum distribution for that
determination year by the excess (if any)
of: (1) the sum of the hypothetical
required minimum distributions
beginning with the first applicable year
and ending with the calendar year
preceding the calendar year of the
determination, over (2) the distributions
actually made to the surviving spouse
during those calendar years.
Several commenters requested that
the final regulations eliminate the
special rule for distributions to
surviving spouses. In support of that
request, commenters point to the
absence of a similar rule in the statute
(both pre- and post-SECURE Act).
Commenters also argued that in the case
of an individual with no financial
advisor, determining the amount of the
hypothetical required minimum
distribution that is ineligible for rollover
would be difficult because it requires
complex calculations based on amounts
actually distributed in prior years and
reduced account balances for each year
past what would have been the spouse’s
required beginning date that are based
on the current account balance. Other
commenters argued that plan
administrators would not have the
knowledge of whether a beneficiary was
rolling over a distribution to their own
IRA or to a beneficiary IRA and
accordingly, what portion of that
distribution is an eligible rollover
distribution. As a result, the plan
administrator would not know the
proper withholding amount for the
distribution.
The final regulations do not eliminate
this special rule. The Treasury
Department and the IRS concluded that
this rule will prevent a spouse who will
be taking annual distributions from
effectively delaying the commencement
of those distributions for a number of
years beyond the spouse’s required
beginning date (or, if later, the year in
which the employee would have
reached the applicable age). The
regulations accomplish this result by
requiring the spouse to catch up on
distributions that would have been
made had the spouse been taking annual
life expectancy payments starting in the
year the spouse reached the applicable
age (or, if later, the year in which the
employee would have reached the
applicable age). While there was no
similar rule in effect prior to the
enactment of section 401(a)(9)(H), the
potential number of years that the
commencement of life expectancy

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distributions may be delayed is much
higher as a result of the expansion of the
5-year rule into a 10-year rule.
Although this special rule is not
eliminated, to reflect that it is intended
only to prevent the lengthened delay in
commencement that resulted from the
expansion of the 5-year rule into a 10year rule, the final regulations provide
that this rule does not apply in the case
of a surviving spouse who is subject to
the 5-year rule. Accordingly, this rule
will apply only in the case of surviving
spouse who is the beneficiary of an
employee in a defined contribution
plan. In addition, the final regulations
provide that the hypothetical required
minimum distribution is calculated
assuming that the election described in
§ 1.401(a)(9)–5(g)(3)(i) is in effect for
that spouse.19
The final regulations also provide that
plan administrators may make
reasonable assumptions related to
distributions to the surviving spouse.
Specifically, a plan administrator may
assume that a surviving spouse to whom
this special rule applies will roll over
only the portion of the distribution that
is eligible for rollover (in accordance
with this rule) to an eligible retirement
plan under which that spouse is not
treated as the beneficiary of the
employee. Thus, a plan administrator
may treat that portion of the distribution
as an eligible rollover distribution for
purposes of sections 401(a)(31) and
3405(c). However, pursuant to
§ 1.402(c)–2(k)(2), a surviving spouse
may roll over the entire distribution to
an individual retirement plan under
which that spouse is treated as the
beneficiary of the employee.
B. Distributions to Non-Spousal
Beneficiaries
Like the proposed regulations, these
regulations provide that a designated
beneficiary who is not a spouse may
elect, under section 402(c)(11), to have
any portion of a distribution that fits
within the definition of an eligible
rollover distribution transferred via a
direct trustee-to-trustee transfer to an
IRA established for the purpose of
receiving that distribution. If that
19 Commenters requested an expansion of the
numerical example of the application of the rules
for determining the amount of a surviving spouse’s
distribution that is a required minimum
distribution and therefore cannot be rolled over that
were included in proposed § 1.402(c)–2(j)(3)(iii)
Because of the change to the calculation of the
hypothetical required minimum distributions to
assume that § 1.401(a)(9)–5(g)(3)(i) is in effect for
the surviving spouse, a paragraph is reserved for the
example in these regulations, and the numerical
example is included in a notice of proposed
rulemaking (REG–103529–23) in the Proposed
Rules section of this issue of the Federal Register.

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transfer is made pursuant to section
402(c)(11), the distribution is treated as
an eligible rollover distribution; the IRA
is treated as an inherited account or
annuity (as defined in section
408(d)(3)(C), so that distributions from
the inherited IRA are not eligible to be
rolled over); and the IRA is subject to
section 401(a)(9)(B) (other than section
401(a)(9)(B)(iv)). Consistent with a
request from a commenter, these
regulations clarify that a see-through
trust may be treated as a designated
beneficiary for purposes of section
402(c)(11)(A).
If the distribution is made directly to
a beneficiary who is not the surviving
spouse of the employee (instead of a
direct trustee-to-trustee transfer to an
inherited IRA), then these regulations
provide that the distribution is not an
eligible rollover distribution for
purposes of section 402(c)(4) (that is, it
cannot be rolled over). However, in
response to comments requesting clarity
on the issue, these regulations provide
that the distribution described in the
preceding sentence is generally still
subject to 20-percent withholding under
section 3405(c) (which sets forth the
withholding requirements for eligible
rollover distributions as defined in
section 402(f)(2)(A)). In this case, 20percent withholding is required because
section 402(f)(2)(A) specifies that the
term ‘‘eligible rollover distribution’’ has
the same meaning as in section 402(c)(4)
but also includes a distribution to a nonspouse designated beneficiary that
would be treated as an eligible rollover
distribution if the requirements of
section 402(c)(11) were satisfied. Under
this definition, the amount that would
be an eligible rollover distribution if the
requirements of section 402(c)(11) were
satisfied excludes amounts treated as a
required minimum distribution.
III. Section 403(b) Regulations
The final regulations regarding
section 403(b) plans are the same as
proposed, except for a few changes. The
final regulations clarify that the rule
under which the minimum distribution
requirements of section 401(a)(9) are
applied to section 403(b) contracts in
accordance with the provisions in
§ 1.408–8 refers to the provisions in
§ 1.408–8 that apply to an IRA that is
not a Roth IRA. With respect to a
designated Roth account in a section
403(b) contract, the final regulations
reflect the provisions of section 325 of
the SECURE 2.0 Act under which no
required minimum distributions are due
from a designated Roth account during
the lifetime of the employee. Under the
final regulations, the rules of
§ 1.401(a)(9)–3(a)(2) (which provides

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that if an employee’s entire interest
under a defined contribution plan is in
a designated Roth account, then the
employee is treated as having died
before the required beginning date),
§ 1.401(a)(9)–5(b)(3) (which excludes
amounts held in a designated Roth
account from the employee’s account
balance during the employee’s lifetime),
and § 1.401(a)(9)–5(g)(2)(iii) (treatment
of distributions from designated Roth
accounts, which is reserved in these
regulations) apply, rather than the rules
of § 1.408–8(b)(1)(ii) that apply to a Roth
IRA. Lastly, the final regulations
provide that the changes to § 1.403(b)–
6 apply for purposes of determining
required minimum distributions for
calendar years beginning on or after
January 1, 2025.
In the preamble to the proposed
regulations, the Treasury Department
and the IRS requested comments on
possible changes to the required
minimum distribution rules for section
403(b) plans, so that they would more
closely follow the required minimum
distribution rules for qualified plans (as
opposed to IRAs). Commenters made
various suggestions in response to this
request and requested that any of those
changes not be implemented in these
final regulations. The Treasury
Department and IRS are considering
these comments, and any further
changes relating to the required
minimum distribution rules for section
403(b) plans will be set forth in separate
guidance.
IV. Section 1.408–8—Distribution
Requirements for IRAs
These regulations amend § 1.408–8
(which sets forth the required minimum
distribution rules for IRAs) to
implement the changes made to section
401(a)(9) under the SECURE Act and the
SECURE 2.0 Act. Generally, the
minimum distribution required from an
individual retirement account is
determined in accordance with the rules
of § 1.401(a)(9)–5 and the minimum
distribution required from an individual
retirement annuity is determined in
accordance with the rules of
§ 1.401(a)(9)–6 (including § 1.401(a)(9)–
6(d)(2)).
Like the proposed regulations, these
final regulations retain the rules from
the 2002 regulations under which the
required minimum distribution from
one IRA is permitted to be distributed
from another IRA in order to satisfy
section 401(a)(9), subject to the certain
restrictions involving inherited IRAs
and Roth IRAs. To implement the
statutory instruction under section
204(c) of the SECURE 2.0 Act, these
final regulations provide that, subject to

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the same limitations that apply to
aggregation of IRAs generally, an
individual who holds an IRA that is an
annuity contract described in section
408(b) may elect to aggregate that IRA
with one or more IRAs with account
balances that the individual holds and
apply the optional aggregation rule of
§ 1.401(a)(9)–5(a)(5)(iv) (described in
section I.E.2 of this Summary of
Comments and Explanation of
Revisions) with respect to the annuity
contract and the account balances under
those IRAs as if the account balances
were the remaining account balances
following the purchase of the annuity
contract with a portion of those account
balances.
In addition, whether a designated
beneficiary of an IRA owner is an
eligible designated beneficiary and
whether the beneficiaries of a trust are
treated as beneficiaries of the IRA owner
is generally determined in accordance
with § 1.401(a)(9)–4. Consistent with
requests made by commenters, these
regulations provide that, in determining
whether an IRA owner’s designated
beneficiary is disabled or chronically ill
within the meaning of §§ 1.401(a)(9)–
4(e)(4) and (5), respectively, or whether
the beneficiaries of a trust are treated as
beneficiaries of the IRA owner, the
required documentation described in
§ 1.401(a)(9)–4(e)(7), or § 1.401(a)(9)–
4(h), respectively, need not be provided
to the IRA custodian, issuer, or trustee.
The proposed regulations generally
incorporated the rules in Notice 2007–
7, Q&As–17 and 19 (relating to the
carryover of the method of determining
required minimum distributions from a
plan to a receiving IRA when a
beneficiary is making a transfer
described in section 402(c)(11)) and
extended those rules to provide
comparable treatment to a surviving
spouse. These rules relating to the
distribution method of the receiving IRA
did not apply to a surviving spouse
when that spouse is rolling over a
distribution to the spouse’s own account
in a qualified plan or to the spouse’s
own IRA (because distributions would
then be made in accordance with
section 401(a)(9)(A) instead of section
401(a)(9)(B)). In that case, the proposed
regulations provided that the amount of
the distribution treated as a required
minimum distribution, and thus not
eligible to be rolled over, is determined
in accordance with § 1.402(c)–2(j)
(including the rule under which in
certain circumstances a spouse who
elects the 10-year rule is required to
treat a portion of any distribution as a
required minimum distribution as
described in section II.A of this

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58903

Summary of Comments and Explanation
of Revisions).
To coordinate with the rules in
§ 1.402(c)–2(j), the proposed regulations
added a deadline for the election under
which a surviving spouse may elect to
treat a decedent’s IRA as the spouse’s
own. Specifically, a surviving spouse
must make that election by the later of
(1) the end of the calendar year in which
the surviving spouse reaches age 72, and
(2) the end of the calendar year
following the calendar year of the IRA
owner’s death. Under the proposed
regulations, if the surviving spouse were
to miss that deadline, the surviving
spouse still would be permitted to roll
over distributions to the spouse’s own
IRA but would be subject to the special
rule on the catch-up of hypothetical
required minimum distributions
described in section II of this Summary
of Comments and Explanation of
Revisions.
Consistent with requests made by
commenters, the final regulations
eliminate the deadline described in the
preceding paragraph. Instead, these
regulations provide a timing rule that
applies on a yearly basis and only if the
special rule on the catch-up of
hypothetical required minimum
distributions would apply to the IRA
owner’s surviving spouse had a
distribution been made directly to the
surviving spouse in the calendar year. In
addition, these regulations provide that,
even if the timing rule otherwise
applies, a surviving spouse may still
make an election to treat an IRA as the
surviving spouse’s own IRA, but only if
that election does not apply to amounts
in the IRA that would be treated as
required minimum distributions
pursuant to § 1.402(c)–2(j)(4)(ii) had
they been distributed in that calendar
year. Thus, the election can be made
only in a calendar year after the
amounts treated as required minimum
distributions under § 1.402(c)–2(j)(4)(ii)
for that calendar year have been
distributed from the IRA.
These regulations also clarify the
rules for the beneficiaries of an owner
of multiple IRAs that are aggregated for
purposes of satisfying the required
minimum distribution rules. The new
rules apply in the case of an IRA owner
who dies before taking the total required
minimum distribution in a calendar
year (that is, there is a shortfall) if the
beneficiary designations with respect to
all of those IRAs are not identical. In
that case, each of the owner’s IRAs is
subject to a requirement to distribute a
proportionate share of the shortfall to a
beneficiary of that IRA. This allocation
of the proportionate share of the
shortfall to a particular IRA is made

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without regard to whether some of the
required minimum distribution for the
calendar year was already made to the
IRA owner from that IRA. Similar rules
apply in the case of a beneficiary of
multiple IRAs that are aggregated for
purposes of satisfying the required
minimum distribution rules if a
required minimum distribution is due
for the calendar year of the beneficiary’s
death to the extent that the amount was
not distributed to the beneficiary.
The proposed regulations provided
that amounts that are treated as
distributed pursuant to section 408(e)
(relating to the loss of tax exemption
when an IRA owner engages in a
prohibited transaction or borrows any
money under an individual retirement
annuity, and the deemed distribution of
amounts when an individual uses a
portion of an individual retirement
account as security for a loan) or
amounts that are deemed to be
distributed with respect to collectibles
pursuant to section 408(m) may not be
used to satisfy the required minimum
distribution for a calendar year. Several
commenters argued that final
regulations should not exclude amounts
treated as distributed under those
sections for purposes of determining
whether section 401(a)(9) has been
satisfied. The commenters asserted that
in this case, the IRA account balance
could be zero and without any assets
from which to take a required minimum
distribution, the IRA owner would be
required to pay an excise tax.
The final regulations retain the rules
from the proposed regulations with
minor changes. However, the Treasury
Department and the IRS remind
taxpayers that, pursuant to
§ 1.401(a)(9)–5(a)(1), the required
minimum distribution amount will
never exceed the entire account balance
on the date of the distribution.
Accordingly, because section
408(e)(2)(B) and (3) reduces an IRA
owner’s account balance to zero as of
the first day of the taxable year, the
required minimum distribution for that
calendar year would also be zero. By
contrast, section 408(e)(4) and (m) does
not reduce an IRA owner’s account
balance by the deemed distribution and
accordingly, the amount of the required
minimum distribution for a calendar
year is not affected by the deemed
distribution. In that case, allowing the
deemed distribution that results from
the use of the IRA to secure a loan or
to purchase a collectible to be used to
satisfy the requirement to take a
minimum distribution would reduce the
deterrent effect of the statutorily
specified tax consequence of those
actions.

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The proposed regulations provided
that the limitation on premiums paid for
a QLAC purchased under an IRA is the
lesser of a dollar limitation and a
percentage limitation. The percentage
limitation in the proposed regulations
was 25-percent of the total of all IRA
account balances that an individual
holds as the IRA owner (other than Roth
IRAs) as of December 31 of the calendar
year preceding the date the premium
payment is made. Several commenters
requested changes that would address
the issue of the percentage limitation in
the case of a taxpayer who has no IRAs
other than a newly established IRA that
received a rollover from a qualified plan
(because, in such a case, the IRA did not
have an account balance as of December
31 of the prior calendar year and thus,
the taxpayer would not be permitted to
purchase a QLAC with the assets of the
IRA until the year after the year of the
rollover). However, section 202(a)(1) of
the SECURE 2.0 Act eliminated the
percentage limitation. Accordingly,
these final regulations provide that the
limitation on premiums is the dollar
limitation provided for in section
202(a)(2) of the SECURE 2.0 Act
($200,000, adjusted for inflation).
V. Section 1.457–6(d)—Minimum
Required Distributions for Eligible
Plans
Several comments were received
asking whether the rules of section
401(a)(9)(H) apply to an eligible
deferred compensation plan of a taxexempt entity. Section 401(a)(9)(H)(vi)
provides that all eligible retirement
plans (as defined in section 402(c)(8)(B)
(other than certain defined benefit
plans)) are treated as defined
contribution plans for purposes of
applying the rules of section
401(a)(9)(H). This provision does not
provide an exhaustive list of the plans
that are treated as defined contribution
plans for purposes of applying the rules
of section 401(a)(9)(H). Accordingly, the
final regulations clarify that, if an
eligible deferred compensation plan is
subject to the rules of § 1.401(a)(9)–5,
then the plan must also satisfy the rules
of section 401(a)(9)(H) (without regard
to whether the plan is maintained by a
tax-exempt entity).
VI. Section 54.4974–1—Excise Tax on
Accumulations in Qualified Retirement
Plans
The proposed regulations provided
for an automatic waiver of the excise tax
that applies in the case of an individual
who had a minimum distribution
requirement in a calendar year and died
in that calendar year before satisfying
that minimum distribution requirement.

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In this situation, a beneficiary of the
individual must satisfy the minimum
distribution requirement by the end of
that calendar year. However, if that
beneficiary fails to satisfy the minimum
distribution requirement in that
calendar year, then the proposed
regulations provided that the excise tax
for that failure is automatically waived
provided that the beneficiary takes the
missed required minimum distribution
no later than the tax filing deadline
(including extensions thereof) for the
taxable year of that beneficiary that
begins with or within that calendar year.
Consistent with requests made by
commenters, the final regulations
extend the deadline for the beneficiary
to take the missed required minimum
distribution and be eligible for the
automatic waiver. The new deadline is
the later of the tax filing deadline for the
taxable year of the beneficiary that
begins with or within the calendar year
in which the individual died and the
end of the following calendar year.
These regulations also reflect the
amendments made to section 4974 by
section 302(a) of the SECURE 2.0 Act
effective for taxable years beginning
after December 29, 2022. In accordance
with section 302(a) of the SECURE 2.0
Act, these regulations provide that the
tax imposed by section 4974(a) of the
Code generally is equal to 25 percent of
the amount by which the required
minimum distribution exceeds the
actual amount distributed during the
calendar year. In addition, these
regulations reflect section 4974(e)
(which was added to the Code by
section 302(b) of the SECURE 2.0 Act)
and provide that the excise tax is
reduced to 10 percent in the case of a
taxpayer who, by the last day of the
correction window, receives a corrective
distribution from the qualified
retirement plan or eligible deferred
compensation plan of the amount by
which the required minimum
distribution exceeds the actual amount
distributed during the calendar year
from that plan and submits a return
reflecting the excise tax. For purposes of
these regulations, the correction
window ends on the earliest of: (1) the
date a notice of deficiency under section
6212 with respect to the tax imposed by
section 4974(a) is mailed; (2) the date on
which the tax imposed by section
4974(a) is assessed; or (3) the last day of
the second taxable year that begins after
the end of the taxable year in which the
tax under section 4974(a) is imposed.
In addition, these final regulations
provide that if the minimum
distribution was required to be paid
from a particular qualified retirement
plan or eligible deferred compensation

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plan, then the corrective distribution
must be made from that particular
qualified retirement plan or eligible
deferred compensation plan. However,
if the requirement to take a minimum
distribution could have been satisfied
by a payment from any one of a number
of qualified retirement plans (such as an
individual retirement account under
section 408(a) or a section 403(b) plan),
then the corrective distribution may be
made from any one of those qualified
retirement plans.
Applicability Dates
Amended §§ 1.401(a)(9)–1 through
1.401(a)(9)–9, 1.403(b)–6(e), and 1.408–
8 apply for purposes of determining
required minimum distributions for
calendar years beginning on or after
January 1, 2025. Amended § 1.402(c)–2
applies for distributions made on or
after January 1, 2025. Amended
§ 54.4974–1 applies for taxable years
beginning on or after January 1, 2025.
For earlier years, taxpayers must apply
the preexisting final regulations, but
taking into account a reasonable, good
faith interpretation of the amendments
made by sections 114 and 401 of the
SECURE Act. Compliance with the
proposed regulations will satisfy that
requirement. For the 2023 and 2024
distribution calendar years, taxpayers
must also take into account a
reasonable, good faith interpretation of
the amendments made by sections 107,
201, 202, 204, and 337 of the SECURE
2.0 Act.
Special Analyses
I. Regulatory Planning and Review
Pursuant to the Memorandum of
Agreement, Review of Treasury
Regulations under Executive Order
12866 (June 9, 2023), tax regulatory
actions issued by the IRS are not subject
to the requirements of section 6 of
Executive Order 12866, as amended.
Therefore, a regulatory impact
assessment is not required.

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II. Paperwork Reduction Act
The Paperwork Reduction Act of 1995
(44 U.S.C. 3501–3520) generally
requires that a Federal agency obtain the
approval of the Office of Management
and Budget (OMB) before collecting
information from the public, whether
such collection of information is
mandatory, voluntary, or required to
obtain or retain a benefit. An agency
may not conduct or sponsor, and a
person is not required to respond to, a
collection of information unless the
collection of information displays a
valid control number.

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These regulations include third-party
disclosures and recordkeeping
requirements, in §§ 1.401(a)(9)–
3(b)(4)(iii) and (c)(5)(iii), 1.401(a)(9)–
4(e)(7), and 1.401(a)(9)–4(h), that are
required to determine whether a
beneficiary is an eligible designated
beneficiary entitled to distributions over
the beneficiary’s life expectancy and to
record the names of the taxpayer’s
beneficiaries under the trust. These
collections of information would
generally be used by the IRS for tax
compliance purposes and by plan
administrators to facilitate compliance
with the required minimum distribution
requirements under section 401(a)(9).
The likely respondents to these
collections are beneficiaries of
employees participating in retirement
plans (and, in limited circumstances,
the participating employees).
Sections 1.401(a)(9)–3(b)(4)(iii) and
(c)(5)(iii) allow a plan to permit an
eligible designated beneficiary in that
plan to elect between the 5-year rule (or
10-year rule, if applicable) and life
expectancy rule in the case of an
employee who dies before the
employee’s required beginning date.
This election only arises in the context
of a plan (and not an IRA) because the
plan administrator will need that
information to satisfy the required
minimum distribution requirements
with respect to the beneficiary. An IRA
custodian has no obligation to ensure
compliance with the required minimum
distribution rules, so there is no need
for a beneficiary of an IRA to file any
type of election with the custodian.
Although the plan may provide that the
employee may make this election, it is
expected that more commonly, the
employee’s beneficiary will be the
individual making the election.
Moreover, the plan will have specified
a default method of payment to the
beneficiary in the absence of an election
(so that the beneficiaries will not be
required to make an election).
Section 1.401(a)(9)–4(e)(7) requires a
beneficiary to provide documentation to
a plan administrator showing that the
beneficiary was disabled or chronically
ill as of the date of the employee’s
death. Typically, this requirement will
be satisfied by having a licensed health
care practitioner certify that the
beneficiary was disabled or chronically
ill in a statement that is provided to the
plan administrator.
Section 1.401(a)(9)–4(h) permits an
employee who wants to name a trust as
a beneficiary to treat the underlying
beneficiaries of the trust as designated
beneficiaries of the employee’s benefit
under a retirement plan if the employee
(or the trustee of the trust) either: (1)

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provides a copy of the trust instrument
to the plan administrator or (2) provides
a list of all the beneficiaries of the trust,
certifies that, to the best of the
employee’s (or trustee’s) knowledge,
this list is correct and complete, and
agrees to provide a copy of the trust
instrument upon demand. If the trust
instrument is amended at any time in
the future, the employee (or trustee)
must, within a reasonable time, provide
a copy of each such amendment, or
provide corrected certifications to the
extent that the amendment changes the
information previously certified. This
requirement must generally be satisfied
no later than October 31 of the calendar
year following the calendar year of the
employee’s death.
The collections of information
contained in this notice of final
rulemaking have been submitted to the
Office of Management and Budget for
review in accordance with the
Paperwork Reduction Act. The Treasury
Department and the IRS solicited public
comments during the proposed
rulemaking at 87 FR 10504 on February
24, 2022. During the public comment
period, the Treasury Department and
the IRS did not receive any comments
on the collections of information.
Several commenters requested that plan
administrators be permitted to rely on
self-certifications from a designated
beneficiary (or, in the case of a seethrough trust, the trustee of that trust)
that the beneficiary is disabled or
chronically ill within the meaning of
§ 1.401(a)(9)–4(d). These final
regulations do not adopt that rule for the
reasons described in section I.D.1.c of
the Summary of Comments and
Explanation of Revisions. Commenters
also requested that final regulations
allow for a certification from the trustee
of the trust as to the beneficiaries who
are to be treated as beneficiaries of the
employee for purposes of section
401(a)(9). These final regulations do not
adopt that rule for the reasons described
in section I.D.2.b of the Summary of
Comments and Explanation of
Revisions.
III. Regulatory Flexibility Act
Pursuant to the Regulatory Flexibility
Act (5 U.S.C. chapter 6), it is hereby
certified that the regulations will not
have a significant economic impact on
a substantial number of small entities.
These regulations affect certain plan
administrators and participants, owners
of individual retirement accounts and
annuities; employees for whom amounts
are contributed to section 403(b)
annuity contracts, custodial accounts, or
retirement income accounts; and
beneficiaries of those plans, contracts,

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accounts, and annuities. Because of the
broad scope of the regulations, the rule
may affect a substantial number of small
entities. However, even if a substantial
number of small entities are affected,
the economic impact of these
regulations will not be significant.
These final regulations primarily update
the existing regulations to implement
the statutory changes made since the
issuance of the prior regulations, while
clarifying certain technical issues that
have arisen in applying those prior
regulations. These regulations do not
impose new compliance burdens and
are not expected to result in
economically meaningful changes in
behavior relative to the 2002 or 2004
final regulations. The election described
in § 1.401(a)(9)–3(b)(4)(iii) and (c)(5)(iii)
is expected to be an unusual occurrence
for small entities because few
individuals with benefits in retirement
plans maintained by small entities are
likely to make these elections. In the
case of § 1.401(a)(9)–4(e)(7), when
determining whether a designated
beneficiary is disabled or chronically ill,
the reporting burden is primarily on the
designated beneficiary rather than the
plan sponsor. In the case of
§ 1.401(a)(9)–4(h), when determining
required minimum distributions in
cases in which a plan participant wishes
to designate a trust as beneficiary of the
participant’s benefit, the reporting
burden is primarily on the plan
participant (or the trustee of the trust
named as beneficiary) to supply
information rather than on the entity
maintaining the retirement plan. In
addition, the number of participants per
plan to whom the burden applies is
likely to be small. In § 1.403(b)–
3(e)(6)(ii), the recordkeeping burden
with respect to section 403(b) contracts
under which the pre-1987 account
balance must be maintained only
applies to issuers and custodians of
those contracts, which generally are not
small entities.
Pursuant to section 7805(f) of the
Code, the proposed regulations
preceding these regulations were
submitted to the Chief Counsel for
Advocacy of the Small Business
Administration (Office of Advocacy) for
comment on their impact on small
business. The Office of Advocacy
commented on the proposed
regulations 20 and recommended that
20 The

comment included a recommendation to
eliminate the requirement for annual distribution in
certain circumstances as described in section I.E.3.a

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the IRS publish for public comment
either a supplemental regulatory
flexibility act assessment with a valid
factual basis in support of a certification
or an initial regulatory flexibility
analysis. The Office of Advocacy argued
that the certification in the proposed
regulations did not adequately address
the economic impact of the proposed
regulations on financial planners for the
costs to learn those rules, update
distribution plans, and advise clients.
The Treasury Department and the IRS
disagree because the certification is
based on the direct economic impact of
the proposed regulations on the
regulated community rather than their
advisors. Any economic impact on a
financial planner is not a direct impact.
The regulations do not address the
conduct of, or requirements related to,
financial planners.
IV. Unfunded Mandates Reform Act
Section 202 of the Unfunded
Mandates Reform Act of 1995 requires
that agencies assess anticipated costs
and benefits and take certain other
actions before issuing a final rule that
includes any Federal mandate that may
result in expenditures in any one year
by a State, local, or Tribal government,
in the aggregate, or by the private sector,
of $100 million in 1995 dollars, updated
annually for inflation. The regulations
do not include any Federal mandate that
may result in expenditures by State,
local, or Tribal governments, or by the
private sector in excess of that
threshold.
V. Executive Order 13132: Federalism
Executive Order 13132 (Federalism)
prohibits an agency from publishing any
rule that has federalism implications if
the rule either imposes substantial,
direct compliance costs on State and
local governments, and is not required
by statute, or preempts State law, unless
the agency meets the consultation and
funding requirements of section 6 of the
Executive order. The regulations would
not have federalism implications,
impose substantial direct compliance
costs on State and local governments, or
preempt State law within the meaning
of the Executive order.

the OMB has determined that this
Treasury decision is a major rule for
purposes of the Congressional Review
Act (5 U.S.C. 801 et seq.) (‘‘CRA’’).
Statement of Availability of IRS
Documents
IRS Revenue Procedures, Revenue
Rulings notices, and other guidance
cited in this document are published in
the Internal Revenue Bulletin (or
Cumulative Bulletin) and are available
from the Superintendent of Documents,
U.S. Government Publishing Office,
Washington, DC 20402, or by visiting
the IRS website at http://www.irs.gov.
Drafting Information
The principal authors of these
regulations are Brandon M. Ford and
Linda S.F. Marshall, of the Office of the
Associate Chief Counsel (Employee
Benefits, Exempt Organizations, and
Employment Taxes). However, other
personnel from the Treasury
Department and the IRS participated in
the development of the regulations.
List of Subjects
26 CFR Part 1
Income taxes, Reporting and
recordkeeping requirements.
26 CFR Part 31
Employment taxes, Fishing vessels,
Gambling, Income taxes, Penalties,
Pensions, Railroad retirement, Reporting
and recordkeeping requirements, Social
security, Unemployment compensation.
26 CFR Part 54
Excise taxes, Health care, Pensions,
Reporting and recordkeeping
requirements.
Adoption of Amendments to the
Regulations
Accordingly, the Treasury Department
and the IRS amend 26 CFR parts 1, 31,
and 54 as follows:
PART 1—INCOME TAX
Paragraph 1. The authority citation
for part 1 continues to read in part as
follows:

■

VI. Congressional Review Act

Authority: 26 U.S.C. 7805 * * *

The Administrator of the Office of
Information and Regulatory Affairs of
of the Summary of Comments and Explanation of
Revisions portion of this preamble. For the reasons
described in that section, these regulations retain
that rule.

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Par. 2. For each section set forth
below, revise the section by removing
the text that appears in the column
labeled ‘‘Remove’’ and replacing it with
the text that appears in the column
labeled ‘‘Insert’’:

■

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Regulation section

Remove

§ 1.72(p)–1, Q&A–12 ..........................................
§ 1.72(p)–1, Q&A–13(a)(2) .................................
§ 1.72(p)–1, Q&A–13(b) .....................................
§ 1.401(a)(31)–1, Q&A–1(a) ...............................

§ 1.401(a)(31)–1, Q&A–14(b)(1) .........................
§ 1.401(a)(31)–1, Q&A–14(b)(1) .........................
§ 1.401(a)(31)–1, Q&A–14(b)(2) .........................
§ 1.401(a)(31)–1, Q&A–16 .................................
§ 1.401(a)(31)–1, Q&A–17 .................................
§ 1.401(a)(31)–1, Q&A–17 .................................
§ 1.401(a)(31)–1, Q&A–18(a) .............................
§ 1.401(k)–2(b)(2)(vi) ..........................................
§ 1.401(k)–2(b)(2)(vii)(C) ....................................

‘‘§ 1.402(c)–2, Q&A–4(d)’’ ................................
‘‘§ 1.402(c)–2, Q&A–9(b)’’ ................................
‘‘§ 1.402(c)–2, Q&A–9(c), Example 6’’ .............
‘‘§ 1.402(c)–2, Q&A–3 through Q&A–10 and
Q&A–14’’.
‘‘§ 1.402(c)–2, Q&A–2’’ ....................................
‘‘§ 1.402(c)–2, Q&A–3 through Q&A–10 and
Q&A–14’’.
‘‘§ 1.402–2(c)–2, Q&A–1’’ ................................
‘‘§ 1.402(c)–2, Q&A–9’’ ....................................
‘‘§ 1.402(c)–2, Q&A–1’’ ....................................
‘‘§ 1.402(c)–2(b), Q&A–9’’ ................................
‘‘§ 1.402(c)–2), Q&A–10’’ .................................
‘‘Section 1.402(c)–2, Q&A–10’’ ........................
‘‘§ 1.402(c)–2, Q&A–15’’ ..................................
‘‘§ 1.402(c)–2, A–4’’ ..........................................
‘‘§ 1.401(a)(9)–5, A–9(b)’’ .................................

§ 1.401(k)–4(e)(1) ...............................................
§ 1.401(m)–2(b)(2)(vi)(A) ....................................
§ 1.401(m)–2(b)(3)(iii) .........................................

‘‘§ 1.402(c)–2, Q&A–1(a)’’ ................................
‘‘§ 1.402(c)–2, A–4’’ ..........................................
‘‘§ 1.401(a)(9)–5, A–9(b)’’ .................................

§ 1.402(a)–1(a)(2) ...............................................
§ 1.402A–1, Q&A–11 ..........................................
§ 1.402A–1, Q&A–14 ..........................................
§ 1.408A–4, Q&A 14(b)(3) ..................................
§ 1.408A–4, Q&A 14(b)(3)(iii) .............................
§ 1.408A–6, Q&A–14(d) .....................................
§ 1.408A–6, Q&A–14(d) .....................................
§ 1.408A–6, Q&A–14(d) .....................................
§ 1.409A–2(b)(2)(ii)(B)(5) ....................................
§ 1.411(b)(5)–1(d)(4)(iii) ......................................
§ 1.411(b)(5)–1(d)(4)(iii) ......................................
§ 1.6047–2(a)(1) .................................................
§ 1.6047–2(b)(1) .................................................

‘‘1.401(a)(9)–6, Q&A–4’’ ..................................
‘‘A–4 of § 1.402(c)–2’’ ......................................
‘‘§ 1.402(c)–2, A–10(a)’’ ...................................
‘‘§ 1.401(a)(9)–6, Q&A–12’’ ..............................
‘‘§ 1.401(a)(9)–6, Q&A–12(c)(1) and (c)(2)’’ ....
‘‘A–3 of § 1.401(a)(9)–5’’ ..................................
‘‘A–12 of § 1.408–8’’ .........................................
‘‘A–17 of § 1.401(a)(9)–6’’ ................................
‘‘§ 1.401(a)(9)–6, Q&A–14(a)(1) or (2)’’ ...........
‘‘§ 1.401(a)(9)–6, A–14(b)’’ ...............................
‘‘§ 1.401(a)(9)–6, A–14(b)(2)’’ ..........................
‘‘A–17 of § 1.401(a)(9)–6’’ ................................
‘‘A–17(d)(2)(ii) of § 1.401(a)(9)–6’’ ...................

§ 1.401(a)(31)–1, Q&A–1(a) ...............................
§ 1.401(a)(31)–1, Q&A–1(a) ...............................

Par. 3. Revise and republish
§§ 1.401(a)(9)–0 through 1.401(a)(9)–8 to
read as follows:

■

§ 1.401(a)(9)–0 Required minimum
distributions; table of contents.

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This table of contents lists the
regulations relating to required
minimum distributions under section
401(a)(9) of the Internal Revenue Code
as follows:
§ 1.401(a)(9)–1 Minimum distribution
requirement in general.
(a) Plans subject to minimum distribution
requirement.
(1) In general.
(2) Participant in multiple plans.
(3) Governmental plans.
(b) Statutory effective date.
(1) In general.
(2) Effective date for section 401(a)(9)(H).
(3) Examples.
(c) Required and optional plan provisions.
(1) Required provisions.
(2) Optional provisions.
(d) Regulatory applicability date.
§ 1.401(a)(9)–2 Distributions commencing
during an employee’s lifetime.
(a) Distributions commencing during an
employee’s lifetime.
(1) In general.
(2) Amount required to be distributed for
a calendar year.

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Insert

(3) Distributions commencing before
required beginning date.
(4) Distributions after death.
(b) Determination of required beginning
date.
(1) General rule.
(2) Definition of applicable age.
(3) Required beginning date for 5-percent
owner.
(4) Uniform required beginning date.
(5) Plans maintained by more than one
employer.
§ 1.401(a)(9)–3 Death before required
beginning date.
(a) Distribution requirements.
(1) In general.
(2) Special rule for designated Roth
accounts.
(b) Distribution requirements in the case of
a defined benefit plan.
(1) In general.
(2) 5-year rule.
(3) Annuity payments.
(4) Determination of which rule applies.
(c) Distributions in the case of a defined
contribution plan.
(1) In general.
(2) 5-year rule.
(3) 10-year rule.
(4) Life expectancy payments.
(5) Determination of which rule applies.
(d) Permitted delay for surviving spouse
beneficiaries.
(e) Distributions that commence after
surviving spouse’s death.
(1) In general.

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‘‘§ 1.402(c)–2(c)(3)’’.
‘‘§ 1.402(c)–2(g)(3)(i)’’.
‘‘Example 6 in § 1.402(c)–2(g)(5)(vi)’’.
‘‘§ 1.402(c)–2’’.
‘‘§ 1.402(c)–2(a)(1)(iii)’’.
‘‘§ 1.402(c)–2’’.
‘‘§ 1.402(c)–2(a)’’.
‘‘§ 1.402(c)–2(g)’’.
‘‘§ 1.402(c)–2(a)’’.
‘‘§ 1.402(c)–2(g)’’.
‘‘§ 1.402(c)–2(h))’’.
‘‘Section 1.402(c)–2(h)’’.
‘‘§ 1.402(c)–2(k)(2)’’.
‘‘§ 1.402(c)–2(c)(3)’’.
‘‘§§ 1.401(a)(9)–5(g)(2)(ii) and 1.402(c)–
2(c)(3)’’.
‘‘§ 1.402(c)–2(a)’’.
‘‘§ 1.402(c)–2(c)(3)’’.
‘‘§§ 1.401(a)(9)–5(g)(2)(ii) and 1.402(c)–
2(c)(3)’’.
‘‘1.401(a)(9)–6(d)’’.
‘‘§ 1.402(c)–2(c)(3)’’.
‘‘§ 1.402(c)–2(h)’’.
‘‘§ 1.401(a)(9)–6(m)(2)’’.
‘‘§ 1.401(a)(9)–6(m)(3)’’.
‘‘§ 1.401(a)(9)–5(b)(4)’’.
‘‘§ 1.408–8(h)’’.
‘‘§ 1.401(a)(9)–6(q)’’.
‘‘§ 1.401(a)(9)–6(o)(1)(i) or (ii)’’.
‘‘§ 1.401(a)(9)–6(o)(2)’’.
‘‘§ 1.401(a)(9)–6(o)(2)(ii)’’.
‘‘§ 1.401(a)(9)–6(q)’’.
‘‘§ 1.401(a)(9)–6(q)(4)(ii)(B)’’.

(2) Remarriage of surviving spouse.
(3) When distributions are treated as
having begun to surviving spouse.
§ 1.401(a)(9)–4 Determination of the
designated beneficiary.
(a) Beneficiary designated under the plan.
(1) In general.
(2) Entitlement to employee’s interest in
the plan.
(3) Specificity of beneficiary designation.
(4) Affirmative and default elections of
designated beneficiary.
(b) Designated beneficiary must be an
individual.
(c) Rules for determining beneficiaries.
(1) Time period for determining the
beneficiary.
(2) Circumstances under which a
beneficiary is disregarded as a beneficiary of
the employee.
(3) Examples.
(d) Application of beneficiary designation
rules to surviving spouse.
(e) Eligible designated beneficiaries.
(1) In general.
(2) Multiple designated beneficiaries.
(3) Determination of age of majority.
(4) Disabled individual.
(5) Chronically ill individual.
(6) Individual not more than 10 years
younger than the employee.
(7) Documentation requirements for
disabled or chronically ill individuals.
(8) Applicability of definition of eligible
designated beneficiary to beneficiary of
surviving spouse.

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(9) Examples.
(f) Special rules for trusts.
(1) Look-through of trust to determine
designated beneficiaries.
(2) Trust requirements.
(3) Trust beneficiaries treated as
beneficiaries of the employee.
(4) Multiple trust arrangements.
(5) Identifiability of trust beneficiaries.
(6) Examples.
(g) Applicable multi-beneficiary trust.
(1) Certain see-through trusts with disabled
or chronically ill beneficiaries.
(2) Termination of interest in trust.
(3) Special definition of designated
beneficiary.
(h) Documentation requirements for trusts.
(1) General rule.
(2) Required minimum distributions while
employee is still alive.
(3) Required minimum distributions after
death.
(4) Relief for discrepancy between trust
instrument and employee certifications or
earlier trust instruments.
§ 1.401(a)(9)–5 Required minimum
distributions from defined contribution
plans.
(a) General rules.
(1) In general.
(2) Distribution calendar year.
(3) Time for distributions.
(4) Minimum distribution incidental
benefit requirement.
(5) Annuity contracts.
(6) Impact of additional distributions in
prior years.
(b) Determination of account balance.
(1) General rule.
(2) Adjustment for subsequent allocations
and distributions.
(3) Adjustment for designated Roth
accounts.
(4) Exclusion for QLAC.
(5) Treatment of rollovers.
(c) Determination of applicable
denominator during employee’s lifetime.
(1) General rule.
(2) Spouse is sole beneficiary.
(d) Applicable denominator after
employee’s death.
(1) Death on or after the employee’s
required beginning date.
(2) Death before an employee’s required
beginning date.
(3) Remaining life expectancy.
(e) Distribution of employee’s entire
interest required.
(1) In general.
(2) 10-year limit for designated beneficiary
who is not an eligible designated beneficiary.
(3) 10-year limit following death of eligible
designated beneficiary.
(4) 10-year limit after minor child of the
employee reaches age of majority.
(f) Rules for multiple designated
beneficiaries.
(1) Determination of applicable
denominator.
(2) Determination of when entire interest is
required to be distributed.
(g) Special rules.
(1) Treatment of nonvested amounts.
(2) Distributions taken into account.
(3) Surviving spouse election under section
401(a)(9)(B)(iv).

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§ 1.401(a)(9)–6 Required minimum
distributions for defined benefit plans
and annuity contracts.
(a) General rules.
(1) In general.
(2) Definition of life annuity.
(3) Annuity commencement.
(4) Single-sum distributions.
(5) Death benefits.
(6) Separate treatment of separate
identifiable components.
(7) Additional guidance.
(b) Application of incidental benefit
requirement.
(1) Life annuity for employee.
(2) Joint and survivor annuity.
(3) Period certain and annuity features.
(4) Deemed satisfaction of incidental
benefit rule.
(c) Period certain annuity.
(1) Distributions commencing during the
employee’s life.
(2) Distributions commencing after the
employee’s death.
(d) Use of annuity contract.
(1) In general.
(2) Applicability of section 401(a)(9)(H).
(e) Treatment of additional accruals.
(1) General rule.
(2) Administrative delay.
(f) Treatment of nonvested benefits.
(g) Requirement for actuarial increase.
(1) General rule.
(2) Nonapplication to 5-percent owners.
(3) Nonapplication to governmental plans.
(4) Nonapplication to church plans and
church employees.
(h) Amount of actuarial increase.
(1) In general.
(2) Actuarial equivalence basis.
(3) Coordination with section 411 actuarial
increase.
(i) [Reserved]
(j) Distributions restricted pursuant to
section 436.
(1) General rule.
(2) Payments restricted under section
436(d)(3).
(3) Payments restricted under section
436(d)(1) or (2).
(k) Treatment of early commencement.
(1) General rule.
(2) Joint and survivor annuity, non-spouse
beneficiary.
(3) Limitation on period certain.
(l) Early commencement for surviving
spouse.
(m) Determination of entire interest under
annuity contract.
(1) General rule.
(2) Entire interest.
(3) Exclusions.
(4) Examples.
(n) Change in annuity payment period.
(1) In general.
(2) Reannuitization.
(3) Conditions.
(4) Examples.
(o) Increase in annuity payments.
(1) General rules.
(2) Eligible cost of living index.
(3) Additional permitted increases for
annuity contracts purchased from insurance
companies.
(4) Additional permitted increases for
annuity payments from a qualified trust.

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(5) Actuarial gain defined.
(6) Examples.
(p) Payments to children.
(1) In general.
(2) Age of majority.
(q) Qualifying longevity annuity contract.
(1) Definition of qualifying longevity
annuity contract.
(2) Limitation on premiums.
(3) Payments after death of the employee.
(4) Rules of application.
§ 1.401(a)(9)–7 Rollovers and transfers.
(a) Treatment of rollover from distributing
plan.
(b) Treatment of rollover by receiving plan.
(c) Treatment of transfer under transferor
plan.
(1) Generally not treated as distribution.
(2) Account balance decreased after
transfer.
(d) Treatment of transfer under transferee
plan.
(e) Treatment of spinoff or merger.
§ 1.401(a)(9)–8 Special rules.
(a) Use of separate accounts.
(1) Separate application of section 401(a)(9)
for each beneficiary.
(2) Separate accounting requirements.
(b) Application of consent requirements.
(c) Definition of spouse.
(d) Treatment of QDROs.
(1) Continued treatment of spouse.
(2) Separate accounts.
(3) Other situations.
(e) Application of section 401(a)(9)
pending determination of whether a domestic
relations order is a QDRO is being made.
(f) Application of section 401(a)(9) when
insurer is in State delinquency proceedings.
(g) In-service distributions required to
satisfy section 401(a)(9).
(h) TEFRA section 242(b) elections.
(1) In general.
(2) Application of section 242(b) election
after transfer.
(3) Application of section 242(b) election
after rollover.
(4) Revocation of section 242(b) election.
§ 1.401(a)(9)–9 Life expectancy and
Uniform Lifetime tables.
(a) In general.
(b) Single Life Table.
(c) Uniform Lifetime Table.
(d) Joint and Last Survivor Table.
(e) Mortality rates.
(f) Applicability dates.
(1) In general.
(2) Application to life expectancies that
may not be recalculated.
§ 1.401(a)(9)–1 Minimum distribution
requirement in general.

(a) Plans subject to minimum
distribution requirement—(1) In general.
Under section 401(a)(9), all stock bonus,
pension, and profit-sharing plans
qualified under section 401(a) and
annuity contracts described in section
403(a) are subject to required minimum
distribution rules. See this section and
§§ 1.401(a)(9)–2 through 1.401(a)(9)–9
for the distribution rules applicable to
these plans. Under section 403(b)(10),
annuity contracts and custodial

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accounts described in section 403(b) are
subject to required minimum
distribution rules. See § 1.403(b)–6(e)
for the distribution rules applicable to
these annuity contracts and custodial
accounts. Under section 408(a)(6) and
408(b)(3), individual retirement
accounts and individual retirements
annuities (collectively, IRAs) are subject
to required minimum distribution rules.
See § 1.408–8 for the minimum
distribution rules applicable to IRAs
and § 1.408A–6 for the minimum
distribution rules applicable to Roth
IRAs under section 408A. Under section
457(d)(2), eligible deferred
compensation plans described in
section 457(b) for employees of taxexempt organizations or employees of
State and local governments are subject
to required minimum distribution rules.
See § 1.457–6(d) for the minimum
distribution rules applicable to those
eligible deferred compensation plans.
(2) Participant in multiple plans. If an
employee is a participant in more than
one plan, the plans in which the
employee participates are not permitted
to be aggregated for purposes of testing
whether the distribution requirements
of section 401(a)(9) are met. Thus, the
distribution of the benefit of the
employee under each plan must
separately meet the requirements of
section 401(a)(9). For this purpose, a
plan described in section 414(k) is
treated as two separate plans, a defined
contribution plan to the extent benefits
are based on an individual account and
a defined benefit plan with respect to
the remaining benefits.
(3) Governmental plans. A
governmental plan (within the meaning
of section 414(d)), or an eligible
governmental plan described in § 1.457–
2(f), is treated as having complied with
section 401(a)(9) if the plan complies
with a reasonable, good faith
interpretation of section 401(a)(9). Thus,
the terms of a governmental plan that
reflect a reasonable, good faith
interpretation of section 401(a)(9) do not
have to provide that distributions will
be made in accordance with this section
and §§ 1.401(a)(9)–2 through
1.401(a)(9)–9. Similarly, a governmental
plan may apply the rules of section
401(a)(9)(F) using the rules of
§ 1.401(a)(9)–6, Q&A–15 (as it appeared
in the April 1, 2023, edition of 26 CFR
part 1).
(b) Statutory effective date—(1) In
general. The distribution rules of
section 401(a)(9) generally apply to all
account balances and benefits in
existence on or after January 1, 1985.
(2) Effective date for section
401(a)(9)(H)—(i) General effective date.
Except as otherwise provided in this

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paragraph (b)(2), section 401(a)(9)(H)
applies with respect to employees who
die on or after January 1, 2020.
However, in the case of a governmental
plan (as defined in section 414(d)),
section 401(a)(9)(H) applies with respect
to employees who die on or after
January 1, 2022.
(ii) Delayed effective date for
collectively bargained plans—(A)
General rule. In the case of a plan
maintained pursuant to one or more
collective bargaining agreements
between employee representatives and
one or more employers ratified before
December 20, 2019 (the date of
enactment of the Further Consolidated
Appropriations Act, 2020, Public Law
116–94, 133 Stat. 2534 (2019)), section
401(a)(9)(H) generally applies with
respect to employees who die on or after
January 1, 2022.
(B) Earlier effective date if agreements
terminate. Notwithstanding paragraph
(b)(2)(ii)(A) of this section, section
401(a)(9)(H) applies to a plan
maintained pursuant to one or more
collective bargaining agreements with
respect to employees who die in 2020 or
2021 if—
(1) The year in which the employee
dies begins after the date on which the
last of the collective bargaining
agreements described in paragraph
(b)(2)(ii)(A) of this section terminates
(determined without regard to any
extension thereof to which the parties
agreed on or after December 20, 2019),
and
(2) Section 401(a)(9)(H) would apply
with respect to the employee under the
rules of paragraph (b)(2)(i) of this
section.
(C) Rules of application. For purposes
of this paragraph (b)(2)(ii)—
(1) A plan is treated as maintained
pursuant to one or more collective
bargaining agreements only if the plan
constitutes a collectively bargained plan
under the rules of § 1.436–1(a)(5)(ii)(B),
and
(2) Any plan amendment made
pursuant to a collective bargaining
agreement that amends the plan solely
to conform to the requirements of
section 401(a)(9)(H) is not treated as a
termination of the collective bargaining
agreement.
(iii) Applicability upon death of
designated beneficiary—(A) In general.
Except as otherwise provided in this
paragraph (b)(2)(iii), if an employee who
died before the effective date described
in paragraph (b)(2)(i) or (ii) of this
section (whichever applies to the plan)
has only one designated beneficiary and
that beneficiary dies on or after that
effective date, then, upon the death of
the designated beneficiary, section

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58909

401(a)(9)(H) applies with respect to any
beneficiary of the employee’s designated
beneficiary. Section 401(b)(5) of
Division O of the Further Consolidated
Appropriations Act, 2020 (known as the
SECURE Act) provides that, if an
employee dies before the effective date,
then a designated beneficiary of an
employee is treated as an eligible
designated beneficiary. Accordingly,
once the rules of section 401(a)(9)(H)
apply with respect to the employee’s
designated beneficiary, the rules of
section 401(a)(9)(H)(iii) (requiring full
distribution of the employee’s interest
within 10 years after the death of an
eligible designated beneficiary) apply
upon the designated beneficiary’s death.
(B) Employee with multiple
designated beneficiaries. If an employee
described in paragraph (b)(2)(iii)(A) of
this section has more than one
designated beneficiary, then whether
section 401(a)(9)(H) applies is
determined based on the date of death
of the oldest of the employee’s
designated beneficiaries. Thus, section
401(a)(9)(H) will apply upon the death
of the oldest of the employee’s
designated beneficiaries if that
designated beneficiary is still alive on or
after the effective date of section
401(a)(9)(H) for the plan as determined
under the rules of paragraph (b)(2)(i) or
(ii) of this section. However, see
§ 1.401(a)(9)–8(a) for rules related to the
separate application of section 401(a)(9)
with respect to multiple beneficiaries if
certain requirements are met.
(C) Surviving spouse of the employee
dies before employee’s required
beginning date. If an employee
described in paragraph (b)(2)(iii)(A) of
this section dies before the employee’s
required beginning date and the
employee’s surviving spouse is waiting
to begin distributions until the year for
which the employee would have been
required to begin distributions pursuant
to section 401(a)(9)(B)(iv)(II), then, in
applying the rules of this paragraph
(b)(2)(iii), the surviving spouse is treated
as the employee. Thus, for example, if
an employee with a required beginning
date of April 1, 2025, names the
employee’s surviving spouse as the sole
beneficiary of the employee’s interest in
the plan, both the employee and the
employee’s surviving spouse die before
the effective date of section 401(a)(9)(H)
for the plan, and that spouse’s
designated beneficiary dies on or after
that effective date, then section
401(a)(9)(H) applies with respect to the
surviving spouse’s designated
beneficiary upon the death of that
designated beneficiary (so that full
distribution of the employee’s interest
must be made no later than the end of

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the calendar year that includes the tenth
anniversary of the date of that
designated beneficiary’s death).
(iv) Qualified annuity exception—(A)
In general. Section 401(a)(9)(H) does not
apply to a commercial annuity (as
defined in section 3405(e)(6))—
(1) That is a binding annuity contract
in effect as of December 20, 2019;
(2) Under which payments satisfy the
requirements of §§ 1.401(a)(9)–1 through
1.401(a)(9)–9 (as those sections
appeared in the April 1, 2019, edition of
26 CFR part 1); and
(3) That satisfies the irrevocability
requirements of paragraph (b)(2)(iv)(B)
of this section.
(B) Irrevocability requirements
applicable to annuity contract. A
contract satisfies the requirements of
this paragraph (b)(2)(iv)(B) if the
employee (or, if the employee has died,
the designated beneficiary) has made an
irrevocable election before December 20,
2019, as to the method and amount of
annuity payments to the employee and
any designated beneficiary.
(3) Examples. The following examples
illustrate the applicability date rules of
this paragraph (b).
(i) Example 1. Employer M maintains
a defined contribution plan, Plan X.
Employee A died in 2017, at the age of
68, and designated A’s 40-year-old
child, B, who was not disabled or
chronically ill at the time of A’s death,
as the sole beneficiary of A’s interest in
Plan X. Pursuant to a plan provision in
Plan X, B elected to take distributions
over B’s life expectancy under section
401(a)(9)(B)(iii). B dies in 2024, after the
effective date of section 401(a)(9)(H).
Because section 401(b)(5) of the
SECURE Act treats B as an eligible
designated beneficiary, the rules of
section 401(a)(9)(H)(iii) apply to B’s
beneficiaries. Therefore, A’s remaining
interest in Plan X must be distributed by
the end of 2034 (the calendar year that
includes the tenth anniversary of B’s
death).
(ii) Example 2. The facts are the same
as in paragraph (b)(3)(i) of this section
(Example 1), except that B died in 2019.
Because A’s designated beneficiary died
before the effective date of section 401
of the SECURE Act, the rules of section
401(a)(9)(H) do not apply to B’s
beneficiaries.
(iii) Example 3. The facts are the same
as in paragraph (b)(3)(i) of this section
(Example 1) except that, pursuant to a
provision in Plan X, B elected the 5-year
rule under section 401(a)(9)(B)(ii).
Accordingly, A’s entire interest is
required to be distributed by the end of
2022. Because A died before January 1,
2020, section 401(a)(9)(H) does not
apply with respect to B. Therefore,

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section 401(a)(9)(H)(i)(I) does not extend
the 5-year period under B’s election to
a 10-year period. Although B’s election
required A’s entire interest to be
distributed by the end of 2022, the
enactment of section 401(a)(9)(I)(iii)(II)
(permitting disregard of 2020 when the
5-year period applies) permits
distribution of A’s entire interest in the
plan to be delayed until the end of 2023.
(iv) Example 4. The facts are the same
as in paragraph (b)(3)(i) of this section
(Example 1), except that A designates a
see-through trust that satisfies the
requirements of § 1.401(a)(9)–4(f)(2) as
the sole beneficiary of A’s interest in
Plan X. All of the trust beneficiaries are
alive as of January 1, 2020. The oldest
of the trust beneficiaries, C, died in
2022. Because section 401(b)(5) of the
SECURE Act treats C as an eligible
designated beneficiary, the rules of
section 401(a)(9)(H)(iii) apply to the
other trust beneficiaries. Thus, unless
the rules of § 1.401(a)(9)–5(f)(2)(ii)(B) or
(iii) apply, A’s remaining interest in
Plan X must be distributed by the end
of 2032 (the calendar year that includes
the tenth anniversary of C’s death).
(v) Example 5. The facts are the same
as in paragraph (b)(3)(iv) of this section
(Example 4), except that C died in 2019.
Because the oldest designated
beneficiary died before January 1, 2020,
the rules of section 401(a)(9)(H) do not
apply to any of the other trust
beneficiaries.
(vi) Example 6. The facts are the same
as in paragraph (b)(3)(i) of this section
(Example 1), except that B elected to
purchase an annuity that pays over B’s
lifetime with a 15-year certain period
starting in the calendar year following
the calendar year of A’s death. Because
B died after the effective date of section
401(a)(9)(H), the rules of section
401(a)(9)(H)(iii) apply, and accordingly,
the annuity may not provide
distributions any later than the end of
2034.
(c) Required and optional plan
provisions—(1) Required provisions. In
order to satisfy section 401(a)(9), a plan
must include the provisions described
in this paragraph (c)(1) reflecting section
401(a)(9). First, a plan generally must
set forth the statutory rules of section
401(a)(9), including the incidental death
benefit requirement in section
401(a)(9)(G). Second, a plan must
provide that distributions will be made
in accordance with this section and
§§ 1.401(a)(9)–2 through 1.401(a)(9)–9.
A plan document also must provide that
the provisions reflecting section
401(a)(9) override any distribution
options in the plan that are inconsistent
with section 401(a)(9). A plan also must
include any other provisions reflecting

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section 401(a)(9) that are prescribed by
the Commissioner in revenue rulings,
notices, and other guidance published
in the Internal Revenue Bulletin. See
§ 601.601(d) of this chapter.
(2) Optional provisions. A plan may
also include optional provisions
governing plan distributions that do not
conflict with section 401(a)(9). For
example, a defined benefit plan may
include a provision described in
§ 1.401(a)(9)–3(b)(4)(ii) (requiring that
the 5-year rule apply to an employee
who has a designated beneficiary).
Similarly, a defined contribution plan
may provide for an election by an
eligible designated beneficiary as
described in § 1.401(a)(9)–3(c)(5)(iii).
(d) Regulatory applicability date. This
section and §§ 1.401(a)(9)–2 through
1.401(a)(9)–9 apply for purposes of
determining required minimum
distributions for calendar years
beginning on or after January 1, 2025.
For earlier calendar years, the rules of
§§ 1.401(a)(9)–1 through 1.401(a)(9)–9
(as those sections appeared in the April
1, 2023, edition of 26 CFR part 1) apply.
§ 1.401(a)(9)–2 Distributions commencing
during an employee’s lifetime.

(a) Distributions commencing during
an employee’s lifetime—(1) In general.
In order to satisfy section 401(a)(9)(A),
the entire interest of each employee
must be distributed to the employee not
later than the required beginning date,
or must be distributed, beginning not
later than the required beginning date,
over the life of the employee or the joint
lives of the employee and a designated
beneficiary or over a period not
extending beyond the life expectancy of
the employee or the joint life and last
survivor expectancy of the employee
and the designated beneficiary. Under
section 401(a)(9)(G), lifetime
distributions must satisfy the incidental
death benefit requirements of § 1.401–
1(b)(1).
(2) Amount required to be distributed
for a calendar year. The amount
required to be distributed for each
calendar year in order to satisfy section
401(a)(9)(A) and (G) generally depends
on whether the amount to be distributed
is from an individual account under a
defined contribution plan, is an annuity
payment from a defined benefit plan, or
is a payment under an annuity contract.
For the method of determining the
required minimum distribution in
accordance with section 401(a)(9)(A)
and (G) from an individual account
under a defined contribution plan, see
§ 1.401(a)(9)–5. For the method of
determining the required minimum
distribution in accordance with section
401(a)(9)(A) and (G) in the case of

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annuity payments from a defined
benefit plan or under an annuity
contract (including an annuity contract
purchased under a defined contribution
plan), see § 1.401(a)(9)–6.
(3) Distributions commencing before
required beginning date—(i) In general.
Lifetime distributions made before the
employee’s required beginning date for
calendar years before the employee’s
first distribution calendar year, as
defined in § 1.401(a)(9)–5(a)(2)(ii), need
not be made in accordance with section
401(a)(9). However, if distributions
commence before the employee’s
required beginning date under a
particular distribution option (such as
in the form of an annuity) and, under
the terms of that distribution option,
distributions to be made for the
employee’s first distribution calendar
year (or any subsequent calendar year)
will fail to satisfy section 401(a)(9), then
the distribution option fails to satisfy
section 401(a)(9) at the time
distributions commence.
(ii) Date distributions are treated as
having begun. Except as otherwise
provided in paragraph (a)(3)(iii) of this
section and § 1.401(a)(9)–6(k),
distributions to the employee are not
treated as having begun in accordance
with section 401(a)(9)(A)(ii) until the
employee’s required beginning date, as
determined in accordance with
paragraph (b)(1) or (3) of this section,
whichever applies to the employee. The
preceding sentence applies even if the
employee has received distributions
before the employee’s required
beginning date (either pursuant to plan
terms that require distributions to begin
by an earlier date or pursuant to the
employee’s election). Thus, even if
payments have been made before the
employee’s required beginning date, the
rules of § 1.401(a)(9)–3 will apply if the
employee dies before that date. For
example, if A is an employee who
retires in 2023, the calendar year A
attains age 71, and begins receiving
installment distributions from a profitsharing plan over a period not
exceeding the joint life and last survivor
expectancy of A and A’s spouse,
benefits are not treated as having begun
in accordance with section
401(a)(9)(A)(ii) until April 1, 2026 (the
April 1 following the calendar year in
which A attains age 73). Consequently,
if A dies before April 1, 2026 (A’s
required beginning date), distributions
after A’s death must be made in
accordance with § 1.401(a)(9)–3
(addressing payments to beneficiaries
pursuant to section 401(a)(9)(B)(ii), (iii),
or (iv), whichever applies, in cases in
which required distributions have not
begun) rather than section 401(a)(9)(B)(i)

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(addressing payments to beneficiaries in
cases in which required distributions
have begun). This is the case without
regard to whether, before A’s death, the
plan distributed the minimum
distribution for the A’s first distribution
calendar year (as defined in
§ 1.401(a)(9)–5(a)(2)(ii)).
(iii) Exception for uniform required
beginning date. If a plan provides, in
accordance with paragraph (b)(4) of this
section, that the required beginning date
for purposes of section 401(a)(9) for all
employees is April 1 of the calendar
year following the calendar year
described in paragraph (b)(1)(i) of this
section, without regard to whether the
employee is a 5-percent owner, then an
employee who dies on or after the
required beginning date determined
under the plan terms is treated as dying
after distributions have begun in
accordance with section 401(a)(9)(A)(ii)
(even if the employee dies before the
April 1 following the calendar year in
which the employee retires).
(4) Distributions after death. Section
401(a)(9)(B)(i) provides that, if the
distribution of an employee’s interest
has begun in accordance with section
401(a)(9)(A)(ii), and the employee dies
before the employee’s entire interest has
been distributed to the employee, the
remaining portion of the employee’s
interest must be distributed at least as
rapidly as under the distribution
method being used under section
401(a)(9)(A)(ii) as of the date of the
employee’s death. For the method of
determining the required minimum
distribution in accordance with section
401(a)(9)(B)(i) from an individual
account under a defined contribution
plan, see § 1.401(a)(9)–5. In the case of
annuity payments from a defined
benefit plan or under an annuity
contract (including an annuity contract
purchased under a defined contribution
plan), see § 1.401(a)(9)–6.
(b) Determination of required
beginning date—(1) General rule. Except
as otherwise provided in this paragraph
(b), the employee’s required beginning
date (within the meaning of section
401(a)(9)(C)) is April 1 of the calendar
year following the later of—
(i) The calendar year in which the
employee attains the applicable age; and
(ii) The calendar year in which the
employee retires from employment with
the employer maintaining the plan.
(2) Definition of applicable age—(i) In
general. The applicable age is
determined using the employee’s date of
birth as set forth in this paragraph (b)(2).
(ii) Employees born before July 1,
1949. In the case of an employee born
before July 1, 1949, the applicable age
is age 701⁄2.

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58911

(iii) Other employees born before
1951. In the case of an employee born
on or after July 1, 1949, but before
January 1, 1951, the applicable age is
age 72;
(iv) Employees born in 1951 through
1958. In the case of an employee born
on or after January 1, 1951, but before
January 1, 1959, the applicable age is
age 73;
(v) [Reserved]
(vi) Employees born after 1959. In the
case of an employee born on or after
January 1, 1960, the applicable age is
age 75.
(3) Required beginning date for 5percent owner—(i) In general. In the
case of an employee who is a 5-percent
owner, the employee’s required
beginning date is April 1 of the calendar
year following the calendar year in
which the employee attains the
applicable age.
(ii) Definition of 5-percent owner. For
purposes of section 401(a)(9), a 5percent owner is an employee who is a
5-percent owner (as defined in section
416) with respect to the plan year
ending in the calendar year in which the
employee attains the applicable age.
(iii) No applicability to governmental
plan or church plan. This paragraph
(b)(3) does not apply in the case of a
governmental plan (within the meaning
of section 414(d)) or a church plan
(within the meaning of § 1.401(a)(9)–
6(g)(4)(i)).
(4) Uniform required beginning date.
A plan is permitted to provide that the
required beginning date for purposes of
section 401(a)(9) for all employees is
April 1 of the calendar year following
the calendar year described in
paragraph (b)(1)(i) of this section,
without regard to whether the employee
is a 5-percent owner.
(5) Plans maintained by more than
one employer. In the case of a plan
maintained by more than one employer,
an employee who retires from
employment with any of those
employers but continues to be employed
by another employer that maintains the
plan is not treated as having retired for
purposes of paragraph (b)(1)(ii) of this
section.
§ 1.401(a)(9)–3 Death before required
beginning date.

(a) Distribution requirements—(1) In
general. Except as otherwise provided
in §§ 1.401(a)(9)–2(a)(3) and 1.401(a)(9)–
6(k), if an employee dies before the
employee’s required beginning date
(and thus before distributions are
treated as having begun in accordance
with section 401(a)(9)(A)(ii)), then—
(i) In the case of a defined benefit
plan, distributions are required to be

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made in accordance with paragraph (b)
of this section, and
(ii) In the case of a defined
contribution plan, distributions are
required to be made in accordance with
paragraph (c) of this section.
(2) Special rule for designated Roth
accounts. If an employee’s entire
interest under a defined contribution
plan is in a designated Roth account (as
described in section 402A(b)(2)), then
no distributions are required to be made
to the employee during the employee’s
lifetime. Upon the employee’s death,
that employee is treated as having died
before his or her required beginning
date (so that distributions must be made
in accordance with the requirements of
paragraph (c) of this section).
(b) Distribution requirements in the
case of a defined benefit plan—(1) In
general. Distributions from a defined
benefit plan are made in accordance
with this paragraph (b) if the
distributions satisfy either paragraph
(b)(2) or (3) of this section, whichever
applies with respect to the employee.
The determination of whether paragraph
(b)(2) or (3) of this section applies is
made in accordance with paragraph
(b)(4) of this section.
(2) 5-year rule. Except as otherwise
provided in § 1.401(a)(9)–6(j) (relating to
defined benefit plans subject to
limitations under section 436),
distributions satisfy this paragraph
(b)(2) if the employee’s entire interest is
distributed by the end of the calendar
year that includes the fifth anniversary
of the date of the employee’s death. For
example, if an employee dies on any
day in 2022, then in order to satisfy the
5-year rule in section 401(a)(9)(B)(ii),
the entire interest generally must be
distributed by the end of 2027.
(3) Annuity payments. Distributions
satisfy this paragraph (b)(3) if annuity
payments that satisfy the requirements
of § 1.401(a)(9)–6 commence no later
than the end of the calendar year
following the calendar year in which the
employee died, except as provided in
paragraph (d) of this section (permitting
a surviving spouse to delay the
commencement of distributions).
(4) Determination of which rule
applies—(i) No plan provision. If a
defined benefit plan does not provide
for an optional provision described in
paragraph (b)(4)(ii) or (b)(4)(iii) of this
section specifying the method of
distribution after the death of an
employee, then distributions must be
made as follows—
(A) If the employee has no designated
beneficiary, as determined under
§ 1.401(a)(9)–4, distributions must
satisfy paragraph (b)(2) of this section;
and

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(B) If the employee has a designated
beneficiary, distributions must satisfy
paragraph (b)(3) of this section.
(ii) Optional plan provisions. A
defined benefit plan will not fail to
satisfy section 401(a)(9) merely because
it includes a provision specifying that
the 5-year rule in paragraph (b)(2) of this
section (rather than the annuity
payment rule in paragraph (b)(3) of this
section) will apply with respect to some
or all of the employees who have a
designated beneficiary.
(iii) Elections. A defined benefit plan
will not fail to satisfy section 401(a)(9)
merely because it includes a provision
that applies with respect to some or all
of the employees who have a designated
beneficiary under which the employee
(or designated beneficiary) is permitted
to elect whether the 5-year rule in
paragraph (b)(2) of this section or the
annuity payment rule in paragraph
(b)(3) of this section applies. If a plan
provides for this type of an election,
then—
(A) The plan must specify the method
of distribution that applies if neither the
employee nor the designated beneficiary
makes the election unless that method
is the method specified in paragraph
(b)(4)(i) of this section;
(B) The election must be made no
later than the end of the earlier of the
calendar year by which distributions
must be made in order to satisfy
paragraph (b)(2) of this section and the
calendar year in which distributions
would be required to begin in order to
satisfy the requirements of paragraph
(b)(3) of this section or, if applicable,
paragraph (d) of this section; and
(C) As of the last date the election
may be made, the election must be
irrevocable with respect to the
beneficiary (and all subsequent
beneficiaries) and must apply to all
subsequent calendar years.
(c) Distributions in the case of a
defined contribution plan—(1) In
general. The requirements of this
paragraph (c) are satisfied if
distributions are made in accordance
with paragraph (c)(2), (3), or (4) of this
section, whichever applies with respect
to the employee. The determination of
whether paragraph (c)(2), (3), or (4) of
this section applies is made in
accordance with paragraph (c)(5) of this
section.
(2) 5-year rule. Distributions satisfy
this paragraph (c)(2) if the employee’s
entire interest is distributed by the end
of the calendar year that includes the
fifth anniversary of the date of the
employee’s death. For example, if an
employee dies on any day in 2022, the
entire interest must be distributed by
the end of 2027 in order to satisfy the

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5-year rule in section 401(a)(9)(B)(ii).
For purposes of this paragraph (c)(2), if
an employee died before January 1,
2020, then the 2020 calendar year is
disregarded when determining the
calendar year that includes the fifth
anniversary of the date of the
employee’s death.
(3) 10-year rule. Distributions satisfy
this paragraph (c)(3) if the employee’s
entire interest is distributed by the end
of the calendar year that includes the
tenth anniversary of the date of the
employee’s death. For example, if an
employee died on any day in 2021, the
entire interest must be distributed by
the end of 2031 in order to satisfy the
5-year rule in section 401(a)(9)(B)(ii), as
extended to 10 years by section
401(a)(9)(H)(i).
(4) Life expectancy payments.
Distributions satisfy this paragraph
(c)(4) if annual distributions that satisfy
the requirements of § 1.401(a)(9)–5
commence by the end of the calendar
year following the calendar year in
which the employee died, except as
provided in paragraph (d) of this section
(permitting a surviving spouse to delay
the commencement of distributions).
The requirement to take an annual
distribution in accordance with the
preceding sentence continues to apply
for all subsequent calendar years until
the employee’s interest is fully
distributed. Thus, a required minimum
distribution is due for the calendar year
of the eligible designated beneficiary’s
death, and that amount must be
distributed during that calendar year to
any beneficiary of the deceased eligible
designated beneficiary to the extent it
has not already been distributed to the
eligible designated beneficiary.
(5) Determination of which rule
applies—(i) No plan provision. If a
defined contribution plan does not
include an optional provision described
in paragraph (c)(5)(ii) or (c)(5)(iii) of this
section specifying the method of
distribution after the death of an
employee, distributions must be made
as follows—
(A) If the employee does not have a
designated beneficiary, as determined
under § 1.401(a)(9)–4, distributions
must satisfy the 5-year rule described in
paragraph (c)(2) of this section;
(B) If the employee dies on or after the
effective date of section 401(a)(9)(H) (as
determined in § 1.401(a)(9)–1(b)(2)(i) or
(ii), whichever applies to the plan) and
has a designated beneficiary who is not
an eligible designated beneficiary (as
determined under § 1.401(a)(9)–4(e)),
distributions must satisfy the 10-year
rule described in paragraph (c)(3) of this
section; and

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(C) If the employee has an eligible
designated beneficiary, distributions
must satisfy the life expectancy rule
described in paragraph (c)(4) of this
section.
(ii) Optional plan provisions. A
defined contribution plan will not fail to
satisfy section 401(a)(9) merely because
it includes a provision specifying that
the 10-year rule described in paragraph
(c)(3) of this section (rather than the life
expectancy rule described in paragraph
(c)(4) of this section) will apply with
respect to some or all of the employees
who have an eligible designated
beneficiary or will apply to some
categories of eligible designated
beneficiaries.
(iii) Elections. A defined contribution
plan will not fail to satisfy section
401(a)(9) merely because it includes a
provision that applies with respect to
some or all of the employees who have
an eligible designated beneficiary or to
some categories of eligible designated
beneficiaries, under which the
employee (or eligible designated
beneficiary) is permitted to elect
whether the 10-year rule in paragraph
(c)(3) of this section or the life
expectancy rule in paragraph (c)(4) of
this section applies. If a plan provides
for this type of election, then—
(A) The plan must specify the method
of distribution that applies if neither the
employee nor the designated beneficiary
makes the election unless that method
is the method specified in paragraph
(c)(5)(i) of this section;
(B) The election must be made no
later than the end of the earlier of the
calendar year by which distributions
must be made in order to satisfy
paragraph (c)(3) of this section and the
calendar year in which distributions
would be required to begin in order to
satisfy the requirements of paragraph
(c)(4) of this section (or, if applicable,
paragraph (d) of this section); and
(C) As of the last date the election
may be made, the election must be
irrevocable with respect to the
beneficiary (and all subsequent
beneficiaries) and must apply to all
subsequent calendar years.
(d) Permitted delay for surviving
spouse beneficiaries. If the employee’s
surviving spouse is the employee’s sole
beneficiary, then the commencement of
distributions under paragraph (b)(3) or
(c)(4) of this section may be delayed
until the end of the calendar year in
which the employee would have
attained the applicable age.
(e) Distributions that commence after
surviving spouse’s death—(1) In general.
If the employee’s surviving spouse is the
employee’s sole beneficiary and dies
before distributions have commenced

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under paragraph (d) of this section, then
the 5-year rule in paragraph (b)(2) or
(c)(2) of this section, the 10-year rule in
paragraph (c)(3) of this section, the
annuity payment rules in paragraph
(b)(3) of this section, or the life
expectancy rules in paragraph (c)(4) of
this section, are to be applied as if the
surviving spouse were the employee.
For this purpose, the date of death of the
surviving spouse is substituted for the
date of death of the employee.
(2) Remarriage of surviving spouse. If
the delayed commencement in
paragraph (d) of this section applies to
the surviving spouse of the employee,
and the surviving spouse remarries but
dies before distributions have begun,
then the rules in paragraph (d) of this
section are not available to the surviving
spouse of the deceased employee’s
surviving spouse.
(3) When distributions are treated as
having begun to surviving spouse. For
purposes of section 401(a)(9)(B)(iv)(III),
distributions are considered to have
begun to the surviving spouse of an
employee on the date, determined in
accordance with paragraph (d) of this
section, on which distributions are
required to commence to the surviving
spouse without regard to whether
payments have actually been made
before that date. However, see
§ 1.401(a)(9)–6(l) for an exception to this
rule in the case of an annuity that
commences early.
§ 1.401(a)(9)–4 Determination of the
designated beneficiary.

(a) Beneficiary designated under the
plan—(1) In general. This section
provides rules for purposes of
determining the designated beneficiary
under section 401(a)(9). For this
purpose, a designated beneficiary is an
individual who is a beneficiary
designated under the plan.
(2) Entitlement to employee’s interest
in the plan. A beneficiary designated
under the plan is a person who is
entitled to a portion of an employee’s
benefit, contingent on the employee’s
death or another specified event. The
determination of whether a beneficiary
designated under the plan is taken into
account for purposes of section 401(a)(9)
is made in accordance with paragraph
(c) of this section or, if applicable,
paragraph (d) of this section.
(3) Specificity of beneficiary
designation. A beneficiary need not be
specified by name in the plan or by the
employee to the plan in order for the
beneficiary to be designated under the
plan, provided that the person who is to
be the beneficiary is identifiable
pursuant to the designation. For
example, a designation of the

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58913

employee’s children as beneficiaries of
equal shares of the employee’s interest
in the plan is treated as a designation of
beneficiaries under the plan even if the
children are not specified by name. The
fact that an employee’s interest under
the plan passes to a certain person
under a will or otherwise under
applicable State law does not make that
person a beneficiary designated under
the plan absent a designation under the
plan.
(4) Affirmative and default elections
of designated beneficiary. A beneficiary
designated under the plan may be
designated by a default election under
the terms of the plan or, if the plan so
provides, by an affirmative election of
the employee (or the employee’s
surviving spouse). The choice of
beneficiary is subject to the
requirements of sections 401(a)(11),
414(p), and 417. See §§ 1.401(a)(9)–8(d)
and (e) for rules that apply to qualified
domestic relations orders.
(b) Designated beneficiary must be an
individual. A person that is not an
individual, such as the employee’s
estate, is not a designated beneficiary. If
a person other than an individual is a
beneficiary designated under the plan,
the employee will be treated as having
no designated beneficiary, even if
individuals are also designated as
beneficiaries. However, see paragraphs
(f)(1) and (3) of this section for a rule
under which certain beneficiaries of a
see-through trust that is designated as
the employee’s beneficiary under the
plan are treated as the employee’s
beneficiaries under the plan rather than
the trust and § 1.401(a)(9)–8(a) for rules
under which section 401(a)(9) is applied
separately with respect to the separate
interests of each of the employee’s
beneficiaries under the plan.
(c) Rules for determining
beneficiaries—(1) Time period for
determining the beneficiary. Except as
provided in paragraphs (d) and (f) of
this section and § 1.401(a)(9)–6(b)(2)(i),
a person is a beneficiary taken into
account for purposes of section 401(a)(9)
if, as of the date of the employee’s
death, that person is a beneficiary
designated under the plan and none of
the events described in paragraph (c)(2)
of this section has occurred with respect
to that person by September 30 of the
calendar year following the calendar
year of the employee’s death.
(2) Circumstances under which a
beneficiary is disregarded as a
beneficiary of the employee. With
respect to a beneficiary who was
designated as a beneficiary under the
plan as of the date of the employee’s
death (including a beneficiary who is
treated as having been designated as a

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beneficiary pursuant to paragraph (f) of
this section), if any of the following
events occurs by September 30 of the
calendar year following the calendar
year of the employee’s death, then that
beneficiary is not treated as a
beneficiary—
(i) The beneficiary predeceases the
employee;
(ii) The beneficiary is treated as
having predeceased the employee
pursuant to a simultaneous death
provision under applicable State law or
pursuant to a qualified disclaimer
satisfying section 2518 that applies to
the entire interest to which the
beneficiary is entitled; or
(iii) The beneficiary receives the
entire benefit to which the beneficiary is
entitled.
(3) Examples. The following examples
illustrate the rules of this paragraph (c).
(i) Example 1. Employer M maintains
a defined contribution plan, Plan X.
Employee A dies in 2024 having
designated A’s three children—B, C, and
D—as beneficiaries, each with a onethird share of A’s interest in Plan X. B
executes a disclaimer of B’s entire share
of A’s interest in Plan X within 9
months of A’s death and the disclaimer
satisfies the other requirements of a
qualified disclaimer under section 2518.
Pursuant to the qualified disclaimer, B
is disregarded as a beneficiary.
(ii) Example 2. The facts are the same
as in paragraph (c)(3)(i) of this section
(Example 1), except that B does not
execute the disclaimer until 10 months
after A’s death. Even if the disclaimer is
executed by September 30 of the
calendar year following the calendar
year of A’s death, the disclaimer is not
a qualified disclaimer (because B does
not meet the 9-month requirement of
section 2518) and B remains a
designated beneficiary of A.
(iii) Example 3. The facts are the same
as in paragraph (c)(3)(i) of this section
(Example 1) except that, in exchange for
B’s disclaimer of the one-third share of
A’s interest in Plan X, C transfers C’s
interest in real property to B. Because B
has received consideration for B’s
disclaimer of the one-third share, it is
not a qualified disclaimer under section
2518 and B remains a designated
beneficiary.
(iv) Example 4. The facts are the same
as in paragraph (c)(3)(i) of this section
(Example 1), except that Charity E (an
organization exempt from taxation
under section 501(c)(3)) also is a
beneficiary designated under the plan as
of the date of A’s death, with B, C, D,
and Charity E each having a one-fourth
share of A’s interest in Plan X. Plan X
distributes Charity E’s one-fourth share
of A’s interest in the plan by September

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30 of the calendar year following the
calendar year of A’s death. Accordingly,
Charity E is disregarded as A’s
beneficiary, and B, C, and D are treated
as A’s designated beneficiaries.
(v) Example 5. The facts are the same
as in paragraph (c)(3)(i) of this section
(Example 1), except that A’s spouse, F,
also is a beneficiary designated under
the plan. A and F were residents of State
Z so that State Z law applies. The laws
of State Z include a simultaneous death
provision under which two individuals
who die within a 120-hour period of one
another are treated as predeceasing each
other. F dies four hours after A and
under the laws of State Z, F is treated
as predeceasing A. Because, under
applicable State law, F is treated as
predeceasing A, F is disregarded as a
beneficiary of A.
(vi) Example 6. The facts are the same
as in paragraph (c)(3)(i) of this section
(Example 1), except that B, who was
alive as of the date of A’s death, dies
before September 30 of the calendar
year following the calendar year of A’s
death. Prior to B’s death, none of the
events described in paragraph (c)(2) of
this section occurred with respect to B.
Accordingly, B is still a beneficiary
taken into account for purposes of
section 401(a)(9) regardless of the
identity of B’s successor beneficiaries.
(d) Application of beneficiary
designation rules to surviving spouse.
This paragraph (d) applies in the case of
distributions to which § 1.401(a)(9)–3(e)
applies (because the employee’s spouse
is the employee’s sole beneficiary as of
September 30 of the calendar year
following the calendar year of the
employee’s death, and the surviving
spouse dies before distributions to the
spouse have begun). If this paragraph (d)
applies, then the determination of
whether a person is a beneficiary of the
surviving spouse is made using the rules
of paragraph (c) of this section, except
that the date of the surviving spouse’s
death is substituted for the date of the
employee’s death. Thus, a person is a
beneficiary if, as of the date of the
surviving spouse’s death, that person is
a beneficiary designated under the plan
and remains a beneficiary as of
September 30 of the calendar year
following the calendar year of the
surviving spouse’s death.
(e) Eligible designated beneficiaries—
(1) In general. A designated beneficiary
of the employee is an eligible designated
beneficiary if, at the time of the
employee’s death, the designated
beneficiary is—
(i) The surviving spouse of the
employee;
(ii) A child of the employee (within
the meaning of section 152(f)(1)) who

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has not reached the age of majority
within the meaning of paragraph (e)(3)
of this section;
(iii) Disabled within the meaning of
paragraph (e)(4) of this section;
(iv) Chronically ill within the
meaning of paragraph (e)(5) of this
section;
(v) Not more than 10 years younger
than the employee as determined under
paragraph (e)(6) of this section; or
(vi) A designated beneficiary of an
employee if the employee died before
the effective date of section 401(a)(9)(H)
described in § 1.401(a)(9)–1(b)(2)(i) and
(ii), whichever applies to the plan.
(2) Multiple designated
beneficiaries—(i) In general. Except as
provided in paragraphs (e)(2)(ii) and (iii)
of this section and § 1.401(a)(9)–8(a)
(relating to separate account treatment),
if the employee has more than one
designated beneficiary, and at least one
of those beneficiaries is not an eligible
designated beneficiary, then the
employee is treated as not having an
eligible designated beneficiary.
(ii) Special rule for children. If any of
the employee’s designated beneficiaries
is an eligible designated beneficiary
because the beneficiary is the child of
the employee who had not reached the
age of majority at the time of the
employee’s death, then the employee is
treated as having an eligible designated
beneficiary even if the employee has
other designated beneficiaries who are
not eligible designated beneficiaries.
(iii) Special rule for applicable multibeneficiary trust. If a trust that is
designated as the beneficiary of an
employee under a plan is an applicable
multi-beneficiary trust described in
paragraph (g) of this section, then the
trust beneficiaries described in
paragraph (g)(1)(ii) of this section are
treated as eligible designated
beneficiaries even if one or more of the
other trust beneficiaries are not eligible
designated beneficiaries.
(3) Determination of age of majority.
An individual reaches the age of
majority on the individual’s 21st
birthday.
(4) Disabled individual—(i) In
general. Subject to the documentation
requirements of paragraph (e)(7) of this
section, an individual is disabled if, as
of the date of the employee’s death—
(A) The individual is described in
paragraph (e)(4)(ii) or (iii) of this
section; or
(B) Paragraph (e)(4)(iv) of this section
applies to the individual.
(ii) Disability defined for individual
who is age 18 or older. An individual
who, as of the date of the employee’s
death, is age 18 or older is disabled if,
as of that date, the individual is unable

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to engage in any substantial gainful
activity by reason of any medically
determinable physical or mental
impairment that can be expected to
result in death or to be of longcontinued and indefinite duration.
(iii) Disability defined for individual
who is not age 18 or older. An
individual who, as of the date of the
employee’s death, is not age 18 or older
is disabled if, as of that date, that
individual has a medically determinable
physical or mental impairment that
results in marked and severe functional
limitations and that can be expected to
result in death or to be of longcontinued and indefinite duration.
(iv) Use of social security disability
determination. If the Commissioner of
Social Security has determined that, as
of the date of the employee’s death, an
individual is disabled within the
meaning of 42 U.S.C. 1382c(a)(3), then
that individual will be deemed to be
disabled within the meaning of this
paragraph (e)(4).
(5) Chronically ill individual. An
individual is chronically ill if the
individual is chronically ill within the
definition of section 7702B(c)(2) and
satisfies the documentation
requirements of paragraph (e)(7) of this
section. However, for purposes of the
preceding sentence, an individual will
be treated as chronically ill under
section 7702B(c)(2)(A)(i) only if there is
a certification from a licensed health
care practitioner (as that term is defined
in section 7702B(c)(4)) that, as of the
date of the certification, the individual
is unable to perform (without
substantial assistance from another
individual) at least 2 activities of daily
living and the period of that inability is
an indefinite one that is reasonably
expected to be lengthy in nature.
(6) Individual not more than 10 years
younger than the employee. Whether a
designated beneficiary is not more than
10 years younger than the employee is
determined based on the dates of birth
of the employee and the beneficiary.
Thus, for example, if an employee’s date
of birth is October 1, 1953, then the
employee’s beneficiary is not more than
10 years younger than the employee if
the beneficiary was born on or before
October 1, 1963.
(7) Documentation requirements for
disabled or chronically ill individuals.
This paragraph (e)(7) is satisfied with
respect to an individual described in
paragraph (e)(1)(iii) or (iv) of this
section if documentation of the
disability or chronic illness described in
paragraph (e)(4) or (5) of this section,
respectively, is provided to the plan
administrator by October 31 of the
calendar year following the calendar

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year of the employee’s death (or October
31, 2025, if later). For individuals
described in paragraph (e)(1)(iv) of this
section, the documentation must
include a certification from a licensed
health care practitioner (as that term is
defined in section 7702B(c)(4)).
(8) Applicability of definition of
eligible designated beneficiary to
beneficiary of surviving spouse. In a
case to which § 1.401(a)(9)–3(e) applies,
a designated beneficiary of the
employee’s surviving spouse is an
eligible designated beneficiary provided
that designated beneficiary would be an
eligible designated beneficiary
described in paragraph (e)(1) of this
section if that paragraph were to be
applied by substituting the surviving
spouse for the employee.
(9) Examples. The following examples
illustrate the rules of this paragraph (e).
(i) Example 1. Employer M maintains
a defined contribution plan, Plan X.
Employee A designates A’s child, B, as
the sole beneficiary of A’s interest in
Plan X. B will not reach the age of
majority until 2024. A dies on July 1,
2022, after A’s required beginning date.
As of the date of A’s death, B is disabled
within the meaning of paragraph (e)(4)
of this section. On November 1, 2024, B
satisfies the requirements of paragraph
(e)(7) of this section by providing the
plan administrator a letter from a
licensed health care practitioner stating
that, as of July 1, 2022, B is unable to
engage in any substantial gainful
activity by reason of a physical
impairment that can be expected to be
of long-continued and indefinite
duration. Due to B’s disability, B
remains an eligible designated
beneficiary even after reaching the age
of majority in 2024, and Plan X is not
required to distribute A’s remaining
interest in the plan by the end of 2034
pursuant to the rules of § 1.401(a)(9)–
5(e)(4), but instead may continue life
expectancy payments to B during B’s
lifetime.
(ii) Example 2. The facts are the same
as in paragraph (e)(9)(i) of this section
(Example 1), except that the
documentation requirements of
paragraph (e)(7) of this section are not
timely satisfied with respect to B. B
ceases to be an eligible designated
beneficiary upon reaching the age of
majority in 2024, and Plan X is required
to distribute A’s remaining interest in
the plan by the end of 2034 pursuant to
the rules of § 1.401(a)(9)–5(e)(4).
(iii) Example 3. The facts are the same
as in paragraph (e)(9)(i) of this section
(Example 1), except that B becomes
disabled in 2023 (after A’s death in
2022). Because B was not disabled as of
the date of A’s death, B ceases to be an

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58915

eligible designated beneficiary upon
reaching the age of majority in 2024,
and Plan X is required to distribute A’s
remaining interest in the plan by the
end of 2034 pursuant to the rules of
§ 1.401(a)(9)–5(e)(4).
(f) Special rules for trusts—(1) Lookthrough of trust to determine designated
beneficiaries—(i) In general. If a trust
that is designated as the beneficiary of
an employee under a plan meets the
requirements of paragraph (f)(2) of this
section, then certain beneficiaries of the
trust that are described in paragraph
(f)(3) of this section (and not the trust
itself) are treated as having been
designated as beneficiaries of the
employee under the plan, provided that
those beneficiaries are not disregarded
under paragraph (c)(2) of this section. A
trust described in the preceding
sentence is referred to as a see-through
trust.
(ii) Types of trusts. The determination
of which beneficiaries of a see-through
trust are treated as having been
designated as beneficiaries of the
employee under the plan depends on
whether the see-through trust is a
conduit trust or an accumulation trust.
For this purpose—
(A) The term conduit trust means a
see-through trust, the terms of which
provide that, with respect to the
deceased employee’s interest in the
plan, all distributions will, upon receipt
by the trustee, be paid directly to, or for
the benefit of, specified trust
beneficiaries; and
(B) The term accumulation trust
means any see-through trust that is not
a conduit trust.
(2) Trust requirements. The
requirements of this paragraph (f)(2) are
met if, during any period for which
required minimum distributions are
being determined by treating the
beneficiaries of the trust as having been
designated as beneficiaries of the
employee under the plan, the following
requirements are met—
(i) The trust is a valid trust under
State law or would be but for the fact
that there is no corpus.
(ii) The trust is irrevocable or will, by
its terms, become irrevocable upon the
death of the employee.
(iii) The beneficiaries of the trust who
are beneficiaries with respect to the
trust’s interest in the employee’s interest
in the plan are identifiable (within the
meaning of paragraph (f)(5) of this
section) from the trust instrument.
(iv) The documentation requirements
in paragraph (h) of this section have
been satisfied.
(3) Trust beneficiaries treated as
beneficiaries of the employee—(i) In
general. Subject to the rules of

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paragraphs (f)(3)(ii) and (iii) of this
section, the following beneficiaries of a
see-through trust are treated as having
been designated as beneficiaries of the
employee under the plan—
(A) Any beneficiary that could receive
amounts in the trust representing the
employee’s interest in the plan that are
neither contingent upon, nor delayed
until, the death of another trust
beneficiary who did not predecease (and
who is not treated as having
predeceased) the employee; and
(B) Any beneficiary of an
accumulation trust that could receive
amounts in the trust representing the
employee’s interest in the plan that
were not distributed to beneficiaries
described in paragraph (f)(3)(i)(A) of this
section.
(ii) Certain trust beneficiaries
disregarded—(A) Entitlement
conditioned on death of beneficiary.
Any beneficiary of an accumulation
trust who could receive amounts from
the trust representing the employee’s
interest in the plan solely because of the
death of another beneficiary described
in paragraph (f)(3)(i)(B) of this section is
not treated as having been designated as
a beneficiary of the employee under the
plan. The preceding sentence does not
apply if the deceased beneficiary
described in paragraph (f)(3)(i)(B) of this
section—
(1) Predeceased (or is treated as
having predeceased) the employee; or
(2) Also is described in paragraph
(f)(3)(i)(A) of this section.
(B) Entitlement conditioned on death
of young individual. If a beneficiary of
a see-through trust is an individual who
is treated as a beneficiary of the
employee under paragraph (f)(3)(i)(A) of
this section, and the terms of the trust
require full distribution of amounts in
the trust representing the employee’s
interest in the plan to that individual by
the later of the end of the calendar year
following the calendar year of the
employee’s death or the end of the
calendar year that includes the tenth
anniversary of the date on which that
individual reaches the age of majority
(within the meaning of paragraph (e)(3)
of this section), then any other
beneficiary of the trust who could
receive amounts in the trust
representing the employee’s interest in
the plan if that individual dies before
full distribution to that individual is
made is not treated as having been
designated as a beneficiary of the
employee under the plan. The preceding
sentence does not apply if the
beneficiary who could receive amounts
in the trust conditioned on the death of
that individual also is described in
paragraph (f)(3)(i)(A) of this section.

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(iii) Certain accumulations
disregarded. For purposes of this
paragraph (f)(3), a trust will not fail to
be treated as a conduit trust merely
because the trust terms requiring that
distributions from the plan, upon
receipt by the trustee, are paid directly
to, or for the benefit of, trust
beneficiaries do not apply after the
death of all of the beneficiaries
described in paragraph (f)(3)(i)(A) of this
section.
(iv) Treatment of payments for the
benefit of a trust beneficiary. For
purposes of this paragraph (f)(3), a trust
beneficiary will be treated as if the
beneficiary could receive amounts in
the trust representing the employee’s
interest in the plan regardless of
whether those amounts could be paid to
that beneficiary or for the benefit of that
beneficiary. Thus, for example, if a trust
beneficiary is a minor child of the
employee, payments that could be made
to a custodial account for the benefit of
that child are treated as amounts that
could be received by the child.
(4) Multiple trust arrangements. If a
beneficiary of a see-through trust is
another trust, the beneficiaries of the
second trust will be treated as
beneficiaries of the first trust, provided
that the requirements of paragraph (f)(2)
of this section are satisfied with respect
to the second trust. In that case, the
beneficiaries of the second trust are
treated as having been designated as
beneficiaries of the employee under the
plan.
(5) Identifiability of trust
beneficiaries—(i) In general. Except as
otherwise provided in this paragraph
(f)(5), trust beneficiaries described in
paragraph (f)(3) of this section are
identifiable if it is possible to identify
each person eligible to receive a portion
of the employee’s interest in the plan
through the trust. For this purpose, the
specificity requirements of paragraph
(a)(3) of this section apply.
(ii) Power of appointment—(A)
Exercise or release of power of
appointment by September 30. A trust
does not fail to satisfy the identifiability
requirements of this paragraph (f)(5)
merely because an individual
(powerholder) has the power to appoint
a portion of the employee’s interest to
one or more beneficiaries that are not
identifiable within the meaning of
paragraph (f)(5)(i) of this section. If the
power of appointment is exercised in
favor of one or more identifiable
beneficiaries by September 30 of the
calendar year following the calendar
year of the employee’s death, then those
identifiable beneficiaries are treated as
beneficiaries designated under the plan.
The preceding sentence also applies if,

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by that September 30, in lieu of
exercising the power of appointment,
the powerholder restricts it so that the
power can be exercised at a later time
in favor of only two or more identifiable
beneficiaries (in which case, those
identified beneficiaries are treated as
beneficiaries designated under the
plan). However, if, by that September
30, the power of appointment is not
exercised (or restricted) in favor of one
or more beneficiaries that are
identifiable within the meaning of
paragraph (f)(5)(i) of this section, then
each taker in default (that is, any person
that is entitled to the portion that
represents the employee’s interest in the
plan subject to the power of
appointment in the absence of the
powerholder’s exercise of the power) is
treated as a beneficiary designated
under the plan.
(B) Exercise of power of appointment
after September 30 of the calendar year
following the calendar year of the
employee’s death. If an individual has a
power of appointment to appoint a
portion of the employee’s interest to one
or more beneficiaries and the individual
exercises the power of appointment
after September 30 of the calendar year
following the calendar year of the
employee’s death, then the rules of
paragraph (f)(5)(iv) of this section apply
with respect to any trust beneficiary that
is added pursuant to the exercise of the
power of appointment.
(iii) Modification of trust terms—(A)
State law will not cause trust to fail to
satisfy identifiability requirement. A
trust will not fail to satisfy the
identifiability requirements of this
paragraph (f)(5) merely because the trust
is subject to State law that permits the
trust terms to be modified after the
death of the employee (such as through
a court reformation or a permitted
decanting) and thus, permits changing
the beneficiaries of the trust.
(B) Modification of trust to remove
trust beneficiaries. If a trust beneficiary
described in paragraph (f)(3) of this
section is removed pursuant to a
modification of trust terms (such as
through a court reformation or a
permitted decanting) by September 30
of the calendar year following the
calendar year of the employee’s death,
then that person is disregarded in
determining the employee’s designated
beneficiary.
(C) Modification of trust to add trust
beneficiaries. If a trust beneficiary
described in paragraph (f)(3) of this
section is added through a modification
of trust terms (such as through a court
reformation or a permitted decanting)
on or before September 30 of the
calendar year following the calendar

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year of the employee’s death, then
paragraph (c) of this section will apply
taking into account the beneficiary that
was added. If the beneficiary is added
after that September 30, then the rules
of paragraph (f)(5)(iv) of this section will
apply with respect to the addition of
that beneficiary.
(iv) Addition of beneficiary after
September 30. If, after September 30 of
the calendar year following the calendar
year of the employee’s death, a trust
beneficiary described in paragraph (f)(3)
of this section is added as a trust
beneficiary (whether through the
exercise of a power of appointment, the
modification of trust terms, or
otherwise), then—
(A) The addition of the beneficiary
will not cause the trust to fail to satisfy
the identifiability requirements of this
paragraph (f)(5);
(B) Beginning in the calendar year
following the calendar year in which the
new trust beneficiary was added, the
rules of § 1.401(a)(9)–5(f)(1) will apply
taking into account the new beneficiary
and all of the beneficiaries of the trust
that were treated as beneficiaries of the
employee before the addition of the new
beneficiary; and
(C) Subject to paragraph (f)(5)(v) of
this section, the rules of paragraphs (b)
and (e)(2) of this section and
§ 1.401(a)(9)–5(f)(2) will apply taking
into account the new beneficiary and all
of the beneficiaries of the trust that were
treated as beneficiaries of the employee
before the addition of the new
beneficiary.
(v) Delay in full distribution
requirement. This paragraph (f)(5)(v)
provides a special rule that applies if a
full distribution of the employee’s entire
interest in the plan is not required in a
calendar year pursuant to § 1.401(a)(9)–
5(e), but a beneficiary is added in that
calendar year. In that case, if, taking into
account the added beneficiary pursuant
to paragraph (f)(5)(iv)(C) of this section,
a full distribution of the employee’s
entire interest in the plan would have
been required in that calendar year or an
earlier calendar year, then a full
distribution of the employee’s entire
interest in the plan will not be required
until the end of the calendar year
following the calendar year in which the
beneficiary is added. For example, if life
expectancy payments are being made to
an eligible designated beneficiary and,
more than 10 years after the employee’s
death, a beneficiary is added who is not
an eligible designated beneficiary as
described in paragraph (e) of this
section, then the employee is treated as
not having an eligible designated
beneficiary for purposes of
§ 1.401(a)(9)–5(e)(2) (so that a full

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distribution of the employee’s entire
interest in the plan would have been
required within 10 years of the
employee’s death). However, pursuant
to this paragraph (f)(5)(v), the full
distribution of the employee’s entire
interest in the plan is not required until
the end of the calendar year following
the calendar year in which the new trust
beneficiary was added.
(6) Examples. The following examples
illustrate the see-through trust rules of
this paragraph (f).
(i) Example 1—(A) Facts. Employer L
maintains a defined contribution plan,
Plan W. Unmarried Employee C died in
2024 at age 30. Prior to C’s death, C
named a testamentary trust (Trust T)
that satisfies the requirements of
paragraph (f)(2) of this section, as the
beneficiary of C’s interest in Plan W.
The terms of Trust T require that all
distributions received from Plan W,
upon receipt by the trustee, be paid
directly to D, C’s sibling, who is 5 years
older than C. The terms of Trust T also
provide that, if D dies before C’s entire
account balance has been distributed to
D, E will be the beneficiary of C’s
remaining account balance.
(B) Analysis. Pursuant to paragraph
(f)(1)(ii)(A) of this section, Trust T is a
conduit trust. Because Trust T is a
conduit trust (meaning the residual
beneficiary rule in paragraph (f)(3)(i)(B)
of this section does not apply) and
because E is only entitled to any portion
of C’s account if D dies before the entire
account has been distributed, E is
disregarded in determining C’s
designated beneficiary. Because D is an
eligible designated beneficiary, D may
use the life expectancy rule of
§ 1.401(a)(9)–3(c)(4). Accordingly, even
if D dies before C’s entire interest in
Plan W is distributed to Trust T, D’s life
expectancy continues to be used to
determine the applicable denominator.
Note, however, that because
§ 1.401(a)(9)–5(e)(3) applies in this
situation, a distribution of C’s entire
interest in Plan W will be required no
later than the end of the calendar year
that includes the tenth anniversary of
D’s death.
(ii) Example 2—(A) Facts related to
plan and beneficiary. Employer M
maintains a defined contribution plan,
Plan X. Employee A died in 2024 at the
age of 55, survived by Spouse B, who
was then 50 years old. A’s account
balance in Plan X is invested only in
productive assets and was includible in
A’s gross estate under section 2039. A
named a testamentary trust (Trust P) as
the beneficiary of all amounts payable
from A’s account in Plan X after A’s
death. Trust P satisfies the see-through

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58917

trust requirements of paragraph (f)(2) of
this section.
(B) Facts related to trust. Under the
terms of Trust P, all trust income is
payable annually to B, and no one has
the power to appoint or distribute Trust
P principal to any person other than B.
A’s sibling, C, who is less than 10 years
younger than A (and thus is an eligible
designated beneficiary) and is younger
than B, is the sole residual beneficiary
of Trust P. Also, under the terms of
Trust P, if C predeceases B, then, upon
B’s death, all Trust P principal is
distributed to Charity Z (an organization
exempt from tax under section
501(c)(3)). No other person has a
beneficial interest in Trust P. Under the
terms of Trust P, B has the power,
exercisable annually, to compel the
trustee to withdraw from A’s account
balance in Plan X an amount equal to
the income earned during the calendar
year on the assets held in A’s account
in Plan X and to distribute that amount
through Trust P to B. Plan X includes no
prohibition on withdrawal from A’s
account of amounts in excess of the
annual required minimum distributions
under section 401(a)(9). In accordance
with the terms of Plan X, the trustee of
Trust P elects to take annual life
expectancy payments pursuant to
section 401(a)(9)(B)(iii). If B exercises
the withdrawal power, the trustee must
withdraw from A’s account under Plan
X the greater of the amount of income
earned in the account during the
calendar year or the required minimum
distribution. However, under the terms
of Trust P, and applicable State law,
only the portion of the Plan X
distribution received by the trustee
equal to the income earned by A’s
account in Plan X is required to be
distributed to B (along with any other
trust income).
(C) Analysis. Because Trust P does not
require that distributions from A’s
account in Plan X to Trust P, upon
receipt by the trustee, be paid directly
to (or for the benefit of) B, Trust P is not
a conduit trust and accordingly is an
accumulation trust (as described in
paragraph (f)(1)(ii)(B) of this section).
Pursuant to paragraph (f)(3)(i)(B) of this
section, C, as the residual beneficiary of
Trust P, is treated as a beneficiary
designated under Plan X (even though
access to those amounts is delayed until
after B’s death). Pursuant to paragraph
(f)(2)(iii)(A) of this section, because
Charity Z’s entitlement to amounts in
the trust is based on the death of a
beneficiary described in paragraph
(f)(3)(i)(B) of this section who is not also
described in paragraph (f)(3)(i)(A) of this
section, Charity Z is disregarded as a
beneficiary of A. Under § 1.401(a)(9)–

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5(f)(1), the designated beneficiary used
to determine the applicable
denominator is the oldest of the
designated beneficiaries of Trust P’s
interest in Plan X. B is the oldest of the
beneficiaries of Trust P’s interest in Plan
X (including residual beneficiaries).
Thus, the applicable denominator for
purposes of section 401(a)(9)(B)(iii) is
B’s life expectancy. Because C is a
beneficiary of A’s account in Plan X in
addition to B, B is not the sole
beneficiary of A’s account and the
special rule in section 401(a)(9)(B)(iv)
and § 1.401(a)(9)–3(d) is not available.
Accordingly, the annual required
minimum distributions from the
account to Trust P must begin no later
than the end of the calendar year
following the calendar year of A’s death.
(iii) Example 3—(A) Facts. The facts
are the same as in paragraph (f)(6)(ii) of
this section (Example 2), except that C
is more than 10 years younger than A,
meaning that at least one of the
beneficiaries of Trust P’s interest in Plan
X is not an eligible designated
beneficiary.
(B) Analysis. Pursuant to paragraph
(e)(2)(i) of this section, A is treated as
not having an eligible designated
beneficiary. Pursuant to § 1.401(a)(9)–
3(c)(5), the trustee of Trust P is not
permitted to make an election to take
annual life expectancy distributions and
the 10-year rule of § 1.401(a)(9)–3(c)(3)
applies.
(iv) Example 4—(A) Facts related to
plan and beneficiary. Employer N
maintains a defined contribution plan,
Plan Y. Employee F died in 2025 at the
age of 60. F named a testamentary trust
(Trust Q), which was established under
F’s will, as the beneficiary of all
amounts payable from F’s account in
Plan X after F’s death. Trust Q satisfies
the see-through trust requirements of
paragraph (f)(2) of this section.
(B) Facts related to trust. Under the
terms of Trust Q, all trust income is
payable to F’s surviving spouse G for
life, no person has the power to appoint
or distribute Trust Q principal to any
person other than G, and G has a
testamentary power of appointment to
name the beneficiaries of the remainder
in Trust Q. The power of appointment
provides that, if G does not exercise the
power, then upon G’s death, F’s
descendants, per stirpes, are entitled to
the remainder interest in Trust Q. As of
the date of F’s death, F has two
children, K and L, neither of whom is
disabled, chronically ill, or under age
21. Before September 30 of the calendar
year following the calendar year in
which F died, G irrevocably restricts G’s
power of appointment so that G may
exercise the power to appoint the

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remainder beneficiaries of Trust Q only
in favor of G’s siblings (who all are less
than 10 years younger than F and thus,
are eligible designated beneficiaries).
(C) Analysis. Pursuant to paragraph
(f)(5)(ii)(A) of this section, because G
timely restricted the power of
appointment so that G may exercise the
power to appoint the residual interest in
Trust Q only in favor of G’s siblings, the
designated beneficiaries are G and G’s
siblings. Because all of the designated
beneficiaries are eligible designated
beneficiaries, annual life expectancy
payments are permitted under section
401(a)(9)(B)(iii). Note, however, that
because § 1.401(a)(9)–5(e)(3) applies, a
distribution of the remaining interest is
required by no later than 10 years after
the calendar year in which the oldest of
G and G’s siblings dies.
(v) Example 5—(A) Facts. The facts
are the same as in paragraph (f)(6)(iv) of
this section (Example 4), except that G
does not restrict the power by
September 30 of the calendar year
following the calendar year of F’s death.
(B) Analysis. Pursuant to paragraph
(f)(5)(ii)(A) of this section, G, K, and L
are treated as F’s beneficiaries. Pursuant
to § 1.401(a)(9)–3(c)(5), because K and L
are not eligible designated beneficiaries,
the trustee of Trust Q is not permitted
to make an election to take annual life
expectancy distributions, and the 10year rule of § 1.401(a)(9)–3(c)(3) applies.
(g) Applicable multi-beneficiary
trust—(1) Certain see-through trusts
with disabled or chronically ill
beneficiaries. An applicable multibeneficiary trust is a see-through trust
with more than one beneficiary and
with respect to which—
(i) All of the trust beneficiaries are
designated beneficiaries;
(ii) The trust terms identify one or
more individuals, each of whom is
disabled (as defined in paragraph
(e)(1)(iii) of this section) or chronically
ill (as defined in paragraph (e)(1)(iv) of
this section), who are described in
paragraph (f)(3)(i)(A) of this section; and
(iii) The terms of the trust provide
that no beneficiary (other than an
individual described in paragraph
(g)(1)(ii) of this section) has any right to
the employee’s interest in the plan until
the death of all of the eligible designated
beneficiaries described in paragraph
(g)(1)(ii) of this section.
(2) Termination of interest in trust. A
provision in the trust agreement that
permits the termination of the interest
in the trust of a beneficiary described in
paragraph (g)(1)(ii) of this section prior
to that beneficiary’s death will not cause
the trust to fail to be treated as an
applicable multi-beneficiary trust, but
only if paragraph (g)(1)(iii) of this

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section continues to apply. Upon the
death of the last to survive of the
beneficiaries described in paragraph
(g)(1)(ii) of this section, the trust is
treated as having been modified as of
the date of that death to add the other
trust beneficiaries. Thus, if the death
occurs after September 30 of the
calendar year following the calendar
year of the employee’s death, the rules
of paragraph (f)(5)(iv) of this section will
apply.
(3) Special definition of designated
beneficiary. For purposes of paragraph
(g)(1)(i) of this section, any beneficiary
that is an organization described in
section 408(d)(8)(B)(i) (certain
organizations to which a charitable
contribution may be made) is treated as
a designated beneficiary.
(h) Documentation requirements for
trusts—(1) General rule. The
documentation requirements of this
paragraph (h) are satisfied if—
(i) With respect to required minimum
distributions for a distribution calendar
year that begins on or before the date of
the employee’s death, paragraph (h)(2)
of this section is satisfied no later than
the first day of the distribution calendar
year; or
(ii) With respect to required minimum
distributions for a distribution calendar
year that begins after the date of the
employee’s death, or that begins after
the employee’s surviving spouse has
died in a case to which § 1.401(a)(9)–
3(d) applies, paragraph (h)(3) of this
section is satisfied no later than October
31 of the calendar year following the
calendar year that includes the
employee’s date of death or the date of
death of the employee’s surviving
spouse, respectively.
(2) Required minimum distributions
while employee is still alive—(i) In
general. If an employee designates a
trust as the beneficiary of the
employee’s entire benefit and the
employee’s spouse is the only
beneficiary of the trust treated as a
beneficiary of the employee pursuant to
the rules of paragraph (f) of this section,
then, in order to satisfy the
documentation requirements of this
paragraph (h)(2) (so that the applicable
denominator for a distribution calendar
year may be determined under the rules
of § 1.401(a)(9)–5(c)(2), assuming the
other requirements of paragraph (f)(2) of
this section are satisfied), the employee
must satisfy either the requirements of
paragraph (h)(2)(ii) of this section
(requiring the employee to provide a
copy of the trust instrument) or the
requirements of paragraph (h)(2)(iii) of
this section (requiring the employee to
provide a list of beneficiaries). The plan
administrator may determine which of

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the two alternatives in the preceding
sentence is available to the employee.
(ii) Employee to provide copy of trust
instrument. An employee satisfies the
requirements of this paragraph (h)(2)(ii)
if the employee—
(A) Provides the plan administrator a
copy of the trust instrument; and
(B) Agrees that, if the trust instrument
is amended at any time in the future, the
employee will, within a reasonable
time, provide the plan administrator a
copy of each amendment.
(iii) Employee to provide list of
beneficiaries. An employee satisfies the
requirements of this paragraph (h)(2)(iii)
if the employee—
(A) Provides the plan administrator a
list of all of the beneficiaries of the trust
(including contingent beneficiaries)
with a description of the conditions on
their entitlement sufficient to establish
that the spouse is the only beneficiary
of the trust treated as a beneficiary of
the employee pursuant to the rules of
paragraph (f) of this section;
(B) Certifies that, to the best of the
employee’s knowledge, the list
described in paragraph (h)(2)(iii)(A) of
this section is correct and complete and
that the requirements of paragraphs
(f)(2)(i) through (iii) of this section are
satisfied; and
(C) Agrees that, if the trust instrument
is amended at any time in the future, the
employee will, within a reasonable
time, provide the plan administrator
corrected certifications to the extent that
the amendment changes any
information previously certified; and
(D) Agrees to provide a copy of the
trust instrument to the plan
administrator upon request.
(3) Required minimum distributions
after death—(i) In general. In order to
satisfy the documentation requirement
of this paragraph (h)(3) for required
minimum distributions after the death
of the employee (or after the death of the
employee’s surviving spouse in a case to
which § 1.401(a)(9)–3(d) applies), the
trustee of the trust must satisfy the
requirements of either paragraph
(h)(3)(ii) (requiring the trustee to
provide a list of beneficiaries) or
paragraph (h)(3)(iii) of this section
(requiring the trustee to provide a copy
of the trust instrument). The plan
administrator may determine which of
the two alternatives in the preceding
sentence is available for the trust.
(ii) Trustee to provide list of
beneficiaries. A trustee satisfies the
requirements of this paragraph (h)(3)(ii)
if the trustee—
(A) Provides the plan administrator a
final list of all beneficiaries of the trust
as of September 30 of the calendar year
following the calendar year of the death

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(including contingent beneficiaries)
with a description of the conditions on
their entitlement sufficient to establish
which of those beneficiaries are treated
as beneficiaries of the employee (or
surviving spouse, if applicable);
(B) Certifies that, to the best of the
trustee’s knowledge, this list is correct
and complete and that the requirements
of paragraphs (f)(2)(i) through (iii) of
this section are satisfied; and
(C) Agrees to provide a copy of the
trust instrument to the plan
administrator upon request.
(iii) Trustee to provide copy of trust
instrument. A trustee satisfies the
requirements of this paragraph (h)(3)(iii)
if the trustee provides the plan
administrator with a copy of the actual
trust document for the trust that is
named as a beneficiary of the employee
under the plan as of the employee’s date
of death.
(4) Relief for discrepancy between
trust instrument and employee
certifications or earlier trust
instruments—(i) In general. If required
minimum distributions are determined
based on the information provided to
the plan administrator in certifications
or trust instruments described in
paragraph (h)(2) or (3) of this section, a
plan will not fail to satisfy section
401(a)(9) merely because the actual
terms of the trust instrument are
inconsistent with the information in
those certifications or trust instruments
previously provided to the plan
administrator, but only if—
(A) The plan administrator reasonably
relied on the information provided; and
(B) The required minimum
distributions for calendar years after the
calendar year in which the discrepancy
is discovered are determined based on
the actual terms of the trust instrument.
(ii) Excise tax. For purposes of
determining the amount of the excise
tax under section 4974, the required
minimum distribution is determined for
any year based on the actual terms of
the trust in effect during the year.
§ 1.401(a)(9)–5 Required minimum
distributions from defined contribution
plans.

(a) General rules—(1) In general.
Subject to the rules of paragraph (e) of
this section (requiring distribution of an
employee’s entire interest by a specified
deadline in certain situations), if an
employee’s accrued benefit is in the
form of an individual account under a
defined contribution plan, the minimum
amount required to be distributed for
each distribution calendar year
beginning with the first distribution
calendar year for the employee or
designated beneficiary (as determined

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58919

under paragraph (a)(2) of this section) is
equal to the quotient obtained by
dividing the account balance
(determined under paragraph (b) of this
section) by the applicable denominator
(determined under paragraph (c) or (d)
of this section, whichever applies).
However, the required minimum
distribution amount will never exceed
the entire account balance on the date
of the distribution. See paragraph (g)(1)
of this section for rules that apply if a
portion of the employee’s account is not
vested.
(2) Distribution calendar year—(i) In
general. A calendar year for which a
minimum distribution is required is a
distribution calendar year.
(ii) First distribution calendar year for
employee if employee dies on or after
required beginning date. If an
employee’s required beginning date is
April 1 of the calendar year following
the calendar year in which the
employee attains the applicable age,
then the employee’s first distribution
calendar year is the year the employee
attains the applicable age. If an
employee’s required beginning date is
April 1 of the calendar year following
the calendar year in which the
employee retires, the employee’s first
distribution calendar year is the
calendar year in which the employee
retires.
(iii) First distribution calendar year
for designated beneficiary if employee
dies before required beginning date. In
the case of an employee who dies before
the required beginning date, if the life
expectancy rule in § 1.401(a)(9)–3(c)(4)
applies, then the first distribution
calendar year for the designated
beneficiary is the calendar year
following the calendar year in which the
employee died (or, if applicable, the
calendar year described in § 1.401(a)(9)–
3(d)). See § 1.401(a)(9)–3(c)(5) to
determine whether the life expectancy
rule applies.
(3) Time for distributions. The
distribution required for the employee’s
first distribution calendar year (as
described in paragraph (a)(2)(ii) of this
section) may be made on or before April
1 of the following calendar year. The
required minimum distribution for any
other distribution calendar year
(including the required minimum
distribution for the distribution calendar
year in which the employee’s required
beginning date occurs or the first
distribution calendar year for the
designated beneficiary) must be made
on or before the end of that distribution
calendar year.
(4) Minimum distribution incidental
benefit requirement. If distributions of
an employee’s account balance under a

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defined contribution plan are made in
accordance with this section—
(i) With respect to the retirement
benefits provided by that account
balance, to the extent the incidental
benefit requirement of § 1.401–1(b)(1)(i)
requires distributions, that requirement
is deemed satisfied; and
(ii) No additional distributions are
required to satisfy section 401(a)(9)(G).
(5) Annuity contracts—(i) Purchase of
annuity contract permitted. A plan may
satisfy section 401(a)(9) by the purchase
of an annuity contract from an
insurance company in accordance with
§ 1.401(a)(9)–6(d) with the employee’s
entire individual account, provided that
the terms of the annuity satisfy
§ 1.401(a)(9)–6. However, a distribution
of an annuity contract is not a
distribution for purposes of this section.
(ii) Transition from defined
contribution rules to defined benefit
rules. If an annuity is purchased in
accordance with paragraph (a)(5)(i) of
this section after distributions are
required to commence (the required
beginning date, in the case of
distributions commencing before death,
or the calendar year determined under
§ 1.401(a)(9)–3(c)(4) or, if applicable,
§ 1.401(a)(9)–3(d), in the case of
distributions commencing after death),
then the plan will satisfy section
401(a)(9) only if, in the year of purchase,
distributions from the individual
account satisfy this section, and for
calendar years following the year of
purchase, payments under the annuity
contract are made in accordance with
§ 1.401(a)(9)–6. Payments under the
annuity contract during the year in
which the annuity contract is purchased
are treated as distributions from the
individual account for purposes of
determining whether the distributions
from the individual account satisfy this
section in the calendar year of purchase.
(iii) Bifurcation if annuity contract is
purchased with portion of employee’s
account. A portion of an employee’s
account balance under a defined
contribution plan is permitted to be
used to purchase an annuity contract
while another portion remains in the
account, provided that the requirements
of paragraphs (a)(5)(i) and (ii) of this
section are satisfied (other than the
requirement that the contract be
purchased with the employee’s entire
individual account). In that case, in
order to satisfy section 401(a)(9) for
calendar years after the calendar year of
purchase, the remaining account
balance under the plan must be
distributed in accordance with this
section.
(iv) Optional aggregation rule. In the
case of an annuity contract purchased

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with a portion of the employee’s
account balance, in lieu of applying
section 401(a)(9) separately with respect
to the annuity contract and the
remaining account balance as described
in paragraph (a)(5)(iii) of this section, a
plan may permit an employee to elect to
satisfy section 401(a)(9) for the annuity
contract and that account balance in the
aggregate by—
(A) Adding the fair market value of
the contract to the remaining account
balance determined under paragraph (b)
of this section; and
(B) Treating payments under the
annuity contract as distributions from
the employee’s individual account.
(v) [Reserved]
(6) Impact of additional distributions
in prior years. If, for any distribution
calendar year, the amount distributed
exceeds the required minimum
distribution for that calendar year, no
credit towards a required minimum
distribution will be given in subsequent
calendar years for the excess
distribution.
(b) Determination of account
balance—(1) General rule. In the case of
an individual account under a defined
contribution plan, the benefit used in
determining the required minimum
distribution for a distribution calendar
year is the account balance as of the last
valuation date in the calendar year
preceding that distribution calendar
year (valuation calendar year) adjusted
in accordance with this paragraph (b).
For this purpose, all of an employee’s
accounts under the plan are aggregated.
Thus, all separate accounts, including a
separate account for employee
contributions under section 72(d)(2), are
aggregated for purposes of this section.
(2) Adjustment for subsequent
allocations and distributions—(i)
Subsequent allocations. The account
balance is increased by the amount of
any contributions or forfeitures
allocated to the account balance as of
dates in the valuation calendar year
after the valuation date. For this
purpose, contributions that are allocated
to the account balance as of dates in the
valuation calendar year after the
valuation date, but that are not actually
made during the valuation calendar
year, may be excluded.
(ii) Subsequent distributions. The
account balance is decreased by
distributions made in the valuation
calendar year after the valuation date.
(3) Adjustment for designated Roth
accounts. For distribution calendar
years up to and including the calendar
year that includes the employee’s date
of death, the account balance does not
include amounts held in a designated

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Roth account (as described in section
402A(b)(2)).
(4) Exclusion for QLAC. The account
balance does not include the value of
any qualifying longevity annuity
contract (QLAC), defined in
§ 1.401(a)(9)–6(q), that is held under the
plan.
(5) Treatment of rollovers. If an
amount is distributed from a plan and
rolled over to another plan (receiving
plan), then the rules of § 1.401(a)(9)–7(b)
apply for purposes of determining the
benefit and required minimum
distribution under the receiving plan. If
an amount is transferred from one plan
(transferor plan) to another plan
(transferee plan) in a transfer to which
section 414(l) applies, then the rules of
§§ 1.401(a)(9)–7(c) and (d) apply for
purposes of determining the amount of
the benefit and required minimum
distribution under both the transferor
and transferee plans.
(c) Determination of applicable
denominator during employee’s
lifetime—(1) General rule. Except as
provided in paragraph (c)(2) of this
section (relating to a spouse beneficiary
who is more than 10 years younger than
the employee), the applicable
denominator for required minimum
distributions for each distribution
calendar year beginning with the
employee’s first distribution calendar
year (as described in paragraph (a)(2)(ii)
of this section) is determined using the
Uniform Lifetime Table in § 1.401(a)(9)–
9(c) for the employee’s age as of the
employee’s birthday in the relevant
distribution calendar year. The
requirement to take an annual
distribution calculated in accordance
with the preceding sentence applies for
every distribution calendar year up to
and including the calendar year that
includes the employee’s date of death.
Thus, a required minimum distribution
is due for the calendar year of the
employee’s death, and that amount must
be distributed during that year to any
beneficiary to the extent it has not
already been distributed to the
employee.
(2) Spouse is sole beneficiary—(i)
Determination of applicable
denominator. If the employee’s
surviving spouse who is more than 10
years younger than the employee is the
employee’s sole beneficiary, then the
applicable denominator is the joint and
last survivor life expectancy for the
employee and spouse determined using
the Joint and Last Survivor Table in
§ 1.401(a)(9)–9(d) for the employee’s
and spouse’s ages as of their birthdays
in the relevant distribution calendar
year (rather than the applicable

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denominator determined under
paragraph (c)(1) of this section).
(ii) Spouse must be sole beneficiary at
all times. Except as otherwise provided
in paragraph (c)(2)(iii) of this section
(relating to a death or divorce in a
calendar year), the spouse is the sole
beneficiary for purposes of determining
the applicable denominator for a
distribution calendar year during the
employee’s lifetime only if the spouse is
the sole beneficiary of the employee’s
entire interest at all times during the
distribution calendar year.
(iii) Change in marital status. If the
employee and the employee’s spouse
are married on January 1 of a
distribution calendar year, but do not
remain married throughout that year
(that is, the employee or the employee’s
spouse dies or they become divorced
during that year), the employee will not
fail to have a spouse as the employee’s
sole beneficiary for that year merely
because they are not married throughout
that year. However, the change in
beneficiary due to the death or divorce
of the spouse in a distribution calendar
year will be effective for purposes of
determining the applicable denominator
under section 401(a)(9) and this
paragraph (c) for the following calendar
years.
(d) Applicable denominator after
employee’s death—(1) Death on or after
the employee’s required beginning
date—(i) In general. If an employee dies
after distribution has begun as
determined under § 1.401(a)(9)–2(a)(3)
(generally, on or after the employee’s
required beginning date), distributions
must satisfy section 401(a)(9)(B)(i). In
order to satisfy this requirement, the
applicable denominator for distribution
calendar years that begin after the
employee’s death is determined under
the rules of this paragraph (d)(1) (or is
determined under the rules of paragraph
(g)(3) of this section, if applicable). The
requirement to take an annual
distribution in accordance with the
preceding sentence continues to apply
for every distribution calendar year
until the employee’s interest is fully
distributed. Thus, a required minimum
distribution is due for the calendar year
of the beneficiary’s death, and that
amount must be distributed during that
calendar year to any beneficiary of the
deceased beneficiary to the extent it has
not already been distributed to the
deceased beneficiary. If section
401(a)(9)(H) applies to the employee’s
interest in the plan, then the
distributions also must satisfy either
section 401(a)(9)(B)(ii) (applied by
substituting 10 years for 5 years) or, if
the beneficiary is an eligible designated
beneficiary, section 401(a)(9)(B)(iii)

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(taking into account sections
401(a)(9)(E)(iii) and 401(a)(9)(H)(iii)). In
order to satisfy those requirements, in
addition to determining the applicable
denominator under the rules of this
paragraph (d)(1), the distributions must
satisfy any applicable requirements
under paragraph (e) of this section.
(ii) Employee with designated
beneficiary. If the employee has a
designated beneficiary as of the date
determined under § 1.401(a)(9)–4(c), the
applicable denominator is the greater
of—
(A) The designated beneficiary’s
remaining life expectancy; and
(B) The employee’s remaining life
expectancy.
(iii) Employee with no designated
beneficiary. If the employee does not
have a designated beneficiary as of the
date determined under § 1.401(a)(9)–
4(c), the applicable denominator is the
employee’s remaining life expectancy.
(2) Death before an employee’s
required beginning date. If an employee
dies before distributions have begun (as
determined under § 1.401(a)(9)–2(a)(3))
and the life expectancy rule described
in § 1.401(a)(9)–3(c)(4) applies, then the
applicable denominator for distribution
calendar years beginning with the first
distribution calendar year for the
designated beneficiary (as described in
paragraph (a)(2)(iii) of this section) is
the designated beneficiary’s remaining
life expectancy (or is determined under
the rules of paragraph (g)(3) of this
section, if applicable).
(3) Remaining life expectancy—(i) Life
expectancy table. For purposes of this
paragraph (d), all life expectancies are
determined using the Single Life Table
in § 1.401(a)(9)–9(b).
(ii) Employee’s life expectancy. The
employee’s remaining life expectancy is
determined initially using the
employee’s age as of the employee’s
birthday in the calendar year of the
employee’s death. In subsequent
calendar years, the remaining life
expectancy is determined by reducing
that initial life expectancy by one for
each calendar year that has elapsed after
that first calendar year.
(iii) Non-spouse designated
beneficiary. If the designated beneficiary
is not the employee’s surviving spouse,
then the designated beneficiary’s
remaining life expectancy is determined
initially using the beneficiary’s age as of
the beneficiary’s birthday in the
calendar year following the calendar
year of the employee’s death. Except as
otherwise provided in paragraph
(d)(3)(iv) of this section, for subsequent
calendar years, the designated
beneficiary’s remaining life expectancy
is determined by reducing that initial

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58921

life expectancy by one for each calendar
year that has elapsed after that first
calendar year.
(iv) Spouse as designated beneficiary.
If the surviving spouse of the employee
is the employee’s sole beneficiary, then
the surviving spouse’s remaining life
expectancy is redetermined each
distribution calendar year up to and
including the calendar year of the
spouse’s death using the surviving
spouse’s age as of the surviving spouse’s
birthday in the distribution calendar
year. For each calendar year following
the calendar year of the spouse’s death,
the spouse’s remaining life expectancy
is determined by reducing the spouse’s
remaining life expectancy in the
calendar year of the spouse’s death by
one for each calendar year that has
elapsed after that calendar year.
(e) Distribution of employee’s entire
interest required—(1) In general. Except
as provided in paragraph (f) of this
section, if an employee’s accrued benefit
is in the form of an individual account
under a defined contribution plan, then
the entire interest of the employee must
be distributed by the end of the earliest
of the calendar years described in
paragraph (e)(2), (3), or (4) of this
section. However, the preceding
sentence does not apply if section
401(a)(9)(H) does not apply with respect
to the employee (for example, if both the
employee and the employee’s
designated beneficiary died before
January 1, 2020). See § 1.401(a)(9)–1(b)
for rules relating to the section
401(a)(9)(H) effective date.
(2) 10-year limit for designated
beneficiary who is not an eligible
designated beneficiary. If the
employee’s designated beneficiary is not
an eligible designated beneficiary (as
determined in accordance with
§ 1.401(a)(9)–4(e)), then the calendar
year described in this paragraph (e)(2) is
the calendar year that includes the tenth
anniversary of the date of the
employee’s death.
(3) 10-year limit following death of
eligible designated beneficiary. If the
employee’s designated beneficiary is an
eligible designated beneficiary (as
determined in accordance with
§ 1.401(a)(9)–4(e)), then the calendar
year described in this paragraph (e)(3) is
the calendar year that includes the tenth
anniversary of the date of the designated
beneficiary’s death.
(4) 10-year limit after minor child of
the employee reaches age of majority. If
the employee’s designated beneficiary is
an eligible designated beneficiary only
because the beneficiary is the child of
the employee who has not reached the
age of majority at the time of the
employee’s death, then the calendar

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year described in this paragraph (e)(4) is
the calendar year that includes the tenth
anniversary of the date the designated
beneficiary reaches the age of majority.
(f) Rules for multiple designated
beneficiaries—(1) Determination of
applicable denominator—(i) General
rule. Except as otherwise provided in
paragraph (f)(1)(ii) of this section and
§ 1.401(a)(9)–8(a), if the employee has
more than one designated beneficiary,
then the determination of the applicable
denominator under paragraph (d) of this
section is made using the oldest
designated beneficiary of the employee.
(ii) Applicable multi-beneficiary
trusts. If an employee’s beneficiary is an
applicable multi-beneficiary trust
described in § 1.401(a)(9)–4(g)(1), then
only the trust beneficiaries described in
§ 1.401(a)(9)–4(g)(1)(ii) are taken into
account in determining the oldest
designated beneficiary for purposes of
paragraph (f)(1)(i) of this section.
(2) Determination of when entire
interest is required to be distributed—(i)
General rule. Except as otherwise
provided in paragraphs (f)(2)(ii) and (iii)
of this section and § 1.401(a)(9)–8(a), if
an employee has more than one
designated beneficiary, then paragraph
(e)(1) of this section is applied with
respect to the oldest of the employee’s
designated beneficiaries.
(ii) Special rule for employee’s minor
child. If any of the employee’s
designated beneficiaries is an eligible
designated beneficiary because that
designated beneficiary is described in
§ 1.401(a)(9)–4(e)(1)(ii) (relating to the
child of the employee who has not
reached the age of majority at the time
of the employee’s death), then—
(A) Paragraph (e)(2) of this section
does not apply;
(B) Paragraph (e)(3) of this section
applies as if the death of the employee’s
eligible designated beneficiary does not
occur until the death of all of the
designated beneficiaries who are
described in § 1.401(a)(9)–4(e)(1)(ii); and
(C) Paragraph (e)(4) of this section
applies as if the attainment of the age of
majority of the employee’s eligible
designated beneficiary described in
§ 1.401(a)(9)–4(e)(1)(ii) does not occur
until the youngest of those eligible
designated beneficiaries reaches the age
of majority.
(iii) Applicable multi-beneficiary
trust. If an employee’s beneficiary is an
applicable multi-beneficiary trust
described in § 1.401(a)(9)–4(g)(1), then
paragraph (e)(3) of this section applies
as if the death of the employee’s eligible
designated beneficiary does not occur
until the death of the last to survive of
the trust beneficiaries who are described
in § 1.401(a)(9)–4(g)(1)(ii).

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(g) Special rules—(1) Treatment of
nonvested amounts. If the employee’s
benefit is in the form of an individual
account under a defined contribution
plan, the benefit used to determine the
required minimum distribution for any
distribution calendar year will be
determined in accordance with
paragraph (a) of this section without
regard to whether or not all of the
employee’s benefit is vested. If, as of the
end of a distribution calendar year (or
as of the employee’s required beginning
date, in the case of the employee’s first
distribution calendar year), the total
amount of the employee’s vested benefit
is less than the required minimum
distribution for the calendar year, only
the vested portion, if any, of the
employee’s benefit is required to be
distributed by the end of the calendar
year (or, if applicable, by the employee’s
required beginning date). However, the
required minimum distribution for the
subsequent calendar year must be
increased by the sum of amounts not
distributed in prior calendar years
because the employee’s vested benefit
was less than the required minimum
distribution determined in accordance
with paragraph (a) of this section.
(2) Distributions taken into account—
(i) General rule. Except as provided in
this paragraph (g)(2), all amounts
distributed from an individual account
under a defined contribution plan are
distributions that are taken into account
in determining whether this section is
satisfied for a calendar year, regardless
of whether the amount is includible in
income. Thus, for example, amounts
that are excluded from income as
recovery of investment in the contract
under section 72 generally are taken
into account for purposes of
determining whether this section is
satisfied for a calendar year. Similarly,
amounts excluded from income as net
unrealized appreciation on employer
securities generally are taken into
account for purposes of satisfying this
section.
(ii) Amounts not eligible for rollover.
An amount is not taken into account in
determining whether this section is
satisfied for a calendar year if that
amount is described in § 1.402(c)–2(c)(3)
(relating to amounts that are not treated
as eligible rollover distributions).
(iii) [Reserved]
(iv) [Reserved]
(3) Surviving spouse election under
section 401(a)(9)(B)(iv)—(i) In general. A
defined contribution plan may include
a provision, applicable to an employee
whose sole beneficiary is that
employee’s surviving spouse, under
which the surviving spouse may elect to
be treated as the employee for purposes

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of determining the required minimum
distribution for a calendar year under
this section.
(ii) [Reserved]
§ 1.401(a)(9)–6 Required minimum
distributions for defined benefit plans and
annuity contracts.

(a) General rules—(1) In general. In
order to satisfy section 401(a)(9), except
as otherwise provided in this section,
distributions of the employee’s entire
interest under a defined benefit plan or
under an annuity contract must be paid
in the form of periodic annuity
payments for the employee’s life (or the
joint lives of the employee and
beneficiary) or over a period certain that
does not exceed the maximum length of
the period certain determined in
accordance with paragraph (c) of this
section. The interval between payments
for the annuity must not exceed one
year and, except as otherwise provided
in this section, must be uniform over the
entire distribution period. Once
payments have commenced over a
period, the period may only be changed
in accordance with paragraph (n) of this
section. Life (or joint and survivor)
annuity payments must satisfy the
minimum distribution incidental benefit
requirements of paragraph (b) of this
section. Except as otherwise provided in
this section (for example, permitted
increases described in paragraph (o) of
this section), all payments (whether
paid over an employee’s life, joint lives,
or a period certain) also must be
nonincreasing.
(2) Definition of life annuity. An
annuity described in this section may be
a life annuity (or joint and survivor
annuity) with a period certain, provided
that the life annuity (or joint and
survivor annuity, if applicable) and the
period certain payments each meet the
requirements of paragraph (a)(1) of this
section. For purposes of this section, if
distributions are permitted to be made
over the lives of the employee and the
designated beneficiary, references to a
life annuity include a joint and survivor
annuity.
(3) Annuity commencement—(i) First
payment and frequency. Annuity
payments must commence on or before
the employee’s required beginning date
(within the meaning of § 1.401(a)(9)–
2(b)). The first payment, which must be
made on or before the employee’s
required beginning date, must be the
payment that is required for one
payment interval. The second payment
need not be made until the end of the
next payment interval even if that
payment interval ends in the next
calendar year. Similarly, if the employee
dies before the required beginning date,

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and distributions are to be made in
accordance with section 401(a)(9)(B)(iii)
(or, if applicable, section
401(a)(9)(B)(iv)), then the first payment,
which must be made on or before the
last day of the calendar year following
the calendar year in which the
employee died (or the date determined
under § 1.401(a)(9)–3(d), if applicable),
must be the payment that is required for
one payment interval. Payment intervals
are the periods for which payments are
received, for example, bimonthly,
monthly, semi-annually, or annually.
All benefit accruals as of the last day of
the first distribution calendar year must
be included in the calculation of the
amount of annuity payments for
payment intervals ending on or after the
employee’s required beginning date.
(ii) Example. A defined benefit plan
(Plan X) provides monthly annuity
payments for the life of unmarried
participants with a 10-year period
certain. An unmarried, retired
participant A in Plan X attains age 73 in
2025. A’s monthly annuity payment
under this single life annuity based on
accruals through December 31, 2025, is
$500. In order to meet the requirements
of this paragraph (a)(3), the first
monthly payment of $500 must be made
on behalf of A on or before April 1,
2026, and monthly payments must
continue to be made thereafter for the
life of A (or over the 10-year period
certain, if longer).
(4) Single-sum distributions—(i) In
general. In the case of a single-sum
distribution of an employee’s entire
accrued benefit during a distribution
calendar year, the portion of the
distribution that is the required
minimum distribution for the
distribution calendar year (and thus not
an eligible rollover distribution
pursuant to section 402(c)(4)(B)) is
determined using the rule in either
paragraph (a)(4)(ii) or (iii) of this
section.
(ii) Treatment as individual account.
The portion of the single-sum
distribution that is a required minimum
distribution is determined by treating
the single-sum-distribution as a
distribution from an individual account
plan and treating the amount of the
single-sum distribution as the
employee’s account balance as of the
end of the relevant valuation calendar
year. If the single-sum distribution is
being made in the calendar year that
includes the required beginning date
and the required minimum distribution
for the employee’s first distribution
calendar year has not been distributed,
the portion of the single-sum
distribution that represents the required
minimum distribution for the

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employee’s first and second distribution
calendar years is not eligible for
rollover.
(iii) Treatment as first annuity
payment. The portion of the single-sum
distribution that is a required minimum
distribution is permitted to be
determined by expressing the
employee’s benefit as an annuity that
would satisfy this section with an
annuity starting date that is the first day
of the distribution calendar year for
which the required minimum
distribution is being determined, and
treating one year of annuity payments as
the required minimum distribution for
that year (and therefore, not an eligible
rollover distribution). If the single-sum
distribution is being made in the
calendar year that includes the required
beginning date, and the required
minimum distribution for the
employee’s first distribution calendar
year has not been made, then the benefit
must be expressed as an annuity with an
annuity starting date that is the first day
of the first distribution calendar year,
and the payments for the first two
distribution calendar years are treated as
required minimum distributions (and
therefore not eligible rollover
distributions).
(5) Death benefits. The rule in
paragraph (a)(1) of this section
prohibiting increasing payments under
an annuity applies to payments made
upon the death of an employee.
However, the payment of an ancillary
death benefit described in this
paragraph (a)(5) may be disregarded in
determining whether annuity payments
are increasing, and it can be excluded in
determining an employee’s entire
interest. A death benefit with respect to
an employee’s benefit is an ancillary
death benefit for purposes of this
paragraph (a) if—
(i) It is not paid as part of the
employee’s accrued benefit or under any
optional form of the employee’s benefit;
and
(ii) The death benefit, together with
any other potential payments with
respect to the employee’s benefit that
may be provided to a survivor, satisfies
the incidental benefit requirement of
§ 1.401–1(b)(1)(i).
(6) Separate treatment of separate
identifiable components. If an
employee’s benefit under a defined
benefit plan or annuity contract consists
of separate identifiable components that
are subject to different distribution
elections, then the rules of this section
may be applied separately to each of
those components.
(7) Additional guidance. Additional
guidance regarding how distributions
under a defined benefit plan must be

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58923

paid in order to satisfy section 401(a)(9)
may be issued by the Commissioner in
revenue rulings, notices, or other
guidance published in the Internal
Revenue Bulletin. See § 601.601(d) of
this chapter.
(b) Application of incidental benefit
requirement—(1) Life annuity for
employee. If the employee’s benefit is
paid in the form of a life annuity for the
life of the employee satisfying section
401(a)(9) without regard to the
minimum distribution incidental benefit
requirement under section 401(a)(9)(G)
(MDIB requirement), then the MDIB
requirement will be satisfied.
(2) Joint and survivor annuity—(i)
Determination of designated
beneficiary. If the employee’s benefit is
paid in the form of a life annuity for the
lives of the employee and a designated
beneficiary, then the designated
beneficiary is determined as of the
annuity starting date.
(ii) Spouse beneficiary. If the
employee’s sole beneficiary is the
employee’s spouse and the distributions
satisfy section 401(a)(9) without regard
to the MDIB requirement, the
distributions to the employee will be
deemed to satisfy the MDIB
requirement. For example, if an
employee’s benefit is being distributed
in the form of a joint and survivor
annuity for the lives of the employee
and the employee’s spouse and the
spouse is the sole beneficiary of the
employee, the amount of the periodic
payment payable to the spouse would
not violate the MDIB requirement if it
were 100 percent of the annuity
payment payable to the employee,
regardless of the difference in the ages
between the employee and the
employee’s spouse.
(iii) Joint and survivor annuity, nonspouse beneficiary. If distributions
commence in the form of a joint and
survivor annuity for the lives of the
employee and a beneficiary other than
the employee’s spouse, and the
employee is the applicable age or older
on the employee’s birthday in the
calendar year that includes the annuity
starting date, then the MDIB
requirement will not be satisfied as of
the date distributions commence unless,
under the distribution option, the
annuity payments satisfy the conditions
of this paragraph (b)(2)(iii). The periodic
annuity payments to the survivor satisfy
this paragraph (b)(2)(iii) only if, at any
time on or after the employee’s required
beginning date, those payments do not
exceed the applicable percentage of the
periodic annuity payment payable to the
employee using the table in this
paragraph (b)(2)(iii). The applicable
percentage is based on the employee/

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section after the expiration of the period
certain.
(4) Deemed satisfaction of incidental
benefit rule. Except in the case of
distributions with respect to an
employee’s benefit that include an
ancillary death benefit described in
paragraph (a)(5) of this section, to the
extent the incidental benefit
requirement of § 1.401–1(b)(1)(i)
requires a distribution, that requirement
is deemed to be satisfied if distributions
satisfy the MDIB requirement of this
paragraph (b). If the employee’s benefits
include an ancillary death benefit
described in paragraph (a)(5) of this
section, the benefits (including the
ancillary death benefit) must be
distributed in accordance with the
incidental benefit requirement
described in § 1.401–1(b)(1)(i) and the
benefits (excluding the ancillary death
TABLE 1 TO PARAGRAPH (b)(2)(iii)
benefit) must also satisfy the MDIB
requirement of this paragraph (b).
Employee/beneficiary age
Applicable
(c) Period certain annuity—(1)
difference
percentage
Distributions commencing during the
10 years or less ........................
100 employee’s life. If the employee is the
11 ..............................................
96 applicable age or older on the
12 ..............................................
93 employee’s birthday in the calendar
13 ..............................................
90
year that includes the annuity starting
14 ..............................................
87
15 ..............................................
84 date, then the period certain is not
16 ..............................................
82 permitted to exceed the applicable
17 ..............................................
79 denominator for the calendar year that
18 ..............................................
77 includes the annuity starting date that
19 ..............................................
75 would apply pursuant to § 1.401(a)(9)–
20 ..............................................
73 5(c) if the plan were a defined
21 ..............................................
72 contribution plan. However, that
22 ..............................................
70 applicable denominator is determined
23 ..............................................
68 taking into account the rules of
24 ..............................................
67
§ 1.401(a)(9)–5(c)(2) (relating to a spouse
25 ..............................................
66
26 ..............................................
64 who is more than 10 years younger than
27 ..............................................
63 the employee) only if the period certain
28 ..............................................
62 is not provided in conjunction with a
29 ..............................................
61 life annuity under paragraph (a)(2) of
30 ..............................................
60 this section. See paragraph (k) of this
31 ..............................................
59 section for the rule for annuity
32 ..............................................
59 payments with an annuity starting date
33 ..............................................
58 that is before the calendar year in which
34 ..............................................
57 the employee attains the applicable age.
35 ..............................................
56
(2) Distributions commencing after
36 ..............................................
56
the
employee’s death. If the employee
37 ..............................................
55
dies
before the required beginning date
38 ..............................................
55
39 ..............................................
54 and annuity distributions commence
40 ..............................................
54 after the death of the employee under
41 ..............................................
53 the life expectancy rule (under section
42 ..............................................
53 401(a)(9)(B)(iii) or (iv)), the period
43 ..............................................
53 certain for any distributions
44 and greater ..........................
52 commencing after death may not exceed
the applicable denominator that would
(3) Period certain and annuity
apply pursuant to § 1.401(a)(9)–5(d)(2)
features. If a distribution form includes
for the calendar year that includes the
a period certain, the amount of the
annuity starting date if the plan were a
annuity payments payable to the
defined contribution plan.
beneficiary need not be reduced during
(d) Use of annuity contract—(1) In
the period certain, but in the case of a
general. A plan will not fail to satisfy
joint and survivor annuity with a period section 401(a)(9) merely because
certain, the amount of the annuity
distributions are made from an annuity
payments payable to the beneficiary
contract purchased from an insurance
must satisfy paragraph (b)(2)(iii) of this
company that is licensed to do business

ddrumheller on DSK120RN23PROD with RULES2

beneficiary age difference, which is
equal to the excess of the age of the
employee over the age of the beneficiary
based on their ages on their birthdays in
the calendar year that includes the
annuity starting date. In the case of an
annuity that provides for increasing
payments, the requirement of this
paragraph (b)(2)(iii) will not be violated
merely because benefit payments to the
beneficiary increase, provided the
increase is determined in the same
manner for the employee and the
beneficiary. See paragraph (k)(2) of this
section for rules regarding the
application of the MDIB requirement in
the case of annuity payments with an
annuity starting date that is before the
calendar year in which an employee
attains the applicable age.

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under the laws of the State in which the
contract is sold, provided that the
payments satisfy the requirements of
this section. Except in the case of a
qualifying longevity annuity contract
(QLAC) described in paragraph (q) of
this section, if the annuity contract is
purchased after the required beginning
date, then the first payment interval
must begin on or before the purchase
date and the payment that is made at the
end of that payment interval is the
amount required for one payment
interval. If the payments actually made
under the annuity contract do not meet
the requirements of this section, the
plan fails to satisfy section 401(a)(9).
See also paragraph (o) of this section
permitting certain increases under
annuity contracts.
(2) Applicability of section
401(a)(9)(H)—(i) Annuity contract
subject to section 401(a)(9)(H). If an
annuity contract is purchased under a
defined contribution plan, or the
annuity contract is otherwise subject to
section 401(a)(9)(H), payments under
that annuity contract cannot extend past
the calendar year described in
§ 1.401(a)(9)–5(e).
(ii) Determination of an eligible
designated beneficiary. If an annuity
contract is described in paragraph
(d)(2)(i) of this section, then the
determination of whether a beneficiary
is an eligible designated beneficiary
under section 401(a)(9)(E)(ii), is made as
of the annuity starting date. For
example, if, as of the annuity starting
date, the employee’s beneficiary under
the contract is the employee’s spouse,
then the spouse is treated as an eligible
designated beneficiary for purposes of
applying the rules of section
401(a)(9)(H) even if the employee and
spouse are subsequently divorced.
(e) Treatment of additional accruals—
(1) General rule. If additional benefits
accrue in a calendar year after the
employee’s first distribution calendar
year, distribution of the amount that
accrues in that later calendar year must
commence in accordance with
paragraph (a) of this section beginning
with the first payment interval ending
in the calendar year following the
calendar year in which that amount
accrues.
(2) Administrative delay. A plan will
not fail to satisfy this section merely
because there is an administrative delay
in the commencement of the
distribution of the additional benefits
accrued in a calendar year, provided
that—
(i) The payment commences no later
than the end of the first calendar year
following the calendar year in which the
additional benefit accrues; and

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Federal Register / Vol. 89, No. 139 / Friday, July 19, 2024 / Rules and Regulations
(ii) The total amount paid during that
first calendar year with respect to those
additional benefits is no less than the
total amount that was required to be
paid during that year under paragraph
(e)(1) of this section.
(f) Treatment of nonvested benefits. In
the case of annuity distributions under
a defined benefit plan, if any portion of
the employee’s benefit is not vested as
of December 31 of a distribution
calendar year, the portion that is not
vested as of that date is treated as not
having accrued for purposes of
determining the required minimum
distribution for that distribution
calendar year. When an additional
portion of the employee’s benefit
becomes vested, that portion will be
treated as an additional accrual. See
paragraph (e) of this section for the rules
for distributing benefits that accrue
under a defined benefit plan after the
employee’s first distribution calendar
year.
(g) Requirement for actuarial
increase—(1) General rule—(i)
Applicability of increase. Except as
otherwise provided in this paragraph
(g), if an employee retires after the
calendar year in which the employee
attains age 701⁄2, then, in order to satisfy
section 401(a)(9)(C)(iii), the employee’s
accrued benefit under a defined benefit
plan must be actuarially increased for
the period (if any) from the start date
described in paragraph (g)(1)(ii) of this
section to the end date described in
paragraph (g)(1)(iii) of this section.
(ii) Start date for actuarial increase.
The start date for the required actuarial
increase is April 1 following the
calendar year in which the employee
attains age 701⁄2 (or January 1, 1997, if
the employee attained 701⁄2 prior to
January 1, 1997).
(iii) End date for actuarial increase.
The end date for the required actuarial
increase is the date on which benefits
commence after retirement in a form
that satisfies paragraphs (a) and (h) of
this section.
(iv) Determination of when employee
attains age 701⁄2. An employee attains
age 701⁄2 as of the date six calendar
months after the 70th anniversary of the
employee’s birth. For example, if the
date of birth of an employee is June 30,
1955, the 70th anniversary of the
employee’s birth is June 30, 2025, and
the employee attains age 701⁄2 in 2025.
However, if the employee’s date of birth
is July 1, 1955, the 70th anniversary of
the employee’s birth is July 1, 2025, and
the employee attains age 701⁄2 in 2026.
(2) Nonapplication to 5-percent
owners. This paragraph (g) does not
apply to an employee if that employee
is a 5-percent owner (as defined in

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section 416) with respect to the plan
year ending in the calendar year in
which the employee attains the
applicable age.
(3) Nonapplication to governmental
plans. The actuarial increase required
under this paragraph (g) does not apply
to a governmental plan (within the
meaning of section 414(d)).
(4) Nonapplication to church plans
and church employees—(i) Church
plans. The actuarial increase required
under this paragraph (g) does not apply
to a church plan. For purposes of this
paragraph (g)(4)—
(A) The term church plan means a
plan maintained by a church (as defined
in section 3121(w)(3)(A)) or a qualified
church-controlled organization (as
defined in section 3121(w)(3)(B)) for its
employees; and
(B) A plan is treated as a church plan
only if at least 85 percent of the
individuals covered by the plan are
employees of a church or a qualified
church-controlled organization.
(ii) Determination of whether an
individual is an employee of a church.
For purposes of this paragraph (g)(4),
the determination of whether an
individual is an employee of a church
or a qualified church-controlled
organization is made in accordance with
the rules of section 414(e)(3)(B) other
than section 414(e)(3)(B)(ii).
(iii) Church employees covered in
other plans. If a plan is not a church
plan within the meaning of paragraph
(g)(4)(i) of this section, then the
actuarial increase required under this
paragraph (g) does not apply to benefits
accrued under the plan by an individual
that are attributable to the service the
individual performs as an employee of
a church or a qualified churchcontrolled organization (including
service performed as an employee
described in section 414(e)(3)(B)(i)).
(h) Amount of actuarial increase—(1)
In general. In order to satisfy section
401(a)(9)(C)(iii), the retirement benefits
payable with respect to an employee as
of the end of the period for which
actuarial increases must be provided as
described in paragraph (g) of this
section must be no less than—
(i) The actuarial equivalent of the
employee’s retirement benefits that
would have been payable as of the start
date described in paragraph (g)(1)(ii) of
this section if benefits had commenced
on that date; plus
(ii) The actuarial equivalent of any
additional benefits accrued after that
date; reduced by
(iii) The actuarial equivalent of any
distributions made with respect to the
employee’s retirement benefits after that
date.

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58925

(2) Actuarial equivalence basis. For
purposes of this paragraph (h), actuarial
equivalence is determined using
reasonable actuarial assumptions. If the
plan is subject to section 411, the plan’s
assumptions must be the same as the
assumptions used for determining
actuarial equivalence for purposes of
satisfying section 411.
(3) Coordination with section 411
actuarial increase. Under section 411, in
order for an employee’s accrued benefit
under a defined benefit plan to be
nonforfeitable, the plan must make an
actuarial adjustment to any portion of
that accrued benefit, the payment of
which is deferred past normal
retirement age. The only exception to
this rule is that, generally, no actuarial
adjustment is required to reflect the
period during which a benefit is
suspended as permitted under section
411(a)(3)(B). The actuarial increase
required under section 401(a)(9)(C)(iii)
for the period (if any) described in
paragraph (g)(1)(i) of this section
generally is the same as, and not in
addition to, the actuarial increase
required for the same period under
section 411 to reflect any delay in the
payment of retirement benefits after
normal retirement age. However, unlike
the actuarial increase required under
section 411, the actuarial increase
required under section 401(a)(9)(C)(iii)
must be provided even during any
period during which an employee’s
benefit has been suspended in
accordance with section 411(a)(3)(B).
(i) [Reserved]
(j) Distributions restricted pursuant to
section 436—(1) General rule. If an
employee’s entire interest is being
distributed in accordance with the 5year rule of section 401(a)(9)(B)(ii), a
plan is not treated as failing to satisfy
section 401(a)(9) merely because of the
application of a payment restriction
under section 436(d), provided that
distributions of the employee’s interest
commence by the end of the calendar
year that includes the fifth anniversary
of the date of the employee’s death and,
after the annuity starting date, those
distributions are paid in a form that is
as accelerated as permitted under
section 436(d), as described in
paragraph (j)(2) or (3) of this section.
(2) Payments restricted under section
436(d)(3). If the payment restriction of
section 436(d)(3) applies at the time
benefits commence under paragraph
(j)(1) of this section, then distributions
are made in a form that is as accelerated
as permitted under section 436(d) if the
benefits are paid in a single-sum
payment equal to the maximum amount
allowed under section 436(d)(3), with
the remainder paid as a life annuity to

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the beneficiary (or over the course of
240 months pursuant to § 1.436–
1(j)(6)(ii) in the case of a beneficiary that
is not an individual), subject to a
requirement that the benefit remaining
is commuted to a single-sum payment
when the section 436(d)(3) payment
restriction ceases to apply (to the extent
that a single-sum payment is permitted
under section 436(d)(1) and (2)).
(3) Payments restricted under section
436(d)(1) or (2). If a plan is subject to the
payment restriction in section 436(d)(1)
or (2) at the time benefits commence
under paragraph (j)(1) of this section,
then distributions are made in a form
that is as accelerated as permitted under
section 436(d) if the benefits are paid in
the form of a life annuity to the
beneficiary (or over the course of 240
months pursuant to § 1.436–1(j)(6)(ii), in
the case of a beneficiary that is not an
individual), subject to a requirement
that the benefit remaining is commuted
to a single-sum payment to the extent
permitted under section 436(d) (for
example, the maximum amount allowed
under section 436(d)(3)) when the
payment restriction under section
436(d)(1) or (2) ceases to apply.
(k) Treatment of early
commencement—(1) General rule.
Generally, the determination of whether
a stream of payments satisfies the
requirements of this section is made as
of the required beginning date.
However, if distributions start prior to
the required beginning date in a
distribution form that is an annuity
under which distributions are made in
accordance with the provisions of
paragraph (a) of this section and are
made over a period permitted under
section 401(a)(9)(A)(ii), then, except as
provided in this paragraph (k), the
annuity starting date will be treated as
the required beginning date for purposes
of applying the rules of this section and
§ 1.401(a)(9)–2. Thus, for example, the
determination of the designated
beneficiary and the amount of
distributions will be made as of the
annuity starting date. Similarly, if the
employee dies after the annuity starting
date but before the required beginning
date determined under § 1.401(a)(9)–
2(b), then after the employee’s death—
(i) The remaining portion of the
employee’s interest must continue to be
distributed in accordance with this
section over the remaining period over
which distributions commenced; and
(ii) The rules in § 1.401(a)(9)–3
relating to death before the required
beginning date do not apply.
(2) Joint and survivor annuity, nonspouse beneficiary—(i) Application of
MDIB requirement. If distributions
commence in the form of a joint and

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survivor annuity for the lives of the
employee and a beneficiary other than
the employee’s spouse, and as of the
employee’s birthday in the calendar
year that includes the annuity starting
date, the employee is younger than the
applicable age, then the MDIB
requirement will not be satisfied as of
the date distributions commence unless,
under the distribution option, the
annuity payments to be made on and
after the employee’s required beginning
date satisfy the conditions of this
paragraph (k)(2). The periodic annuity
payments payable to the survivor satisfy
this paragraph (k)(2) if, at all times on
and after the employee’s annuity
starting date, those payments do not
exceed the applicable percentage of the
periodic annuity payment payable to the
employee determined using the table in
paragraph (b)(2)(iii) of this section (but
based on the adjusted employee/
beneficiary age difference). The adjusted
employee/beneficiary age difference is
determined by first calculating the
employee/beneficiary age difference
under paragraph (b)(2)(iii) of this
section and then reducing that age
difference by the number of years by
which the employee is younger than the
applicable age on the employee’s
birthday in the calendar year that
includes the annuity starting date. In the
case of an annuity that provides for
increasing payments, the requirement of
this paragraph (k)(2) will not fail to be
satisfied merely because benefit
payments to the beneficiary increase,
provided the increase is determined in
the same manner for the employee and
the beneficiary.
(ii) Example—(A) Facts. Distributions
under a defined benefit plan commence
on January 1, 2025, to an employee Z,
born March 1, 1958. Z’s daughter Y,
born February 5, 1989, is Z’s
beneficiary. The distributions are in the
form of a joint and survivor annuity for
the lives of Z and Y with payments of
$500 a month to Z and upon Z’s death
of $500 a month to Y (so that the
monthly payment to Y is 100 percent of
the monthly amount payable to Z).
(B) Analysis and conclusion. Z’s
required beginning date is April 1, 2032
(that is, April 1 of the calendar year
following the calendar year in which Z
will attain age 73). Under paragraph
(k)(1) of this section, because
distributions commence prior to Z’s
required beginning date and are in the
form of a joint and survivor annuity for
the lives of Z and Y, compliance with
the rules of this section is determined as
of the annuity starting date. Under this
paragraph (k)(2), the adjusted employee/
beneficiary age difference is calculated
by taking the excess of the employee’s

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age over the beneficiary’s age and
subtracting the number of years the
employee is younger than the applicable
age (in this case, age 73). In 2025, Z
attains age 67 and Y attains age 36.
Accordingly, the employee/beneficiary
age difference is 31. Because Z is
commencing benefits 6 years before
attaining the applicable age, the
adjusted employee/beneficiary age
difference is 25 years. Under table 1 to
paragraph (b)(2)(iii) of this section, the
applicable percentage for a 25-year
adjusted employee/beneficiary age
difference is 66 percent. The plan does
not satisfy the MDIB requirement
because, as of January 1, 2025 (the
annuity starting date), the distribution
option provides that, as of Z’s required
beginning date, the monthly payment to
Y upon Z’s death will exceed 66 percent
of Z’s monthly payment.
(3) Limitation on period certain. If, as
of the employee’s birthday in the
calendar year that includes the annuity
starting date, the employee is younger
than the applicable age, then the period
certain may not exceed the limitation on
the period certain for an individual who
has attained the applicable age as
specified in paragraph (c)(1) of this
section, increased by the number of
years by which the employee is younger
than the applicable age on that birthday.
(l) Early commencement for surviving
spouse. Generally, the determination of
whether a stream of payments satisfies
the requirements of this section is made
as of the date on which distributions are
required to commence. However, if the
employee dies prior to the required
beginning date, distributions commence
to the surviving spouse of an employee
over a period permitted under section
401(a)(9)(B)(iii)(II) prior to the date on
which distributions are required to
commence, and the distribution form is
an annuity under which distributions
are made in accordance with the
provisions of paragraph (a) of this
section, then the annuity starting date
will be considered the required
beginning date for purposes of section
401(a)(9)(B)(iv)(III). Thus, if the
surviving spouse dies after commencing
benefits and before the date described in
401(a)(9)(B)(iv)(II), then after the
surviving spouse’s death—
(1) The rules in § 1.401(a)(9)–3(e)(1)
relating to the death of the surviving
spouse before the required beginning
date under section 401(a)(9)(B)(iv)(III)
will not apply upon the death of the
surviving spouse; and
(2) The annuity distributions must
continue to be made in accordance with
paragraph (a) of this section over the
remaining period over which
distributions commenced.

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(m) Determination of entire interest
under annuity contract—(1) General
rule. Prior to the date that an annuity
contract under an individual account
plan is annuitized, the interest of an
employee or beneficiary under that
contract is treated as an individual
account for purposes of section
401(a)(9). Thus, the required minimum
distribution for any year with respect to
that interest is determined under
§ 1.401(a)(9)–5 rather than this section.
See § 1.401(a)(9)–5(a)(5) for rules
relating to the satisfaction of section
401(a)(9) in the year that annuity
payments commence (including
situations in which an annuity contract
is purchased with a portion of an
employee’s account balance) and
§ 1.401(a)(9)–5(b)(4) for rules relating to
QLACs (as defined in paragraph (q) of
this section).
(2) Entire interest. For purposes of
applying the rules in § 1.401(a)(9)–5, the
entire interest under the annuity
contract as of December 31 of the
relevant valuation calendar year is
treated as the account balance for the
valuation calendar year described in
§ 1.401(a)(9)–5(c). The entire interest
under an annuity contract is the dollar
amount credited to the employee or
beneficiary under the contract (that is,
the notional account balance) plus the
actuarial present value of any additional
benefits (for example, survivor benefits
in excess of the dollar amount credited
to the employee or beneficiary) that will
be provided under the contract.
However, paragraph (m)(3) of this
section describes certain additional
benefits that may be disregarded in
determining the employee’s entire
interest under the annuity contract. The
actuarial present value of any additional
benefits described under this paragraph
(m) is to be determined using reasonable
actuarial assumptions, including
reasonable assumptions as to future
distributions, and without regard to an
individual’s health.
(3) Exclusions—(i) Additional value
does not exceed 20 percent. The

actuarial present value of any additional
benefits provided under an annuity
contract described in paragraph (m)(2)
of this section may be disregarded if the
sum of the dollar amount credited to the
employee or beneficiary under the
contract and the actuarial present value
of the additional benefits is no more
than 120 percent of the dollar amount
credited to the employee or beneficiary
under the contract and the additional
benefits are one or both of the
following—
(A) Additional benefits that, in the
case of a distribution, are reduced by an
amount sufficient to ensure that the
ratio of the sum to the dollar amount
credited does not increase as a result of
the distribution; and
(B) An additional benefit that is the
right to receive a final payment upon
death that does not exceed the amount
by which the total consideration paid
exceeds the amount of prior
distributions.
(ii) Return of premium death benefit.
If the only additional benefit provided
under the contract is the additional
benefit described in paragraph
(m)(3)(i)(B) of this section, the
additional benefit may be disregarded
regardless of its value in relation to the
dollar amount credited to the employee
or beneficiary under the contract.
(iii) Additional guidance. The
Commissioner, in revenue rulings,
notices, or other guidance published in
the Internal Revenue Bulletin (see
§ 601.601(d) of this chapter), may
provide additional guidance on
additional benefits that may be
disregarded.
(4) Examples. The examples in this
paragraph (m)(4), which use a 5 percent
interest rate and the mortality table used
for distributions subject to section
417(e)(3) provided in Notice 2019–67,
2019–52 IRB 1510, illustrate the
application of the rules in this
paragraph (m):
(i) Example 1—(A) Facts. G is the
owner of a variable annuity contract
(Contract S) under an individual

58927

account plan that has not been
annuitized. Contract S provides a death
benefit until the end of the calendar
year in which the owner attains the age
of 84 equal to the greater of the current
Contract S notional account balance
(dollar amount credited to G under the
contract) and the largest notional
account balance at any previous policy
anniversary reduced proportionally for
subsequent partial distributions (High
Water Mark). Contract S provides a
death benefit in calendar years after the
calendar year in which the owner
attains age 84 equal to the current
notional account balance. Contract S
provides that assets within the contract
may be invested in a Fixed Account at
a guaranteed rate of 2 percent. Contract
S provides no other additional benefits.
(B) Actuarial calculations. At the end
of 2028, when G has an attained age of
78 and 9 months, the notional account
balance of Contract S (after the
distribution for 2028 of 4.55 percent of
the notional account balance as of
December 31, 2027) is $550,000, and the
High Water Mark, before adjustment for
any withdrawals from Contract S in
2028, is $1,000,000. Thus, Contract S
will provide additional benefits (that is,
the death benefits in excess of the
notional account balance) through 2034,
the year S turns 84. The actuarial
present value of these additional
benefits at the end of 2028 is
determined to be $67,978 (12 percent of
the notional account balance). In
making this determination, the
following assumptions are made: on
average, deaths occur mid-year; the
investment return on G’s notional
account balance is 2 percent per annum;
and minimum required distributions
(determined without regard to
additional benefits under the Contract
S) are made at the end of each year. The
following two tables summarize the
actuarial methodology used in
determining the actuarial present value
of the additional benefit.

TABLE 2 TO PARAGRAPH (m)(4)(i)(B)
Death
benefit
during
year

ddrumheller on DSK120RN23PROD with RULES2

Year

2028
2029
2030
2031
2032
2033
2034

.........................................................................................
.........................................................................................
.........................................................................................
.........................................................................................
.........................................................................................
.........................................................................................
.........................................................................................

1 $1,000,000

VerDate Sep<11>2014

$1,000,000
1 954,545
909,306
864,291
819,740
775,430
731,620

End-of-year
notional
account
balance before
withdrawal

Average
notional
account
balance

Withdrawal
at end
of year

............................
2 $561,000
545,633
529,534
512,829
495,365
477,286

....................
3 $555,500
540,283
524,342
507,801
490,509
472,606

....................
4 $26,606
26,482
26,760
27,177
27,438
27,853

death benefit reduced 4.55 percent for withdrawal during 2028.

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E:\FR\FM\19JYR2.SGM

19JYR2

End-of-year
notional
account
balance after
withdrawal
$550,000
534,934
519,151
502,774
485,652
467,927
449,433

58928

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2 Notional

account balance at end of preceding year (after distribution) increased by 2 percent return for year.
of $550,000 notional account balance at end of preceding year (after distribution) and $561,000 notional account balance at end of
current year (before distribution).
4 December 31, 2028 notional account balance (before distribution) divided by uniform lifetime table age 79 factor of 21.1.
3 Average

TABLE 3 TO PARAGRAPH (m)(4)(i)(B)
Year

2028
2029
2030
2031
2032
2033
2034

.................................................................................................................
.................................................................................................................
.................................................................................................................
.................................................................................................................
.................................................................................................................
.................................................................................................................
.................................................................................................................

Survivorship
to start
of year

Interest
discount
to end
of 2028

Mortality
rate during
year

Discounted
additional
benefits
within year

........................
1.00000
.96679
8.93064
.89157
.84953
.80446

........................
.97590
6.92943
.88517
.84302
.80288
.76464

........................
5.03321
.03739
.04198
.04715
.05305
.05979

........................
12,933
7 12,398
11,756
11,055
10,310
9,526

........................

........................

........................

$67,978

5 One-quarter

age 78 rate plus three-quarters age 79 rate.
percent discounted 18 months (1.05(¥1.5)).
age 79/age 80 mortality rate (.03739) multiplied by the $369,023 excess of death benefit over the average notional account balance
($909,306 less $540,283) multiplied by .96679 probability of survivorship to the start of 2030 multiplied by 18-month interest discount of .92943.
8 Survivorship to start of preceding year (.96679) multiplied by probability of survivorship during prior year (1¥.03739).
6 Five

7 Blended

(C) Conclusion. Because Contract S
provides that, in the case of a
distribution, the value of the additional
death benefit (which is the only
additional benefit available under the
contract) is reduced by an amount that
is at least proportional to the reduction
in the notional account balance and, at
age 78 and 9 months, the sum of the
notional account balance (dollar amount
credited to the employee under the
contract) and the actuarial present value

of the additional death benefit is no
more than 120 percent of the notional
account balance, the exclusion under
paragraph (m)(3)(i) of this section
applies for 2029. Therefore, for purposes
of applying the rules in § 1.401(a)(9)–5,
the entire interest under Contract S may
be determined as the notional account
balance (that is, without regard to the
additional death benefit).
(ii) Example 2—(A) Facts. The facts
are the same as in paragraph (m)(4)(i) of

this section (Example 1), except that the
notional account balance is $550,000 at
the end of 2028. In this instance, the
actuarial present value of the death
benefit in excess of the notional account
balance in 2028 is determined to be
$97,273 (24 percent of the notional
account balance). The following two
tables summarize the actuarial
methodology used in determining the
actuarial present value of the additional
benefit.

TABLE 4 TO PARAGRAPH (m)(4)(ii)(A)
Death
benefit
during
year

Year

2028
2029
2030
2031
2032
2033
2034

.........................................................................................
.........................................................................................
.........................................................................................
.........................................................................................
.........................................................................................
.........................................................................................
.........................................................................................

$1,000,000
954,545
909,306
864,291
819,740
775,430
731,620

End-of-year
notional
account
balance before
withdrawal

Average
notional
account
balance

Withdrawal
at end
of year

............................
$408,000
396,824
385,115
372,966
360,265
347,116

....................
$404,000
392,933
381,339
369,310
356,733
343,713

....................
$18,957
19,260
19,462
19,765
19,955
20,257

End-of-year
notional
account
balance after
withdrawal
$400,000
389,043
377,564
365,653
353,201
340,310
326,859

TABLE 5 TO PARAGRAPH (m)(4)(ii)(A)

ddrumheller on DSK120RN23PROD with RULES2

Year

2028
2029
2030
2031
2032
2033
2034

.................................................................................................................
.................................................................................................................
.................................................................................................................
.................................................................................................................
.................................................................................................................
.................................................................................................................
.................................................................................................................

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Survivorship
to start
of year

Interest
discount
to end
of 2028

Mortality
rate during
year

Discounted
additional
benefits
within year

........................
1.00000
.96679
.93064
.89157
.84953
.80446

........................
.97590
.92943
.88517
.84302
.80288
.76464

........................
.03321
.03739
.04198
.04715
.05305
.05979

........................
$17,843
17,349
16,701
15,963
15,150
14,267

........................

........................

........................

$97,273

Sfmt 4700

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19JYR2

ddrumheller on DSK120RN23PROD with RULES2

Federal Register / Vol. 89, No. 139 / Friday, July 19, 2024 / Rules and Regulations
(B) Conclusion. Because the sum of
the notional account balance and the
actuarial present value of the additional
death benefit is more than 120 percent
of the notional account balance, the
exclusion under paragraph (m)(3)(i) of
this section does not apply for 2029.
Therefore, for purposes of applying the
rules in § 1.401(a)(9)–5, the entire
interest under Contract S must include
the actuarial present value of the
additional death benefit.
(n) Change in annuity payment
period—(1) In general. An annuity
payment period may be changed in
accordance with the reannuitization
provisions set forth in paragraph (n)(2)
of this section or in association with an
annuity payment increase described in
paragraph (o) of this section.
(2) Reannuitization. If, in a stream of
annuity payments that otherwise
satisfies section 401(a)(9), the annuity
payment period is changed and the
annuity payments are modified in
association with that change, this
modification will not cause the
distributions to fail to satisfy section
401(a)(9) provided the conditions set
forth in paragraph (n)(3) of this section
are satisfied, and—
(i) The modification occurs at the time
that the employee retires or in
connection with a plan termination;
(ii) The annuity payments prior to
modification are annuity payments paid
over a period certain without life
contingencies; or
(iii) The annuity payments after
modification are paid under a qualified
joint and survivor annuity over the joint
lives of the employee and a designated
beneficiary, the employee’s spouse is
the sole beneficiary, and the
modification occurs in connection with
the employee becoming married to that
spouse.
(3) Conditions. In order to modify a
stream of annuity payments in
accordance with paragraph (n)(2) of this
section, the following conditions must
be satisfied—
(i) The future payments under the
modified stream satisfy section 401(a)(9)
and this section (determined by treating
the date of the change as a new annuity
starting date and the actuarial present
value of the remaining payments prior
to modification as the entire interest of
the participant);
(ii) For purposes of sections 415 and
417, the modification is treated as a new
annuity starting date;
(iii) After taking into account the
modification, the annuity stream
satisfies section 415 (determined at the
original annuity starting date, using the
interest rates and mortality tables
applicable as of that date); and

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19:37 Jul 18, 2024

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(iv) The end point of the period
certain, if any, for any modified
payment period is not later than the end
point available under section 401(a)(9)
to the employee at the original annuity
starting date.
(4) Examples. For the purposes of the
examples in this paragraph (n)(4),
assume that the applicable segment
rates under section 417(e)(3) are 5.00
percent, 5.50 percent, and 6.00 percent,
and the applicable mortality table under
section 417(e)(3) is the mortality table
provided in Notice 2023–73, 2023–45
IRB 232. In addition, assume that the
section 415 limit at age 72 for a straight
life annuity is $306,667 (which is the
lesser of the annual benefit under
section 415(b)(1)(A), as adjusted
pursuant to section 415(d) and further
adjusted for age 72 in accordance with
§ 1.415(b)–1(e)(1)(i), and 100 percent of
the participant’s average compensation
for the participant’s high 3 years):
(i) Example 1—(A) Facts—(1)
Background. Participant D has 10 years
of participation in a frozen defined
benefit plan (Plan W). D is not retired
and elects to receive distributions from
Plan W in the form of a straight life
annuity with annual payments of
$310,000 per year beginning in 2025 at
a date when D has an attained age of 72.
Plan W offers non-retired employees in
pay status the opportunity to modify
their annuity payments due to an
associated change in the payment
period at retirement. Plan W treats the
date of the change in payment period as
a new annuity starting date for purposes
of sections 415 and 417. Thus, for
example, the plan provides a new
qualified and joint survivor annuity
election and obtains spousal consent.
Plan W determines modifications of
annuity payment amounts at retirement
so that the present value of future new
annuity payment amounts (taking into
account the new associated payment
period) is actuarially equivalent to the
present value of future pre-modification
annuity payments (taking into account
the pre-modification annuity payment
period). Actuarial equivalency for this
purpose is determined using the
applicable segment rates under section
417(e)(3)(C) and the applicable mortality
table as of the date of modification.
(2) Payment of retirement benefits to
Participant D. D retires in 2029 at the
age of 76 and, after receiving four
annual payments of $310,000, elects to
receive the remaining distributions from
Plan W in the form of an immediate
final lump sum payment of $2,795,732.
Because payment of retirement benefits
in the form of an immediate final lump
sum payment satisfies (in terms of form)

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58929

section 401(a)(9), the condition under
paragraph (n)(3)(i) of this section is met.
(B) Analysis. Because Plan W treats a
modification of an annuity payment
stream at retirement as a new annuity
starting date for purposes of sections
415 and 417, the condition under
paragraph (n)(3)(ii) of this section is
met. After taking into account the
modification, the annuity stream
determined as of the original annuity
starting date consists of annual
payments beginning at age 72 of
$310,000, $310,000, $310,000, $310,000,
and $2,795,732. This benefit stream is
actuarially equivalent to a straight life
annuity at age 72 of $315,145,
calculated in accordance with section
415(b)(2)(E)(ii), which is an amount less
than the section 415 limit determined at
the original annuity starting date. Thus,
the condition under paragraph (n)(3)(iii)
of this section is met. In addition,
because the modified payment period
does not include a period certain,
paragraph (n)(3)(iv) of this section does
not apply.
(C) Conclusion. Because a stream of
annuity payments in the form of a
straight life annuity satisfies section
401(a)(9), and because each of the
conditions under paragraph (n)(3) of
this section are satisfied, the
modification of annuity payments to D
described in this example meets the
requirements of this paragraph (n).
(ii) Example 2—(A) Facts. The facts
are the same as in paragraph (n)(4)(i) of
this section (Example 1), except that the
straight life annuity payments are paid
at a rate of $330,000 per year and, after
D retires, the lump sum payment at age
76 is $2,976,102. Thus, after taking into
account the modification, the annuity
stream determined as of the original
annuity starting date consists of annual
payments beginning at age 72 of
$330,000, $330,000, $330,000, $330,000,
and $2,976,102.
(B) Conclusion. The benefit stream
described in paragraph (n)(4)(ii)(A) of
this section is actuarially equivalent to
a straight life annuity at age 72 of
$335,477, calculated in accordance with
section 415(b)(2)(E)(ii), which exceeds
the section 415 limit determined at the
original annuity starting date. Thus, the
lump sum payment to D fails to satisfy
the condition under paragraph (n)(3)(iii)
of this section. Therefore, the lump sum
payment to D fails to meet the
requirements of this paragraph (n) and
fails to satisfy the requirements of
section 401(a)(9).
(iii) Example 3—(A) Facts—(1)
Background. Participant E has 10 years
of participation in Plan X, a frozen
defined benefit plan. E retires in 2025 at
a date when E’s attained age is 72. E

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58930

Federal Register / Vol. 89, No. 139 / Friday, July 19, 2024 / Rules and Regulations

elects to receive annual distributions
from Plan X in the form of a 27-year
period certain annuity (that is, a 27-year
annuity payment period without a life
contingency) paid at a rate of $37,000
per year beginning in 2025 with future
payments increasing at a rate of 4.00
percent per year (that is, the 2026
payment will be $38,480, the 2027
payment will be $40,019 and so on).
Plan X offers participants in pay status
whose annuity payments are in the form
of a term-certain annuity the
opportunity to modify their payment
period at any time and treats the
modifications as a new annuity starting
date for the purposes of sections 415
and 417. Thus, for example, the plan
provides a new qualified and joint
survivor annuity election and obtains
spousal consent.
(2) Plan provisions for determination
of actuarial equivalence. Plan X
determines modifications of annuity
payment amounts so that the present
value of future new annuity payment
amounts (taking into account the new
associated payment period) is
actuarially equivalent to the present
value of future pre-modification annuity
payments (taking into account the premodification annuity payment period).
Actuarial equivalency for this purpose
is determined using 5.00 percent and
the applicable mortality table as of the
date of modification.
(3) Modification of retirement benefits
paid to Participant E. In 2028, E, after
receiving annual payments of $37,000,
$38,480, and $40,019, elects to receive
the remaining distributions from Plan W
in the form of a straight life annuity
paid with annual payments of $92,133
per year.
(B) Analysis. Because payment of
retirement benefits in the form of a
straight life annuity satisfies (in terms of
form) section 401(a)(9), the condition
under paragraph (n)(3)(i) of this section
is met. Because Plan X treats a
modification of an annuity payment
stream at retirement as a new annuity
starting date for purposes of sections
415 and 417, the condition under
paragraph (n)(3)(ii) of this section is
met. After taking into account the
modification, the annuity stream
determined as of the original annuity
starting date consists of annual
payments beginning at age 72 of
$37,000, $38,480, and $40,019, and a
straight life annuity beginning at age 75
of $92,133. This benefit stream is
actuarially equivalent to a straight life
annuity at age 72 of $81,924, calculated
in accordance with section
415(b)(2)(E)(i), which is an amount less
than the section 415 limit determined at
the original annuity starting date. Thus,

VerDate Sep<11>2014

19:37 Jul 18, 2024

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the condition under paragraph (n)(3)(iii)
of this section is met. In addition,
because the modified payment period
does not include a period certain,
paragraph (n)(3)(iv) of this section does
not apply.
(C) Conclusion. Because a stream of
annuity payments in the form of a
straight life annuity satisfies section
401(a)(9), and each of the conditions
under paragraph (n)(3) of this section
are satisfied, the modification of annuity
payments to E meets the requirements of
this paragraph (n).
(o) Increase in annuity payments—(1)
General rules. Notwithstanding the
general rule under paragraph (a)(1) of
this section prohibiting increases in
annuity payments, the following
increases in annuity payments are
permitted—
(i) An annual percentage increase that
does not exceed the percentage increase
in an eligible cost-of-living index (as
defined in paragraph (o)(2) of this
section) for a 12-month period ending in
the year during which the increase
occurs or the prior year;
(ii) A percentage increase that occurs
at specified times (for example, at
specified ages) and does not exceed the
cumulative total of annual percentage
increases in an eligible cost-of-living
index (as defined in paragraph (o)(2) of
this section) after the annuity starting
date, or if later, the date of the most
recent percentage increase;
(iii) An increase by a constant
percentage, applied not less frequently
than annually, at a rate that is less than
5 percent per year;
(iv) An increase eliminating some or
all of the reduction in the amount of the
employee’s payments to provide for a
survivor benefit, but only if there is no
longer a survivor benefit because the
beneficiary whose life was being used to
determine the period described in
section 401(a)(9)(A)(ii) over which
payments were being made dies or is no
longer the employee’s beneficiary
pursuant to a qualified domestic
relations order within the meaning of
section 414(p);
(v) An increase to pay increased
benefits that result from a plan
amendment;
(vi) An increase to allow a beneficiary
to convert the survivor portion of a joint
and survivor annuity into a single-sum
distribution upon the employee’s death;
(vii) An increase to the extent
permitted in accordance with paragraph
(o)(3) or (4); or
(viii) An increase resulting from the
resumption of benefits that were
suspended pursuant to section
411(a)(3)(B), 418E, or 432(e)(9).

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(2) Eligible cost of living index—(i) In
general. For purposes of this paragraph
(o), an eligible cost-of-living index
means an index described in paragraph
(o)(2)(ii), (iii), or (iv) of this section.
(ii) Consumer price index. An index is
described in this paragraph (o)(2)(ii) if it
is a consumer price index that is based
on prices of all items (or all items
excluding food and energy) and issued
by the Bureau of Labor Statistics,
including an index for a specific
population (for example, urban
consumers or urban wage earners and
clerical workers) and an index for a
geographic area or areas (for example, a
metropolitan area or State).
(iii) Consumer price index with
banking. An index is described in this
paragraph (o)(2)(iii) if it is a percentage
adjustment based on a cost-of-living
index described in paragraph (o)(2)(ii) of
this section, or a fixed percentage if less.
In any year when the cost-of-living
index is lower than the fixed
percentage, the fixed percentage may be
treated as an increase in an eligible costof-living index, provided it does not
exceed the sum of—
(A) The cost-of-living index for that
year, and
(B) The accumulated excess of the
annual cost-of-living index from each
prior year over the fixed annual
percentage used in that year (reduced by
any amount previously utilized under
this paragraph (o)(2)(iii)(B)).
(iv) Adjustment based on
compensation for position. An index is
described in this paragraph (o)(2)(iv) if
it is a percentage adjustment based on
the increase in compensation for the
position held by the employee at the
time of retirement, and provided under
either—
(A) The terms of a governmental plan
(within the meaning of section 414(d)),
or
(B) The terms of a nongovernmental
plan, as in effect on April 17, 2002.
(3) Additional permitted increases for
annuity contracts purchased from
insurance companies. Payments made
from an annuity contract purchased
from an insurance company will not fail
to satisfy the nonincreasing payment
requirement in paragraph (a)(1) of this
section merely because the payments
are increased in accordance with one or
more of the following—
(i) As a result of dividend payments
or other payments that result from
actuarial gains (within the meaning of
paragraph (o)(5) of this section), but
only if—
(A) Actuarial gain is measured no less
frequently than annually;
(B) The resulting dividend payments
or other payments are either paid no

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later than the year following the year for
which the actuarial experience is
measured or paid in the same form as
the payment of the annuity over the
remaining period of the annuity
(beginning no later than the year
following the year for which the
actuarial experience is measured); and
(C) The issuer of the contract uses
reasonable actuarial methods and
assumptions, as determined in good
faith, when calculating the initial
annuity payments, the issuer’s
experience with respect to those factors,
and the amount of the dividend
payments or other payments;
(ii) As a result of a shortening of the
payment period with respect to the
annuity or a full or partial commutation
of the future annuity payments,
provided that the amount of the
payment pursuant to the commutation
is determined using reasonable actuarial
methods and assumptions, as
determined in good faith by the issuer
of the contract.
(iii) To provide a final payment upon
death that does not exceed the amount
by which the total consideration paid
for the contract exceeds the aggregate
amount of prior distributions under the
contract; or
(iv) To provide a short-term advance
of payments under the annuity, under
which annuity payments that would
otherwise satisfy the requirements of
this section are paid up to one year
before the payments were scheduled to
be made.
(4) Additional permitted increases for
annuity payments from a qualified trust.
Annuity payments made under a
defined benefit plan qualified under
section 401(a) (including payments
under an annuity contract purchased
from an insurance company that
provides the same benefits that would
have been payable under the defined
benefit plan if an annuity contract had
not been purchased, but not an annuity
contract that provides other benefits)
will not fail to satisfy the nonincreasing
payment requirement in paragraph (a)(1)
of this section merely because the
payments are increased in accordance
with one of the following—
(i) As a result of dividend payments
or other payments that result from
actuarial gains (within the meaning of
paragraph (o)(5) of this section), but
only if—
(A) The actuarial gain is measured no
less frequently than annually;
(B) The resulting dividend payments
or other payments are either paid no
later than the year following the year for
which the actuarial experience is
measured or paid in the same form as
the annuity over the remaining period of

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the annuity (beginning no later than the
year following the year for which the
actuarial experience is measured);
(C) The actuarial gain taken into
account is limited to the actuarial gain
from investment experience;
(D) The assumed interest used to
calculate actuarial gains is not less than
3 percent; and
(E) The payments are not increasing
by a constant percentage as described in
paragraph (o)(1)(iii) of this section; or
(ii) To provide a final payment upon
the death of the employee that does not
exceed the excess of the actuarial
present value of the employee’s accrued
benefit (within the meaning of section
411(a)(7)) calculated as of the annuity
starting date using the applicable
interest rate and the applicable
mortality table under section 417(e) (or,
if greater, the total amount of employee
contributions plus interest) over the
total of payments before the death of the
employee.
(5) Actuarial gain defined. For
purposes of this paragraph (o), actuarial
gain means the difference between an
amount determined using the actuarial
assumptions (that is, investment return,
mortality, expense, and other similar
assumptions) used to calculate the
initial payments before adjustment for
any increases and the amount
determined under the actual experience
with respect to those factors. Actuarial
gain also includes differences between
the amount determined using actuarial
assumptions when an annuity was
purchased or commenced, and the
amount determined using actuarial
assumptions used in calculating
payments at the time the actuarial gain
is determined.
(6) Examples. This paragraph (o) is
illustrated by the following examples.
(i) Example 1. Variable annuity—(A)
Facts. A retired participant Z1 in Plan
X, a defined contribution plan, attains
age 72 in 2021. Z1 elects to purchase
Contract Y1 from Insurance Company W
in 2025. Contract Y1 is a single life
annuity contract with a 10-year period
certain. Contract Y1 provides for an
initial annual payment calculated with
an assumed interest rate (AIR) of 3
percent, which is assumed for purposes
of this example to be a reasonable
interest rate selected in good faith.
Subsequent payments are determined by
multiplying the prior year’s payment by
a fraction, the numerator of which is 1
plus the actual return on the separate
account assets underlying Contract Y1
since the preceding payment (which is
reasonably determined in good faith)
and the denominator of which is 1 plus
the AIR during that period.

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58931

(B) Analysis. Under paragraph (o)(3)(i)
of this section, payments made from an
annuity contract purchased from an
insurance company will not fail to
satisfy the nonincreasing payment
requirement on account of payment
increases that result from actuarial gains
(within the meaning of paragraph (o)(5)
of this section), if the conditions set
forth in paragraphs (o)(3)(i)(A) through
(C) of this section are satisfied. The
payment increases under Contract Y1
are the result of actuarial gain within
the meaning of paragraph (o)(5) of this
section because they are the result of the
difference between investment
experience and the 3 percent interest
rate used to calculate the initial
payments under Contract Y1. Contract
Y1 satisfies the requirement of
paragraph (o)(3)(i)(A) of this section
because actuarial gain under Contract
Y1 is measured annually. Contract Y1
satisfies the requirement of paragraph
(o)(3)(i)(B) of this section because the
actuarial gains are paid over the
remaining period of the annuity
beginning in the year following the year
for which the actuarial experience is
measured. Contract Y1 satisfies the
requirement of paragraph (o)(3)(i)(C) of
this section because the issuer of
Contract Y1 used reasonable actuarial
methods and assumptions, as
determined in good faith, when
calculating the initial annuity payments,
the issuer’s experience with respect to
those factors, and the amount of
adjustments under Contract Y1.
(C) Conclusion. Because payments
under Contract Y1 increase only as a
result of actuarial gain, and those
increases satisfy the conditions set forth
in paragraphs (o)(3)(i)(A) through (C) of
this section, those increases are
described in paragraph (o)(3)(i) of this
section and therefore are excepted from
the nonincreasing payment requirement
of paragraph (a)(1) of this section
pursuant to the exception under
paragraph (o)(1)(vii) of this section.
(ii) Example 2. Participating
annuity—(A) Facts. A retired
participant Z2 in Plan X, a defined
contribution plan, attains age 73 in
2025. Z2 elects to purchase Contract Y2
from Insurance Company W in 2025.
Contract Y2 is a participating single life
annuity contract with a 10-year period
certain. Contract Y2 provides for level
annual payments with dividends paid
in a lump sum in the year after the year
for which the actuarial experience is
measured or paid out levelly beginning
in the year after the year for which the
actuarial gain is measured over the
remaining lifetime and period certain
(that is, the period certain ends at the
same time as the original period

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certain). Dividends are determined
annually by the Board of Directors of
Company W based upon a comparison
of actual actuarial experience to
expected actuarial experience in the
past year, with those amounts
determined on a reasonable basis in
good faith. The initial payment was
determined in good faith using
reasonable actuarial assumptions and
methods.
(B) Analysis. Under paragraph (o)(3)(i)
of this section, payments made from an
annuity contract purchased from an
insurance company will not fail to
satisfy the nonincreasing payment
requirement on account of payment
increases that result from actuarial gains
(within the meaning of paragraph (o)(5)
of this section), if the conditions set
forth in paragraphs (o)(3)(i)(A) through
(C) of this section are satisfied. The
payment increases under Contract Y2
are the result of actuarial gain within
the meaning of paragraph (o)(5) of this
section. Contract Y2 satisfies the
requirement of paragraph (o)(3)(i)(A) of
this section because actuarial gain under
Contract Y2 is measured annually.
Contract Y2 satisfies the requirement of
paragraph (o)(3)(i)(B) of this section
because the resulting increases are paid
either in the form of a lump sum or over
the remaining period of the annuity
beginning in the year following the year
for which the actuarial experience is
measured. Contract Y2 satisfies the
requirement of paragraph (o)(3)(i)(C) of
this section because the issuer of
Contract Y2 used reasonable actuarial
methods and assumptions, as
determined in good faith, when
calculating the initial annuity payments,
the issuer’s experience with respect to
those factors, and the amount of
adjustments under Contract Y2.
(C) Conclusion. Because payments
under Contract Y2 increase only as a
result of actuarial gain, and those
increases satisfy the conditions set forth
in paragraphs (o)(3)(i)(A) through (C) of
this section, those increases are
described in paragraph (o)(3)(i) of this
section and therefore are excepted from
the nonincreasing payment requirement
of paragraph (a)(1) of this section
pursuant to the exception under
paragraph (o)(1)(vii) of this section.
(iii) Example 3. Participating annuity
with dividend accumulation—(A) Facts.
The facts are the same as in paragraph
(o)(6)(ii) of this section (Example 2),
except that the annuity provides a
dividend accumulation option under
which Z2 may defer receipt of the
dividends to a time selected by Z2.
(B) Conclusion. Because the dividend
accumulation option permits dividends
to be paid commencing later than the

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end of the year following the year for
which the actuarial experience is
measured, the dividend accumulation
option does not meet the requirements
of paragraph (o)(3)(i)(B) of this section.
Neither does the dividend accumulation
option fit within any of the other
permissible increases described in
paragraph (o)(3) of this section.
Accordingly, payment increases
pursuant to the dividend accumulation
option are not excepted from the
nonincreasing payment requirement of
paragraph (a)(1) of this section pursuant
to the exception under paragraph
(o)(1)(vii) of this section. Thus, Contract
Y2, and consequently any distributions
from the contract, fail to meet the
requirements of this paragraph (o) and
thus to fail to satisfy the requirements
of section 401(a)(9).
(iv) Example 4. Participating annuity
with dividends used to purchase
additional death benefits—(A) Facts.
The facts are the same as in paragraph
(o)(6)(ii) of this section (Example 2),
except that the annuity provides an
option under which actuarial gain under
the contract is used to provide
additional death benefit protection for
Z2.
(B) Conclusion. Because this option
permits payments as a result of actuarial
gain to be paid commencing later than
the end of the year following the year
for which the actuarial experience is
measured, the option does not meet the
requirements of paragraph (o)(3)(i)(B) of
this section. Neither does the option fit
within any of the other permissible
increases described in paragraph (o)(3)
of this section. Accordingly, payment
increases pursuant to the dividend
accumulation option are not excepted
from the nonincreasing payment
requirement of paragraph (a)(1) of this
section pursuant to the exception under
paragraph (o)(1)(vii) of this section.
Thus, Contract Y2, and consequently
any distributions from the contract, fail
to meet the requirements of this
paragraph (o) and thus to fail to satisfy
the requirements of section 401(a)(9).
(p) Payments to children—(1) In
general. Payments under a defined
benefit plan or annuity contract that are
made to an employee’s child until the
child reaches the age of majority as
provided in paragraph (p)(2) of this
section (or dies, if earlier) may be
treated, for purposes of section
401(a)(9), as if the payments under the
defined benefit plan or annuity contract
were made to the surviving spouse to
the extent they become payable to the
surviving spouse upon cessation of the
payments to the child. Thus, when
payments described in this paragraph
(p)(1) become payable to the surviving

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spouse because the child attains the age
of majority, there is not an increase in
benefits under paragraph (a) of this
section. Likewise, the age of the child
receiving the payments described in this
paragraph (p)(1) is not taken into
consideration for purposes of the MDIB
requirement of paragraph (b) of this
section.
(2) Age of majority—(i) General rule.
Except as provided in paragraph
(p)(2)(ii) of this section, the
determination of when an employee’s
child attains the age of majority is made
under the rules of § 1.401(a)(9)–4(e)(3).
(ii) Exception for preexisting plan
terms. A defined benefit plan may apply
a definition of the age of majority other
than the definition in paragraph (p)(2)(i)
of this section, but only if the plan terms
regarding the age of majority—
(A) Were adopted on or before
February 24, 2022; and
(B) Met the requirements of A–15 of
26 CFR 1.401(a)(9)–6 (as it appeared in
the April 1, 2021, edition of 26 CFR part
1).
(q) Qualifying longevity annuity
contract—(1) Definition of qualifying
longevity annuity contract. A qualifying
longevity annuity contract (QLAC) is an
annuity contract described in paragraph
(d) of this section that is purchased from
an insurance company for an employee
and that, in accordance with the rules
of application of paragraph (q)(4) of this
section, satisfies each of the following
requirements—
(i) Premiums for the contract satisfy
the limitations of paragraph (q)(2) of this
section;
(ii) The contract provides that
distributions under the contract must
commence not later than a specified
annuity starting date that is no later
than the first day of the month next
following the 85th anniversary of the
employee’s birth;
(iii) The contract provides that, after
distributions under the contract
commence, those distributions must
satisfy the requirements of this section
(other than the requirement in
paragraph (a)(3) of this section that
annuity payments commence on or
before the required beginning date);
(iv) After the required beginning date,
the contract does not make available any
commutation benefit, cash surrender
right, or other similar feature (other than
a right to rescind the contract within a
period not exceeding 90 days from the
date of purchase);
(v) No benefits are provided under the
contract after the death of the employee
other than the benefits described in
paragraph (q)(3) of this section;
(vi) When the contract is issued (or
December 31, 2016, if later), the contract

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(or a rider or endorsement with respect
to that contract) states that the contract
is intended to be a QLAC; and
(vii) The contract is not a variable
contract under section 817, an indexed
contract, or a similar contract, except to
the extent provided by the
Commissioner in revenue rulings,
notices, or other guidance published in
the Internal Revenue Bulletin (see
§ 601.601(d) of this chapter).
(2) Limitation on premiums—(i) In
general. The premiums paid with
respect to the contract on a date
(premium payment date) satisfy the
limitation of this paragraph (q)(2) if they
do not exceed the dollar limitation of
paragraph (q)(2)(ii) of this section.
(ii) Dollar limitation. The dollar
limitation as of a premium payment
date is an amount by which $200,000
(as adjusted under paragraph
(q)(4)(ii)(A) of this section), exceeds the
sum of—
(A) The premiums paid before that
date with respect to the contract, and
(B) The premiums paid on or before
that date with respect to any other
contract that is intended to be a QLAC
and that is purchased for the employee
under the plan, or any other plan,
annuity, or account described in section
401(a), 403(a), 403(b), or 408 or eligible
governmental plan under section 457(b).
(iii) Exchange of insurance contract
for QLAC. For purposes of this
paragraph (q)(2), if an insurance
contract is exchanged for a contract
intended to be a QLAC, the fair market
value of the exchanged contract will be
treated as a premium paid for the QLAC.
However, if an insurance contract is
surrendered for its cash value, the
surrender extinguishes all benefits and
other characteristics of the contract, and
the cash is used to purchase a QLAC,
then only the cash from the surrendered
contract is treated as a premium paid for
the QLAC.
(3) Payments after death of the
employee—(i) Surviving spouse is sole
beneficiary—(A) Death on or after
annuity starting date. If the employee
dies on or after the annuity starting date
for the contract and the employee’s
surviving spouse is the sole beneficiary
under the contract then, except as
provided in paragraph (q)(3)(iv) of this
section, the only benefit permitted to be
paid after the employee’s death is a life
annuity payable to the surviving spouse
under which the periodic annuity
payment does not exceed 100 percent of
the periodic annuity payment that was
payable to the employee.
(B) Death before annuity starting date.
If the employee dies before the annuity
starting date and the employee’s
surviving spouse is the sole beneficiary

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under the contract, then, except as
provided in paragraph (q)(3)(iv) of this
section, the only benefit permitted to be
paid after the employee’s death is a life
annuity payable to the surviving spouse
under which the periodic annuity
payment does not exceed 100 percent of
the periodic annuity payment that
would have been payable to the
employee as of the date that benefits to
the surviving spouse commence.
However, the annuity is permitted to
exceed 100 percent of the periodic
annuity payment that would have been
payable to the employee to the extent
necessary to satisfy the requirement to
provide a qualified preretirement
survivor annuity (as defined under
section 417(c)(2) of the Code or section
205(e)(2) of the Employee Retirement
Income Security Act of 1974, Pub. L.
93–406, 88 Stat. 829, as amended
(ERISA), pursuant to section
401(a)(11)(A)(ii) of the Code or section
205(a)(2) of ERISA). Any life annuity
payable to the surviving spouse under
this paragraph (q)(3)(i)(B) must
commence no later than the date on
which the annuity payable to the
employee would have commenced
under the contract if the employee had
not died.
(ii) Surviving spouse is not sole
beneficiary—(A) Death on or after
annuity starting date. If the employee
dies on or after the annuity starting date
for the contract and the employee’s
surviving spouse is not the sole
beneficiary under the contract then,
except as provided in paragraph
(q)(3)(iv) of this section, the only benefit
permitted to be paid after the
employee’s death is a life annuity
payable to the designated beneficiary
under which the periodic annuity
payment does not exceed the applicable
percentage (determined under
paragraph (q)(3)(iii) of this section) of
the periodic annuity payment that is
payable to the employee.
(B) Death before annuity starting date.
If the employee dies before the annuity
starting date and the employee’s
surviving spouse is not the sole
beneficiary under the contract, then,
except as provided in paragraph
(q)(3)(iv) of this section, the only benefit
permitted to be paid after the
employee’s death is a life annuity
payable to the designated beneficiary
under which the periodic annuity
payment is not in excess of the
applicable percentage (determined
under paragraph (q)(3)(iii) of this
section) of the periodic annuity
payment that would have been payable
to the employee as of the date that
benefits to the designated beneficiary
commence under this paragraph

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58933

(q)(3)(ii)(B). In any case in which the
employee dies before the annuity
starting date, any life annuity payable to
a designated beneficiary under this
paragraph (q)(3)(ii)(B) must commence
by the last day of the calendar year
following the calendar year of the
employee’s death.
(C) Designated beneficiary who is not
an eligible designated beneficiary.
Benefits paid to a designated beneficiary
under this paragraph (q)(3)(ii) must
satisfy the rules of section 401(a)(9)(H)
and paragraph (d)(2) of this section.
(iii) Applicable percentage—(A)
Contracts without pre-annuity starting
date death benefits. If, as described in
paragraph (q)(3)(iii)(E) of this section,
the contract does not provide for a preannuity starting date non-spousal death
benefit, the applicable percentage is the
percentage described in the table in
paragraph (b)(3) of this section.
(B) Contracts with set beneficiary
designation. If the contract provides for
a set non-spousal beneficiary
designation as described in paragraph
(q)(3)(iii)(F) of this section (and is not a
contract described in paragraph
(q)(3)(iii)(E) of this section), the
applicable percentage is the percentage
described in table 6 to paragraph
(q)(3)(iii)(D).
(C) Contracts providing for return of
premium. If the contract provides for a
return of premium as described in
paragraph (q)(3)(v) of this section, the
applicable percentage is 0.
(D) Applicable percentage table. The
applicable percentage is the percentage
specified in following table for the
adjusted employee/beneficiary age
difference, determined in the same
manner as in paragraph (b)(2)(iii) of this
section.

TABLE 6 TO PARAGRAPH (q)(3)(iii)(D)
Adjusted employee/beneficiary
age difference
2 years or less ..........................
3 ................................................
4 ................................................
5 ................................................
6 ................................................
7 ................................................
8 ................................................
9 ................................................
10 ..............................................
11 ..............................................
12 ..............................................
13 ..............................................
14 ..............................................
15 ..............................................
16 ..............................................
17 ..............................................
18 ..............................................
19 ..............................................
20 ..............................................
21 ..............................................

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Applicable
percentage
100
88
78
70
63
57
52
48
44
41
38
36
34
32
30
28
27
26
25
24

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TABLE 6 TO PARAGRAPH
(q)(3)(iii)(D)—Continued
Adjusted employee/beneficiary
age difference

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22
23
24
25

Applicable
percentage

..............................................
..............................................
..............................................
and greater ..........................

23
22
21
20

(E) No pre-annuity starting date nonspousal death benefit. A contract is
described in this paragraph (q)(3)(iii)(E)
if the contract provides that no benefit
may be paid to a beneficiary other than
the employee’s surviving spouse after
the employee’s death—
(1) In any case in which the employee
dies before the annuity starting date
under the contract; and
(2) In any case in which the employee
selects an annuity starting date that is
earlier than the specified annuity
starting date under the contract and the
employee dies less than 90 days after
making that election.
(F) Contracts permitting set nonspousal beneficiary designation. A
contract provides for a set non-spousal
beneficiary designation as described in
this paragraph (q)(3)(iii)(F) if the
contract provides that, if the beneficiary
under the contract is not the employee’s
surviving spouse, then benefits are
payable to the beneficiary only if the
beneficiary was irrevocably designated
on or before the later of the date of
purchase and the employee’s required
beginning date. A contract does not fail
to be described in the preceding
sentence merely because the surviving
spouse becomes the sole beneficiary
before the annuity starting date. In those
circumstances, the requirements of
paragraph (q)(3)(i) of this section apply
and not the requirements of this
paragraph (q)(3)(iii).
(iv) Calculation of early annuity
payments. For purposes of paragraphs
(q)(3)(i)(B) and (ii)(B) of this section, to
the extent the contract does not provide
an option for the employee to select an
annuity starting date that is earlier than
the date on which the annuity payable
to the employee would have
commenced under the contract if the
employee had not died, the contract
must provide a way to determine the
periodic annuity payment that would
have been payable if the employee were
to have an option to accelerate the
payments and the payments had
commenced to the employee
immediately prior to the date that
benefit payments to the surviving
spouse or designated beneficiary
commence.

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(v) Return of premiums—(A) In
general. In lieu of a life annuity payable
to a designated beneficiary under
paragraph (q)(3)(i) or (ii) of this section,
a QLAC may provide for a benefit to be
paid to a beneficiary after the death of
the employee up to the amount by
which the premium payments made
with respect to the QLAC exceed the
payments already made under the
QLAC.
(B) Payments after death of surviving
spouse. If a QLAC is providing a life
annuity to a surviving spouse (or will
provide a life annuity to a surviving
spouse) under paragraph (q)(3)(i) of this
section, it may also provide for a benefit
payable to a beneficiary after the death
of both the employee and the spouse up
to the amount by which the premium
payments made with respect to the
QLAC exceed the payments already
made under the QLAC.
(C) Timing of return of premium
payment and other rules. A return of
premium payment under this paragraph
(q)(3)(v) must be paid no later than the
end of the calendar year following the
calendar year in which the employee
dies. If the employee’s death is after the
required beginning date, the return of
premium payment is treated as a
required minimum distribution for the
year in which it is paid and is not
eligible for rollover. If the return of
premium payment is paid after the
death of a surviving spouse who is
receiving a life annuity (or after the
death of a surviving spouse who has not
yet commenced receiving a life annuity
after the death of the employee), the
return of premium payment under this
paragraph (q)(3)(v) must be made no
later than the end of the calendar year
following the calendar year in which the
surviving spouse dies. If the surviving
spouse’s death is after the required
beginning date for the surviving spouse,
then the return of premium payment is
treated as a required minimum
distribution for the year in which it is
paid and is not eligible for rollover.
(vi) Multiple beneficiaries. If an
employee has more than one designated
beneficiary under a QLAC, the rules in
§ 1.401(a)(9)–8(a) apply for purposes of
paragraphs (q)(3)(i) and (ii) of this
section.
(vii) Treatment of former spouses—
(A) In general. The payment of survivor
benefits to the employee’s former
spouse under an annuity contract will
not cause the contract to fail to satisfy
the requirements of this paragraph (q)(3)
merely because the divorce between the
employee and that former spouse
occurred after the contract is purchased,
provided that a qualified domestic
relations order described in section

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414(p) (or, to the extent provided in
paragraph (q)(3)(vii)(B) of this section, a
divorce or separation instrument)
satisfying the requirements of paragraph
(q)(3)(vii)(C) of this section has been
issued in connection with the divorce.
(B) [Reserved]
(C) Applicable requirements. This
paragraph (q)(3)(vii)(C) is satisfied if the
qualified domestic relations order (or
divorce or separation instrument) issued
in connection with the divorce—
(1) Provides that the former spouse is
entitled to the survivor benefits under
the contract;
(2) Provides that the former spouse is
treated as a surviving spouse for
purposes of the contract;
(3) Does not modify the treatment of
the former spouse as the beneficiary
under the contract who is entitled to the
survivor benefits; or
(4) Does not modify the treatment of
the former spouse as the measuring life
for the survivor benefits under the
contract.
(4) Rules of application—(i) Rules
relating to premiums—(A) Reliance on
representations. For purposes of the
limitation on premiums described in
paragraph (q)(2) of this section, unless
the plan administrator has actual
knowledge to the contrary, the plan
administrator may rely on an
employee’s representation (made in
writing or such other form as may be
prescribed by the Commissioner) of the
amount of the premiums described in
paragraph (q)(2)(ii)(B) of this section,
but only with respect to premiums that
are not paid under a plan, annuity, or
contract that is maintained by the
employer or an entity that is treated as
a single employer with the employer
under section 414(b), (c), (m), or (o).
(B) Consequences of excess premiums
and correction. If an annuity contract
fails to be a QLAC solely because a
premium for the contract exceeds the
limits under paragraph (q)(2) of this
section, then the contract is not a QLAC
beginning on the date on which the
premium is paid and the value of the
contract may not be disregarded under
§ 1.401(a)(9)–5(b)(4) as of the date on
which the contract ceases to be a QLAC
(unless the excess premium is returned
to the non-QLAC portion of the
employee’s account in accordance with
the next sentence). However, if the
excess premium is returned (either in
cash or in the form of a contract that is
not intended to be a QLAC) to the nonQLAC portion of the employee’s
account by the end of the calendar year
following the calendar year in which the
excess premium was originally paid,
then the contract will not be treated as
exceeding the limits under paragraph

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(q)(2) of this section at any time, and the
value of the contract will not be
included in the employee’s account
balance under § 1.401(a)(9)–5(b)(4). If
the excess premium (including the fair
market value of an annuity contract that
is not intended to be a QLAC, if
applicable) is returned to the non-QLAC
portion of the employee’s account after
the last valuation date for the calendar
year in which the excess premium was
originally paid, then the employee’s
account balance for that calendar year
must be increased to reflect that excess
premium in the same manner as an
employee’s account balance is increased
under § 1.401(a)(9)–7(b) to reflect a
rollover received after the last valuation
date. If the excess premium is returned
to the non-QLAC portion of the
employee’s account as described in
paragraph (q)(4)(ii)(B) of this section, it
will not be treated as a violation of the
requirement in paragraph (q)(1)(iv) of
this section that the contract not provide
a commutation benefit.
(ii) Dollar and age limitations subject
to adjustments—(A) Dollar limitation.
The $200,000 amount under paragraph
(q)(2)(ii) of this section will be adjusted
at the same time and in the same
manner as the limits are adjusted under
section 415(d), except that—
(1) The base period is the calendar
quarter beginning July 1, 2022; and
(2) The amount of any increment to
the limit that is not a multiple of
$10,000 will be rounded to the next
lowest multiple of $10,000.
(B) Age limitation. The maximum age
set forth in paragraph (q)(1)(ii) of this
section may be adjusted to reflect
changes in mortality, with any adjusted
age to be prescribed by the
Commissioner in revenue rulings,
notices, or other guidance published in
the Internal Revenue Bulletin. See
§ 601.601(d) of this chapter.
(C) Prospective application of
adjustments. If a contract fails to be a
QLAC because it does not satisfy the
dollar limitation in paragraph (q)(2)(ii)
of this section or the age limitation in
paragraph (q)(1)(ii) of this section, any
subsequent adjustment that is made
pursuant to this paragraph (q)(4)(ii) will
not cause the contract to become a
QLAC.
(iii) Determination of whether
contract is intended to be a QLAC—(A)
Structural deficiency. If a contract fails
to be a QLAC at any time for a reason
other than an excess premium described
in paragraph (q)(4)(i)(B) of this section,
then, as of the date of purchase, the
contract will not be treated as a QLAC
(for purposes of § 1.401(a)(9)–5(b)(4)) or
as a contract that is intended to be a

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QLAC (for purposes of paragraph (q)(2)
of this section).
(B) Roth IRAs. A contract that is
purchased under a Roth IRA is not
treated as a contract that is intended to
be a QLAC for purposes of applying the
dollar limitation rule in paragraph
(q)(2)(ii) of this section. See A–14(d) of
§ 1.408A–6. If a QLAC is purchased or
held under a plan, annuity, account, or
traditional IRA, and that contract is later
rolled over or converted to a Roth IRA,
the contract is not treated as a contract
that is intended to be a QLAC after the
date of the rollover or conversion. Thus,
premiums paid with respect to the
contract will not be taken into account
under paragraph (q)(2)(ii) of this section
after the date of the rollover or
conversion.
(iv) Certain contract features
permitted for QLACs—(A) Participating
annuity contract. An annuity contract
does not fail to satisfy the requirement
of paragraph (q)(1)(vii) of this section
merely because it provides for the
payment of dividends described in
paragraph (n)(3)(iii) of this section.
(B) Contracts with cost-of-living
adjustments. An annuity contract does
not fail to satisfy the requirement of
paragraph (q)(1)(vii) of this section
merely because it provides for a cost-ofliving adjustment as described in
paragraph (o)(2) of this section.
(v) Group annuity contract
certificates. The requirement under
paragraph (q)(1)(vi) of this section that
the contract state that it is intended to
be a QLAC when issued is satisfied if a
certificate is issued under a group
annuity contract and the certificate,
when issued, states that the employee’s
interest under the group annuity
contract is intended to be a QLAC.
§ 1.401(a)(9)–7

Rollovers and transfers.

(a) Treatment of rollover from
distributing plan. If an amount is
distributed by a plan, then the amount
distributed is still taken into account by
the distributing plan for purposes of
satisfying the requirements of section
401(a)(9), even if part of the distribution
is rolled over into another eligible
retirement plan described in section
402(c)(8). However, an amount that is a
required minimum distribution under
section 401(a)(9) is not eligible to be
rolled over (and is therefore includible
in the taxpayer’s gross income under
section 402). For this purpose, the
amount that constitutes a required
minimum distribution for a calendar
year is determined in accordance with
§ 1.402(c)–2(f) for a distribution to an
employee and § 1.402(c)–2(j) for a
distribution to a beneficiary.

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58935

(b) Treatment of rollover by receiving
plan. If an amount is distributed by one
plan (distributing plan) and is rolled
over to another plan (receiving plan),
the benefit of the employee under the
receiving plan is increased by the
amount rolled over for purposes of
determining the required minimum
distribution for the calendar year
following the calendar year in which the
amount rolled over was distributed. If
the amount rolled over is received after
the last valuation date in the calendar
year under the receiving plan, the
benefit of the employee as of that
valuation date, adjusted in accordance
with § 1.401(a)(9)–5(b), is increased by
the rollover amount valued as of the
date of receipt. In addition, if the
amount rolled over is received in a
different calendar year from the
calendar year in which it is distributed,
the amount rolled over is deemed to
have been received by the receiving
plan on the last day of the calendar year
in which it was distributed.
(c) Treatment of transfer under
transferor plan—(1) Generally not
treated as distribution. In the case of a
transfer of an amount of an employee’s
benefit from one plan (transferor plan)
to another plan (transferee plan), the
transfer is not treated as a distribution
by the transferor plan for purposes of
section 401(a)(9). Instead, the benefit of
the employee under the transferor plan
is decreased by the amount transferred.
However, if any portion of an
employee’s benefit is transferred in a
distribution calendar year with respect
to that employee, in order to satisfy the
requirements of section 401(a)(9), the
transferor plan must determine the
amount of the required minimum
distribution with respect to that
employee for the calendar year of the
transfer using the employee’s benefit
under the transferor plan before the
transfer. Additionally, if any portion of
an employee’s benefit is transferred in
the employee’s second distribution
calendar year, but on or before the
employee’s required beginning date, in
order to satisfy section 401(a)(9), the
transferor plan must determine the
amount of the required minimum
distribution for the employee’s first
distribution calendar year based on the
employee’s benefit under the transferor
plan before the transfer. The transferor
plan may satisfy the minimum
distribution requirement for the
calendar year of the transfer (and the
prior year if applicable) by segregating
the amount that must be distributed
from the employee’s benefit and not
transferring that amount. That amount
may be retained by the transferor plan

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and must be distributed on or before the
date required under section 401(a)(9).
(2) Account balance decreased after
transfer. For purposes of determining
any required minimum distribution for
the calendar year following the calendar
year in which the transfer occurs, in the
case of a transfer after the last valuation
date for the calendar year of the transfer
under the transferor plan, the benefit of
the employee as of that valuation date,
adjusted in accordance with
§ 1.401(a)(9)–5(b), is decreased by the
amount transferred, valued as of the
date of the transfer.
(d) Treatment of transfer under
transferee plan. In the case of a transfer
from a transferor plan to a transferee
plan, the benefit of the employee under
the transferee plan is increased by the
amount transferred in the same manner
as if it were a plan receiving a rollover
contribution under paragraph (b) of this
section.
(e) Treatment of spinoff or merger. For
purposes of determining an employee’s
benefit and required minimum
distribution under section 401(a)(9), a
spinoff, a merger, or a consolidation (as
defined in § 1.414(l)–1(b)) is treated as
a transfer of the benefits of the
employees involved. Consequently, the
benefit and required minimum
distribution with respect to each
employee whose benefits are transferred
will be determined in accordance with
paragraphs (c) and (d) of this section.

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§ 1.401(a)(9)–8

Special rules.

(a) Use of separate accounts—(1)
Separate application of section
401(a)(9) for each beneficiary—(i) In
general. Except as otherwise provided
in this paragraph (a)(1), for calendar
years beginning after the calendar year
in which the employee dies, section
401(a)(9) is applied separately with
respect to the separate interests of each
of the employee’s beneficiaries under
the plan provided that those interests
are held in separate accounts that satisfy
the separate accounting requirements of
paragraphs (a)(2)(i) and (ii) of this
section.
(ii) Separate accounting requirements
not timely satisfied. If the separate
accounts that satisfy the separate
accounting requirements of paragraph
(a)(2) of this section are not established
until after the end of the calendar year
following the calendar year of the
employee’s death, then for distribution
calendar years after those requirements
are satisfied—
(A) The aggregate required
distribution for a distribution calendar
year is determined without regard to the
separate account rule in paragraph
(a)(1)(i) of this section;

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(B) The amount of the aggregate
required distribution determined in
accordance with paragraph (a)(1)(ii)(A)
of this section is allocated among the
beneficiaries based on each respective
beneficiary’s share of the total
remaining balance of the employee’s
interest in the plan; and
(C) The allocated share for each
beneficiary determined under paragraph
(a)(2)(ii)(B) of this section is required to
be distributed to that beneficiary.
(iii) Separate application of section
401(a)(9) for trust beneficiaries—(A)
General prohibition. Except as provided
in paragraph (a)(1)(iii)(B) of this section,
section 401(a)(9) may not be applied
separately to the separate interests of
each of the beneficiaries of a seethrough trust described in § 1.401(a)(9)–
4(f)(1)(i). For purposes of the excise tax
under section 4974, unless the
exception in paragraph (a)(1)(iii)(B) of
this section applies, the trust is the
payee with respect to the required
distribution of the employee’s interest
in the plan.
(B) Exception for certain trusts
divided upon the death of the employee.
Section 401(a)(9) is applied separately
with respect to the separate interests of
the beneficiaries of a see-through trust if
the terms of the trust provide that it is
to be divided immediately upon the
death of the employee, provided that the
requirements in paragraph (a)(1)(iii)(C)
of this section are satisfied. The
preceding sentence applies only if the
separate interests are held in separate
see-through trusts (in which case the
rules of §§ 1.401(a)(9)–4(f) and
1.401(a)(9)–5 will apply separately to
each separate trust).
(C) Immediately divided defined. For
purposes of paragraph (a)(1)(iii)(B) of
this section, a trust is immediately
divided upon the death of the employee
only if, as of the date of death, the trust
is terminated and there is no discretion
as to the extent to which of the separate
trusts post-death distributions
attributable to the employee’s interest in
the plan are allocated. A trust does not
fail to be immediately divided upon the
death of the employee merely because
there are administrative delays between
the date of the employee’s death and the
date on which the trust is divided and
terminated, provided that any amounts
received by the trust during this period
are allocated as if the trust had been
divided on the date of the employee’s
death.
(2) Separate accounting
requirements—(i) Allocation of postdeath distributions required. A separate
accounting satisfies the requirements of
this paragraph (a)(2)(i) only if all postdeath distributions with respect to a

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beneficiary’s interest are allocated to the
separate account of the beneficiary
receiving the distributions.
(ii) Allocation of other items. A
separate accounting satisfies the
requirements of this paragraph (a)(2)(ii)
if all post-death investment gains and
losses, contributions, forfeitures, and
expenses for the period prior to the
establishment of the separate accounts
are allocated on a pro rata basis in a
reasonable and consistent manner
among the separate accounts. The
separate accounting does not fail to
satisfy the requirements of this
paragraph (a)(2)(ii) merely because, in
lieu of a pro rata allocation of
investment gains and losses—
(A) Separate accounts are established
that have separate investments; and
(B) The investment gains and losses
attributable to assets held in each of
those separate accounts are allocated
only to that separate account.
(b) Application of consent
requirements. Section 411(a)(11) and
section 417(e) require employee and
spousal consent to certain distributions
of plan benefits while those benefits are
immediately distributable. If an
employee’s normal retirement age is
later than the employee’s required
beginning date and, therefore, benefits
are still immediately distributable
(within the meaning of § 1.411(a)–
11(c)(4)), distributions must be made to
the employee (or, if applicable, to the
employee’s spouse) in a manner that
satisfies the requirements of section
401(a)(9) even though the employee (or,
if applicable, the employee’s spouse)
fails to consent to the distribution. In
that case, the benefit may be distributed
in the form of a qualified joint and
survivor annuity (QJSA) or in the form
of a qualified preretirement survivor
annuity (QPSA), as applicable, and the
consent requirements of sections
411(a)(11) and 417(e) are deemed to be
satisfied if the plan has made reasonable
efforts to obtain consent from the
employee (or, if applicable, the
employee’s spouse) and if the
distribution otherwise meets the
requirements of section 417. If the
distribution is not required to be in the
form of a QJSA to an employee or a
QPSA to a surviving spouse, the
required minimum distribution amount
may be paid to satisfy section 401(a)(9),
and the consent requirements of
sections 411(a)(11) and 417(e) are
deemed to be satisfied if the plan has
made reasonable efforts to obtain
consent from the employee (or, if
applicable, the employee’s spouse) and
the distribution otherwise meets the
requirements of section 417.

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(c) Definition of spouse. Except as
otherwise provided in paragraph (d)(1)
of this section (in the case of
distributions of a portion of an
employee’s benefit payable to a former
spouse of an employee pursuant to a
qualified domestic relations order), for
purposes of satisfying the requirements
of section 401(a)(9), an individual is the
spouse or surviving spouse of an
employee if the marriage of the
employee and individual is recognized
for Federal tax purposes under the rules
of § 301.7701–18. In the case of
distributions after the death of an
employee, for purposes of section
401(a)(9), the spouse of the employee is
determined as of the date of death of the
employee.
(d) Treatment of QDROs—(1)
Continued treatment of spouse. A
former spouse to whom all or a portion
of the employee’s benefit is payable
pursuant to a qualified domestic
relations order described in section
414(p) (QDRO) is treated as a spouse
(including a surviving spouse) of the
employee for purposes of satisfying the
requirements of section 401(a)(9),
including the minimum distribution
incidental benefit requirement under
section 401(a)(9)(G), regardless of
whether the QDRO specifically provides
that the former spouse is treated as the
spouse for purposes of sections
401(a)(11) and 417.
(2) Separate accounts—(i) In
general—(A) Separate accounts while
the employee is alive. If a QDRO
provides that an employee’s benefit is to
be divided and a portion is to be
allocated to an alternate payee, that
portion will be treated as a separate
account (or segregated share) that
separately must satisfy the requirements
of section 401(a)(9) and may not be
aggregated with other separate accounts
(or segregated shares) of the employee
for purposes of satisfying section
401(a)(9). Except as otherwise provided
in paragraph (f)(2)(ii) of this section,
distribution of a separate account
allocated to an alternate payee pursuant
to a QDRO must be made in accordance
with section 401(a)(9). For example,
distributions of the separate account
will satisfy section 401(a)(9)(A) if
required minimum distributions from
the separate account during the
employee’s lifetime begin no later than
the employee’s required beginning date
and the required minimum distribution
is determined in accordance with
§ 1.401(a)(9)–5 for each distribution
calendar year using an applicable
denominator determined under
§ 1.401(a)(9)–5(c) (determined by
treating the spousal alternate payee as
the employee’s spouse).

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(B) Separate accounts after the death
of the employee. The determination of
whether distributions from the separate
account after the death of the employee
to the alternate payee will be made in
accordance with section 401(a)(9)(B)(i),
or in accordance with section
401(a)(9)(B)(ii) or (iii) and (iv), will
depend on whether distributions have
begun as determined under
§ 1.401(a)(9)–2(a)(3) (which provides, in
general, that distributions are not
treated as having begun until the
employee’s required beginning date
even though payments may actually
have begun before that date). For
example, if the alternate payee dies
before the employee, and if distributions
of the separate account allocated to the
alternate payee pursuant to the QDRO
are to be made to the alternate payee’s
beneficiary, then that beneficiary may
be treated as a designated beneficiary for
purposes of determining the required
minimum distribution from the separate
account after the death of the employee,
provided that the beneficiary of the
alternate payee is an individual who is
a beneficiary under the plan or specified
to or in the plan. Specification in or
pursuant to the QDRO is treated as
specification to the plan.
(ii) Satisfaction of section 401(a)(9)
requirements. Distribution of the
separate account allocated to an
alternate payee pursuant to a QDRO
satisfies the requirements of section
401(a)(9)(A)(ii) if the separate account is
distributed, beginning no later than the
employee’s required beginning date,
over the life of the alternate payee (or
over a period not extending beyond the
life expectancy of the alternate payee).
Also, if, pursuant to § 1.401(a)(9)–
3(b)(4)(iii) or (c)(5)(iii), the plan permits
the employee to elect the distribution
method that will apply upon the death
of the employee, that election is to be
made only by the alternate payee for
purposes of distributing the alternate
payee’s separate account. If the alternate
payee dies after distribution of the
alternate payee’s separate account has
begun (determined under § 1.401(a)(9)–
2(a)(3)) but before the employee dies,
distribution of the remaining portion of
that portion of the benefit allocated to
the alternate payee must be made in
accordance with the rules in
§ 1.401(a)(9)–5(c) or § 1.401(a)(9)–6(a)
for distributions during the life of the
employee. Only after the death of the
employee is the amount of the required
minimum distribution determined in
accordance with the rules in
§ 1.401(a)(9)–5(d) or § 1.401(a)(9)–6(b).
(3) Other situations. If a QDRO does
not provide that an employee’s benefit
is to be divided but provides that a

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58937

portion of an employee’s benefit
(otherwise payable to the employee) is
to be paid to an alternate payee, that
portion is not treated as a separate
account (or segregated share) of the
employee. Instead, that portion is
aggregated with any amount distributed
to the employee and treated as having
been distributed to the employee for
purposes of determining whether
section 401(a)(9) has been satisfied with
respect to that employee.
(e) Application of section 401(a)(9)
pending determination of whether a
domestic relations order is a QDRO is
being made. A plan does not fail to
satisfy the requirements of section
401(a)(9) merely because it fails to
distribute an amount otherwise required
to be distributed by section 401(a)(9)
during the period in which the issue of
whether a domestic relations order is a
QDRO is being determined pursuant to
section 414(p)(7), provided that the
period does not extend beyond the 18month period described in section
414(p)(7)(E). To the extent that a
distribution otherwise required under
section 401(a)(9) is not made during this
period, any segregated amounts, as
defined in section 414(p)(7)(A), are
treated as though the amounts are not
vested during the period and any
distributions with respect to those
amounts must be made under the
relevant rules for nonvested benefits
described in either § 1.401(a)(9)–5(g)(1)
or § 1.401(a)(9)–6(f), as applicable.
(f) Application of section 401(a)(9)
when insurer is in State delinquency
proceedings. A plan does not fail to
satisfy the requirements of section
401(a)(9) merely because an individual’s
distribution from the plan is less than
the amount otherwise required to satisfy
section 401(a)(9) because distributions
were being paid under an annuity
contract issued by a life insurance
company in State insurer delinquency
proceedings and have been reduced or
suspended by reason of those State
proceedings. To the extent that a
distribution otherwise required under
section 401(a)(9) is not made during the
State insurer delinquency proceedings,
that amount and any additional amount
accrued during that period are treated as
though those amounts are not vested
during that period and any distributions
with respect to those amounts must be
made under the relevant rules for
nonvested benefits described in either
§ 1.401(a)(9)–5(g)(1) or § 1.401(a)(9)–6(f),
as applicable.
(g) In-service distributions required to
satisfy section 401(a)(9). A plan does
not fail to qualify as a pension plan
within the meaning of section 401(a)
solely because the plan permits

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distributions to commence to an
employee on or after the employee’s
required beginning date (as determined
in accordance with § 1.401(a)(9)–2(b))
even though the employee has not
retired or attained the normal retirement
age under the plan as of the date on
which the distributions commence. This
rule applies without regard to whether
the employee is a 5-percent owner with
respect to the plan year ending in the
calendar year in which distributions
commence.
(h) TEFRA section 242(b) elections—
(1) In general. Even though the
distribution requirements added by the
Tax Equity and Fiscal Responsibility
Act of 1982, Public Law 97–248, 96 Stat.
324 (1982) (TEFRA), were retroactively
repealed in 1984, the transitional
election rule in section 242(b) of TEFRA
(referred to as a section 242(b)(2)
election in this paragraph (h)) was
preserved. While sections 401(a)(11)
and 417 must be satisfied with respect
to any distribution subject to those
requirements, satisfaction of those
requirements is not considered a
revocation of the section 242(b) election.
(2) Application of section 242(b)
election after transfer—(i) Section
242(b)(2) election made under transferor
plan. If an amount is transferred from
one plan (transferor plan) to another
plan (transferee plan), the amount
transferred may be distributed in
accordance with a section 242(b)(2)
election made under the transferor plan
if the employee did not elect to have the
amount transferred and if the transferee
plan separately accounts for the amount
transferred. However, only the benefit
attributable to the amount transferred,
plus earnings thereon, may be
distributed in accordance with the
section 242(b)(2) election made under
the transferor plan. If the employee
elected to have the amount transferred
or the transferee plan does not
separately account for the amount
transferred, the transfer is treated as a
distribution and rollover of the amount
transferred for purposes of this section.
(ii) Section 242(b)(2) election made
under transferee plan. If an amount is
transferred from one plan to another
plan, the amount transferred may not be
distributed in accordance with a section
242(b)(2) election made under the
transferee plan. If a section 242(b)(2)
election was made under the transferee
plan, the transferee plan must separately
account for the amount transferred. If
the transferee plan does not separately
account for the amount transferred, the
section 242(b)(2) election under the
transferee plan is revoked, and
subsequent distributions by the

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transferee plan must satisfy section
401(a)(9).
(iii) Spinoff, merger, or consolidation
treated as transfer. A spinoff, merger, or
consolidation, as defined in § 1.414(l)–
1(b), is treated as a transfer for purposes
of the section 242(b)(2) election.
(3) Application of section 242(b)
election after rollover. If an amount is
distributed from one plan (distributing
plan) and rolled over into another plan
(receiving plan), the amount rolled over
must be distributed from the receiving
plan in accordance with section
401(a)(9) whether or not the employee
made a section 242(b)(2) election under
the distributing plan. Further, if the
amount rolled over was not distributed
in accordance with the election, the
election under the distributing plan is
revoked and all subsequent
distributions by the distributing plan
must satisfy section 401(a)(9). Finally, if
the employee made a section 242(b)(2)
election under the receiving plan and
the election is still in effect, the
receiving plan must separately account
for the amount rolled over and
distribute that amount in accordance
with section 401(a)(9). If the receiving
plan does not separately account for the
amounts rolled over, any section
242(b)(2) election under the receiving
plan is revoked and subsequent
distributions under the receiving plan
must satisfy section 401(a)(9).
(4) Revocation of section 242(b)
election—(i) In general. A section
242(b)(2) election may be revoked after
the required beginning date under
section 401(a)(9)(C). However, if the
section 242(b)(2) election is revoked
after the required beginning date, and
the total amount of the distributions that
would have been required prior to the
date of the revocation in order to satisfy
section 401(a)(9), but for the section
242(b)(2) election, have not been made,
then—
(A) The catch-up distribution
described in paragraph (h)(4)(ii) of this
section must be made by the end of the
calendar year following the calendar
year in which the revocation occurs;
and
(B) Distributions must continue in
accordance with section 401(a)(9).
(ii) Catch-up distribution. The catchup distribution must be equal to the
total amount not yet distributed that
would have been required to be
distributed to satisfy the requirements of
section 401(a)(9).
■ Par. 4. Amend § 1.401(a)(9)–9 as
follows:
■ a. Amend the title by removing the
phrase ‘‘distribution period’’ and adding
in its place the phrase ‘‘Uniform
Lifetime’’;

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b. Amend paragraph (a) by removing
the phrase ‘‘applicable distribution
period’’ and adding in its place the
phrase ‘‘Uniform Lifetime’’;
■ c. Amend paragraph (c) by removing
the phrase ‘‘distribution period’’ and
adding in its place the phrase
‘‘applicable denominator’’;
■ d. Revise the heading of the second
column of Table 2 to paragraph (c) by
removing the phrase ‘‘Distribution
period’’ and adding in its place the
phrase ‘‘Applicable denominator’’; and
■ e. Revise and republish paragraph
(f)(2).
The revisions and republications read
as follows:
■

§ 1.401(a)(9)–9 Life expectancy and
Uniform Lifetime tables.

*

*
*
*
*
(f) * * *
(2) Application to life expectancies
that may not be recalculated—(i)
Redetermination of initial life
expectancy using current tables. If an
employee died before January 1, 2022,
and, under the rules of § 1.401(a)(9)–5,
the applicable denominator for a
calendar year following the calendar
year of the employee’s death is equal to
a single life expectancy calculated as of
the calendar year of the employee’s
death (or, if applicable, the following
calendar year), reduced by 1 for each
subsequent year, then that life
expectancy is reset as provided in
paragraph (f)(2)(ii) of this section.
Similarly, if an employee’s sole
beneficiary is the employee’s surviving
spouse, and the spouse dies before
January 1, 2022, then the spouse’s life
expectancy for the calendar year of the
spouse’s death (which is used to
determine the applicable denominator
for later years) is reset as provided in
paragraph (f)(2)(ii) of this section.
(ii) Determination of applicable
denominator—(A) Applicable
denominator based on new life
expectancy. With respect to a life
expectancy described in paragraph
(f)(2)(i) of this section, the applicable
denominator for a distribution calendar
year beginning on or after January 1,
2022, is determined by using the Single
Life Table in paragraph (b) of this
section to determine the initial life
expectancy for the age of the relevant
individual in the relevant calendar year
and then reducing the resulting
applicable denominator by 1 for each
subsequent year.
(B) Example of redetermination.
Assume that an employee died at age 80
in 2019 and the employee’s designated
beneficiary (who was not the
employee’s spouse) was age 75 in the
year of the employee’s death. For 2020,

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the denominator that would have
applied for the beneficiary was 12.7
years (the life expectancy for a 76-yearold under the Single Life Table in
formerly applicable § 1.401(a)(9)–9), and
for 2021, it would have been 11.7 years
(the original life expectancy, reduced by
1 year). For 2022, if the designated
beneficiary is still alive, then the
applicable denominator would be 12.1
years (the 14.1-year life expectancy for
a 76-year-old under the Single Life
Table in paragraph (b) of this section,
reduced by 2 years).
■ Par. 5. Revise and republish
§ 1.402(c)–2 to read as follows:

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§ 1.402(c)–2

Eligible rollover distributions.

(a) Overview of rollover and related
statutory provisions—(1) General rule—
(i) Rollover of distribution paid to
employee. Under section 402(c), any
portion of a distribution paid to an
employee from a qualified plan that is
an eligible rollover distribution
described in section 402(c)(4) may be
rolled over to an eligible retirement plan
described in section 402(c)(8)(B). See
paragraph (j) of this section for rules
relating to distributions paid to a
surviving spouse or a non-spousal
beneficiary.
(ii) Exclusion from income. Except as
otherwise provided in this section, if an
eligible rollover distribution is paid to
an employee, then the amount
distributed is not currently includible in
gross income, provided that it is
contributed to an eligible retirement
plan no later than the 60th day
following the day on which the
employee received the distribution.
However, if all or any portion of the
amount distributed (including any
amount withheld as income tax under
section 3405(c)) is not contributed as a
rollover, it is included in the employee’s
gross income to the extent required
under section 402(a), and also may be
subject to the 10-percent additional
income tax under section 72(t).
(iii) Definition of eligible retirement
plan—(A) In general. An eligible
retirement plan means an IRA described
in paragraph (a)(1)(iii)(B)(1) of this
section or a qualified plan described in
paragraph (a)(1)(iii)(B)(2) of this section.
In addition, an eligible deferred
compensation plan described in section
457(b) that is maintained by an
employer described in section
457(e)(1)(A) is treated as an eligible
retirement plan, but only if the plan
separately accounts for the amount of
the rollover.
(B) Definitions of IRA and qualified
plan. For purposes of section 402(c) and
this section—

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(1) An IRA is an individual retirement
account described in section 408(a) or
an individual retirement annuity (other
than an endowment contract) described
in section 408(b); and
(2) A qualified plan is an employees’
trust described in section 401(a) that is
exempt from tax under section 501(a),
an annuity plan described in section
403(a), or an annuity contract described
in section 403(b).
(iv) Multiple distributions. If more
than one distribution is received by an
employee from a qualified plan during
a taxable year, the 60-day deadline
applies separately to each distribution.
Because the amount withheld as income
tax under section 3405(c) is considered
an amount distributed under section
402(c), an amount equal to all or any
portion of the amount withheld may be
contributed as a rollover to an eligible
retirement plan within the 60-day
period in addition to the net amount of
the eligible rollover distribution actually
received by the employee.
(v) Definition of rollover. For purposes
of section 402(c) and this section, a
rollover is—
(A) A direct rollover as described in
§ 1.401(a)(31)–1, Q&A–3;
(B) A contribution of an eligible
rollover distribution to an eligible
retirement plan that, except as provided
in paragraph (b)(2) of this section,
satisfies the time period requirement in
paragraph (a)(1)(ii) of this section and
the designation requirement described
in paragraph (k)(1) of this section; or
(C) A repayment of a distribution that
is treated as a rollover, as described in
paragraph (a)(1)(vi) of this section.
(vi) Certain repayments treated as
rollovers. The repayment of a
distribution is treated as a rollover if
that treatment is prescribed under
another statutory provision. For
example, the repayment of a qualified
disaster recovery distribution under
section 72(t)(11)(C) is treated as a
rollover for purposes of this section.
(2) Related Internal Revenue Code
provisions—(i) Direct rollover option.
Section 401(a)(31) requires qualified
plans to provide a distributee of an
eligible rollover distribution the option
to elect to have the distribution paid
directly to an eligible retirement plan in
a direct rollover. See § 1.401(a)(31)–1 for
further guidance concerning this direct
rollover option.
(ii) Notice requirement. Section 402(f)
requires the plan administrator of a
qualified plan to provide, within a
reasonable time before making an
eligible rollover distribution, a written
explanation to the distributee of the
distributee’s right to elect a direct
rollover and the withholding

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58939

consequences of not making that
election. The explanation also is
required to provide certain other
relevant information relating to the
taxation of distributions. See § 1.402(f)–
1 for guidance concerning the written
explanation required under section
402(f).
(iii) Mandatory income tax
withholding. If a distributee of an
eligible rollover distribution does not
elect to have the eligible rollover
distribution paid directly from the plan
to an eligible retirement plan in a direct
rollover under section 401(a)(31), the
eligible rollover distribution is subject
to mandatory income tax withholding
under section 3405(c). See § 31.3405(c)–
1 of this chapter for provisions relating
to the withholding requirements
applicable to eligible rollover
distributions.
(iv) Section 403(b) annuities. See
§ 1.403(b)–7(b) for guidance concerning
the direct rollover requirements for
distributions from annuities described
in section 403(b).
(3) Applicability date—(i) In general.
The rules provided in this section apply
to any distribution made on or after
January 1, 2025.
(ii) Distributions prior to January 1,
2025. For any distribution made before
January 1, 2025, the rules of 26 CFR
1.402(c)–2 and 26 CFR 1.402(c)–3 (as
they appeared in the April 1, 2023,
edition of 26 CFR part 1) apply.
Alternatively, the rules provided in this
section may be applied to those
distributions.
(b) Special rules—(1) Rules related to
Roth accounts—(i) Treatment of Roth
conversions. If all or any portion of an
eligible rollover distribution that is
rolled over to a Roth IRA is not from a
designated Roth account described in
section 402A, then the amount rolled
over to the Roth IRA is included in the
employee’s gross income to the extent
required under section 402(a). However,
the amount rolled over to a Roth IRA
generally is not subject to the 10-percent
additional income tax under section
72(t).
(ii) Treatment of distributions from
designated Roth accounts. A
distribution from a designated Roth
account may be rolled over only to
another designated Roth account or to a
Roth IRA. See § 1.402A–1, Q&A–5 for
rules that apply to such a rollover.
(2) Extensions of and exceptions to
60-day deadline—(i) Waiver of 60-day
deadline. The Commissioner may waive
the 60-day deadline described in
paragraph (a)(1)(ii) of this section if the
failure to waive that requirement would
be against equity or good conscience,
including casualty, disaster, or other

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events beyond the reasonable control of
the individual with respect to such
requirement. See section 402(c)(3)(B).
(ii) Frozen deposits. The 60-day
period described in paragraph (a)(1)(ii)
of this section does not include any
period during which the amount
transferred to the employee is a frozen
deposit described in section
402(c)(7)(B). The 60-day period also
does not end earlier than 10 days after
that amount ceases to be a frozen
deposit.
(iii) Exception for qualified plan loan
offsets. See paragraph (g) of this section
for the timing requirements related to
the rollover of a qualified plan loan
offset amount.
(iv) Other distributions treated as
rollovers. In the case of a repayment of
a distribution treated as a rollover as
described in paragraph (a)(1)(vi) of this
section, see the applicable statutory
provision and accompanying
regulations, if any, for the timing
requirements relating to the repayment.
(3) Special rules for distribution that
includes basis—(i) Rollover of basis to
IRA. If an eligible rollover distribution
includes some or all of an employee’s
basis (that is, the employee’s investment
in the contract), then the portion of the
distribution that is allocable to the
employee’s basis may be rolled over to
an IRA.
(ii) Rollover of basis to qualified trust
must be done through direct trustee-totrustee transfer. If an eligible rollover
distribution includes some or all of an
employee’s basis, then the portion of an
eligible rollover distribution that is
allocable to the employee’s basis may be
rolled over to a qualified plan only
through a direct trustee-to-trustee
transfer. In that case, the qualified trust
or annuity contract must provide for
separate accounting of the amount
transferred (and earnings on that
amount) including separately
accounting for the portion of the
distribution that includes an employee’s
basis and the portion of the distribution
that does not include basis.
(iii) Rollover of basis to section 457(b)
plans not permitted. The portion of an
eligible rollover distribution that is
allocable to an employee’s basis may not
be rolled over to an eligible deferred
compensation plan described in section
457(b).
(iv) Rollover of portion of distribution.
If an eligible rollover distribution
includes some or all of an employee’s
basis and less than the entire
distribution is being rolled over, then
the amount rolled over is treated as
consisting first of the portion of the
distribution that is not allocable to the
employee’s basis.

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(4) Special rules for distributions that
include property—(i) In general. Except
as provided in paragraph (b)(4)(ii) of
this section, if an eligible rollover
distribution consists of property other
than money, then, only that property
may be rolled over to an eligible
retirement plan.
(ii) Rollover of proceeds permitted. In
the case of an eligible rollover
distribution that consists of property
other than money, the proceeds of the
sale of that property may be rolled over
to an eligible retirement plan. However,
to the extent those proceeds exceed the
property’s fair market value at the time
of the sale, that excess may not be rolled
over. See section 402(c)(6)(C) and (D) for
other rules relating to the sale of
distributed property.
(c) Definition of eligible rollover
distribution—(1) General rule. Unless
specifically excluded, an eligible
rollover distribution means any
distribution to an employee of all or any
portion of the balance to the credit of
the employee in a qualified plan. Thus,
except as specifically provided in
paragraph (c)(2) or (3) of this section,
any amount distributed to an employee
from a qualified plan is an eligible
rollover distribution, regardless of
whether it is a distribution of a benefit
that is protected under section
411(d)(6).
(2) Exceptions. An eligible rollover
distribution does not include the
following:
(i) Any distribution that is one of a
series of substantially equal periodic
payments made (not less frequently than
annually) over any one of the following
periods—
(A) The life of the employee (or the
joint lives of the employee and the
employee’s designated beneficiary);
(B) The life expectancy of the
employee (or the joint life and last
survivor expectancy of the employee
and the employee’s designated
beneficiary); or
(C) A specified period of ten years or
more;
(ii) Any distribution to the extent the
distribution is a required minimum
distribution under section 401(a)(9); or
(iii) Any distribution that is made on
account of hardship.
(3) Other amounts not treated as
eligible rollover distributions. The
following amounts are not treated as
eligible rollover distributions:
(i) Elective deferrals (as defined in
section 402(g)(3)) and employee
contributions that, pursuant to rules
prescribed by the Commissioner in
revenue rulings, notices, or other
guidance published in the Internal
Revenue Bulletin (see § 601.601(d) of

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this chapter), are returned to the
employee (together with the income
allocable thereto) in order to comply
with the section 415 limitations;
(ii) Corrective distributions of excess
deferrals as described in § 1.402(g)–
1(e)(3), together with the income
allocable to these corrective
distributions;
(iii) Corrective distributions of excess
contributions under a qualified cash or
deferred arrangement described in
§ 1.401(k)–2(b)(2) and excess aggregate
contributions described in § 1.401(m)–
2(b)(2), together with the income
allocable to these distributions;
(iv) Loans that are treated as deemed
distributions pursuant to section 72(p);
(v) Subject to the rules of paragraph
(c)(4) of this section, dividends paid on
employer securities as described in
section 404(k);
(vi) The costs of life insurance
coverage includible in the employee’s
income under section 72(m)(3)(B);
(vii) Prohibited allocations that are
treated as deemed distributions
pursuant to section 409(p);
(viii) Distributions that are
permissible withdrawals from an
eligible automatic contribution
arrangement within the meaning of
section 414(w);
(ix) Distributions of premiums for
accident or health insurance under
§ 1.402(a)–1(e)(1)(i) (other than
distributions subject to section 402(l), as
described in § 1.402(a)–1(e)(3));
(x) Amounts treated as distributed as
a result of the purchase of a collectible
pursuant to section 408(m); and
(xi) Similar items designated by the
Commissioner in revenue rulings,
notices, and other guidance published
in the Internal Revenue Bulletin. See
§ 601.601(d) of this chapter.
(4) Dividends reinvested in employer
securities. Dividends paid to an
employee stock ownership plan (as
defined in section 4975(e)(7)) that are
reinvested in employer securities
pursuant to a participant election under
section 404(k)(2)(A)(iii)(II) are included
in the participant’s account balance and
lose their character as dividends when
subsequently distributed from the
account. As a result, these amounts are
eligible rollover distributions if they
otherwise meet the requirements of this
paragraph (c).
(d) Determination of substantially
equal periodic payments—(1) General
rule. For purposes of paragraph (c)(2)(i)
of this section, and except as provided
in this paragraph (d) or paragraph (e) of
this section, whether a series of
payments is a series of substantially
equal periodic payments over a
specified period is determined at the

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time payments begin, and by following
the principles of section 72(t)(2)(A)(iv),
without regard to contingencies or
modifications that have not yet
occurred. Thus, for example, a joint and
50-percent survivor annuity will be
treated as a series of substantially equal
periodic payments at the time payments
commence, as will a joint and survivor
annuity that provides for increased
payments to the employee if the
employee’s beneficiary dies before the
employee. Similarly, for purposes of
determining if a disability benefit
payment is part of a series of
substantially equal periodic payments
for a period described in section
402(c)(4)(A), any contingency under
which payments cease upon recovery
from the disability may be disregarded.
(2) Certain supplements disregarded.
For purposes of determining whether a
distribution is one of a series of periodic
payments that are substantially equal,
social security supplements described
in section 411(a)(9) are disregarded. For
example, if a distributee receives a life
annuity of $500 per month, plus a social
security supplement consisting of
payments of $200 per month until the
distributee reaches the age at which
social security benefits of not less than
$200 a month begin, the $200
supplemental payments are disregarded
and, therefore, each monthly payment of
$700 made before the social security age
and each monthly payment of $500
made after the social security age is
treated as one of a series of substantially
equal periodic payments for life. A
series of periodic payments that are not
substantially equal solely because the
amount of each payment is reduced
upon attainment of social security
retirement age (or, alternatively, upon
commencement of social security early
retirement, survivor, or disability
benefits) is also treated as substantially
equal as long as the reduction in the
actual payments is level and does not
exceed the applicable social security
benefit.
(3) Changes in the amount of
payments or the distributee. If the
amount (or, if applicable, the method of
calculating the amount) of the payments
changes so that subsequent payments
are not substantially equal to prior
payments, then a new determination
must be made as to whether the
remaining payments are a series of
substantially equal periodic payments
over a period specified in paragraph
(c)(2)(i) of this section. This
determination is made without taking
into account payments made or the
years of payment that elapsed prior to
the change. However, a new
determination is not made merely

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because, upon the death of the
employee, the employee’s beneficiary
becomes the distributee. Thus, if
distributions commence over a period
that is at least as long as either the first
annuitant’s life or 10 years, then
substantially equal payments to the
survivor are not eligible rollover
distributions even though the payment
period remaining after the death of the
employee is or may be less than the
period described in section 402(c)(4)(A).
For example, substantially equal
periodic payments made under a life
annuity with a five-year term certain
would not be an eligible rollover
distribution even when paid after the
death of the employee with three years
remaining under the term certain.
(4) Defined contribution plans. The
following rules apply in determining
whether a series of payments from a
defined contribution plan constitutes a
series of substantially equal periodic
payments for a period described in
section 402(c)(4)(A)—
(i) Declining balance of years. A series
of payments from an account balance
under a defined contribution plan over
a period is considered a series of
substantially equal periodic payments
over that period if, for each year, the
amount of the distribution is calculated
by dividing the account balance by the
number of years remaining in the
period. For example, a series of
payments is considered substantially
equal payments over 10 years if the
series is determined as follows. In year
1, the annual payment is the account
balance divided by 10; in year 2, the
annual payment is the remaining
account balance divided by 9; and so on
until year 10 when the entire remaining
balance is distributed.
(ii) Reasonable actuarial assumptions.
If an employee’s account balance under
a defined contribution plan is to be
distributed in annual installments of a
specified amount until the account
balance is exhausted, then, for purposes
of determining if the period of
distribution is a period described in
section 402(c)(4)(A), the period of years
over which the installments will be
distributed must be determined using
reasonable actuarial assumptions. For
example, if an employee has an account
balance of $100,000, the employee
elects distributions of $12,000 per year
until the account balance is exhausted,
and the future rate of return is assumed
to be 5 percent per year, the account
balance will be exhausted in
approximately 12 years. Similarly, if the
same employee elects a fixed annual
distribution amount and the fixed
annual amount is less than or equal to
$10,000, it is reasonable to assume that

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58941

the future rate of return will be greater
than 0 percent and, thus, the account
will not be exhausted in less than 10
years.
(e) Determination of whether a
payment is an independent payment—
(1) Definition of independent payments.
Except as provided in paragraphs (e)(2)
and (3) of this section, a payment is
treated as independent of the payments
in a series of substantially equal
payments, and thus not part of the series
described in paragraph (c)(2)(i) of this
section, if the payment is substantially
larger or smaller than the other
payments in the series. An independent
payment is an eligible rollover
distribution if it is not otherwise
excepted from the definition of eligible
rollover distribution. This rule applies
regardless of whether the payment is
made before, with, or after payments in
the series. For example, if an employee
elects a single payment of half of the
account balance with the remainder of
the account balance paid over the life
expectancy of the distributee, the single
payment is treated as independent of
the payments in the series and is an
eligible rollover distribution unless
otherwise excepted. Similarly, if an
employee’s surviving spouse receives a
survivor life annuity of $1,000 per
month plus a single payment on account
of death of $7,500, the single payment
is treated as independent of the
payments in the annuity and is an
eligible rollover distribution unless
otherwise excepted.
(2) Special rules—(i) Administrative
error or delay. If, due solely to
reasonable administrative error or delay
in payment, there is an adjustment after
the annuity starting date to the amount
of any payment in a series of payments
that otherwise would constitute a series
of substantially equal payments
described in section 402(c)(4)(A) and
this section, the adjusted payment or
payments are treated as part of the series
of substantially equal periodic payments
and are not treated as independent of
the payments in the series. For example,
if, due solely to reasonable
administrative delay, the first payment
of a life annuity is delayed by two
months and reflects an additional two
months’ worth of benefits, that payment
is treated as a substantially equal
payment in the series rather than as an
independent payment. The result does
not change merely because the amount
of the adjustment is paid in a separate
supplemental payment.
(ii) Supplemental payments for
annuitants. A supplemental payment
from a defined benefit plan to an
annuitant (that is, a retiree or
beneficiary) is treated as part of a series

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of substantially equal payments, rather
than as an independent payment,
provided that the following conditions
are met—
(A) The supplement is a benefit
increase for annuitants;
(B) The amount of the supplement is
determined in a consistent manner for
all similarly situated annuitants;
(C) The supplement is paid to
annuitants who are otherwise receiving
payments that would constitute
substantially equal periodic payments;
and
(D) The aggregate supplement is less
than or equal to the greater of 10 percent
of the annual rate of payment for the
annuity, or $750.
(iii) Final payment in a series. If a
payment in a series of periodic
payments from an account balance
under a defined contribution plan is
equal to the remaining balance in the
account and is substantially less than
the other payments in the series, the
final payment must nevertheless be
treated as a payment in the series of
substantially equal periodic payments
and may not be treated as an
independent payment if the other
payments in the series are substantially
equal and the payments are for a period
described in section 402(c)(4)(A) based
on the rules provided in paragraph
(d)(4)(ii) of this section. Thus, the final
payment will not be an eligible rollover
distribution.
(3) Additional guidance. The
Commissioner, in revenue rulings,
notices, and other guidance published
in the Internal Revenue Bulletin, may
provide additional rules for determining
what is an independent payment under
paragraph (e)(1) of this section and may
prescribe a higher amount than the $750
amount in paragraph (e)(2)(ii)(D) of this
section. See § 601.601(d) of this chapter.
(f) Determination of whether a
distribution is a required minimum
distribution—(1) Determination for
calendar year of distribution. Except as
provided in paragraphs (f)(2) and (3) of
this section, if a minimum distribution
is required for a calendar year, then the
amounts distributed during that
calendar year are treated as required
minimum distributions under section
401(a)(9) to the extent that the total
minimum distribution required under
section 401(a)(9) for the calendar year
has not been satisfied (and accordingly,
those amounts are not eligible rollover
distributions). For example, if an
employee is required under section
401(a)(9) to receive a minimum
distribution for a calendar year of
$5,000 and the employee receives a total
of $7,200 in that year, the first $5,000
distributed will be treated as the

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required minimum distribution and will
not be an eligible rollover distribution,
and the remaining $2,200 will be an
eligible rollover distribution if it
otherwise qualifies. If the total section
401(a)(9) required minimum
distribution for a calendar year prior to
the calendar year of the distribution is
not distributed in that calendar year (for
example, when the distribution for the
calendar year in which the employee
reaches the applicable age is made on
April 1 of the following calendar year),
then the amount that was required to be
distributed, but not distributed, is added
to the amount required to be distributed
for the next calendar year in
determining the portion of any
distribution in the next calendar year
that is a required minimum distribution
(and, thus, is not an eligible rollover
distribution).
(2) Distribution before first
distribution calendar year. Any amount
that is paid to an employee before
January 1 of the first distribution
calendar year for the employee (as
described in § 1.401(a)(9)–5(a)(2)(ii)) is
not treated as required under section
401(a)(9) and, thus, is an eligible
rollover distribution if it otherwise
qualifies.
(3) Special rule for annuities. In the
case of annuity payments from a defined
benefit plan, or under an annuity
contract purchased from an insurance
company (including a qualified plan
distributed annuity contract (as defined
in paragraph (h) of this section)), the
entire amount of any annuity payment
made on or after January 1 of the first
distribution calendar year for the
employee (as described in § 1.401(a)(9)–
5(a)(2)(ii)) is treated as an amount
required under section 401(a)(9) and,
thus, is not an eligible rollover
distribution.
(g) Treatment of plan loan offset
amounts—(1) General rule. A
distribution of a plan loan offset
amount, as defined in paragraph (g)(3)(i)
of this section (including a qualified
plan loan offset amount, a type of plan
loan offset amount defined in paragraph
(g)(3)(ii) of this section), is an eligible
rollover distribution if it is described in
paragraph (c) of this section. See
§ 1.401(a)(31)–1, Q&A–16, for guidance
concerning the offering of a direct
rollover of a plan loan offset amount.
See also § 31.3405(c)–1, Q&A–11, of this
chapter for guidance concerning special
withholding rules with respect to plan
loan offset amounts.
(2) Rollover period for a plan loan
offset amount—(i) Plan loan offset
amount that is not a qualified plan loan
offset amount. A distribution of a plan
loan offset amount that is an eligible

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rollover distribution and that is not a
qualified plan loan offset amount may
be rolled over by the employee to an
eligible retirement plan within the 60day period set forth in section
402(c)(3)(A), as described in paragraph
(a)(1)(ii) of this section.
(ii) Plan loan offset amount that is a
qualified plan loan offset amount. A
distribution of a plan loan offset amount
that is an eligible rollover distribution
and that is a qualified plan loan offset
amount may be rolled over by the
employee to an eligible retirement plan
within the period set forth in section
402(c)(3)(C), which is the individual’s
tax filing due date (including
extensions) for the taxable year in which
the offset is treated as distributed from
a qualified employer plan.
(3) Definitions—(i) Plan loan offset
amount. For purposes of section 402(c),
a plan loan offset amount is the amount
by which, under the plan terms
governing a plan loan, an employee’s
accrued benefit is reduced (offset) in
order to repay the loan (including the
enforcement of the plan’s security
interest in an employee’s accrued
benefit). A distribution of a plan loan
offset amount can occur in a variety of
circumstances, for example, when the
terms governing a plan loan require that,
in the event of the employee’s
termination of employment or request
for a distribution, the loan be repaid
immediately or treated as in default. A
distribution of a plan loan offset amount
also occurs when, under the terms
governing the plan loan, the loan is
cancelled, accelerated, or treated as if it
were in default (for example, when the
plan treats a loan as in default upon an
employee’s termination of employment
or within a specified period thereafter).
A distribution of a plan loan offset
amount is an actual distribution, not a
deemed distribution under section
72(p).
(ii) Qualified plan loan offset amount.
For purposes of section 402(c), a
qualified plan loan offset amount is a
plan loan offset amount that satisfies the
following requirements:
(A) The plan loan offset amount is
treated as distributed from a qualified
employer plan to an employee or
beneficiary solely by reason of the
termination of the qualified employer
plan, or the failure to meet the
repayment terms of the loan because of
the severance from employment of the
employee; and
(B) The plan loan offset amount
relates to a plan loan that met the
requirements of section 72(p)(2)
immediately prior to the termination of
the qualified employer plan or the

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severance from employment of the
employee, as applicable.
(iii) Qualified employer plan. For
purposes of section 402(c) and this
section, a qualified employer plan is a
qualified employer plan as defined in
section 72(p)(4).
(4) Special rules for qualified plan
loan offset amounts—(i) Definition of
severance from employment. For
purposes of paragraph (g)(3)(ii)(A) of
this section, whether an employee has a
severance from employment with the
employer that maintains the qualified
employer plan is determined in the
same manner as under § 1.401(k)–
1(d)(2). Thus, an employee has a
severance from employment when the
employee ceases to be an employee of
the employer maintaining the plan.
(ii) Offset because of severance from
employment. A plan loan offset amount
is treated as distributed from a qualified
employer plan to an employee or
beneficiary solely by reason of the
failure to meet the repayment terms of
a plan loan because of severance from
employment of the employee if the plan
loan offset:
(A) Relates to a failure to meet the
repayment terms of the plan loan, and
(B) Occurs within the period
beginning on the date of the employee’s
severance from employment and ending
on the first anniversary of that date.
(5) Examples. The following examples
illustrate the rules with respect to plan
loan offset amounts, including qualified
plan loan offset amounts, in this
paragraph (g) and in §§ 1.401(a)(31)–1,
Q&A–16, and 31.3405(c)–1, Q&A–11, of
this chapter. For purposes of these
examples, each reference to a plan refers
to a qualified employer plan as
described in section 72(p)(4).
(i) Example 1—(A) In 2025, Employee
A has an account balance of $10,000 in
Plan Y, of which $3,000 is invested in
a plan loan to Employee A that is
secured by Employee A’s account
balance in Plan Y. Employee A has
made no after-tax employee
contributions to Plan Y. The plan loan
meets the requirements of section
72(p)(2). Plan Y does not provide any
direct rollover option with respect to
plan loans. Employee A severs from
employment on June 15, 2025. After
severance from employment, Plan Y
accelerates the plan loan and provides
Employee A 90 days to repay the
remaining balance of the plan loan.
Employee A, who is under the age set
forth in section 401(a)(9)(C)(i)(I), does
not repay the loan within the 90 days
and instead elects a direct rollover of
Employee A’s entire account balance in
Plan Y. On September 18, 2025 (within
the 12-month period beginning on the

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date that Employee A severed from
employment), Employee A’s
outstanding loan is offset against the
account balance.
(B) In order to satisfy section
401(a)(31), Plan Y must make a direct
rollover by paying $7,000 directly to the
eligible retirement plan chosen by
Employee A. When Employee A’s
account balance was offset by the
amount of the $3,000 unpaid loan
balance, Employee A received a plan
loan offset amount (equivalent to
$3,000) that is an eligible rollover
distribution. However, under
§ 1.401(a)(31)–1, Q&A–16, Plan Y
satisfies section 401(a)(31), even though
a direct rollover option was not
provided with respect to the $3,000 plan
loan offset amount.
(C) No withholding is required under
section 3405(c) on account of the
distribution of the $3,000 plan loan
offset amount because no cash or other
property (other than the plan loan offset
amount) is received by Employee A
from which to satisfy the withholding.
(D) The $3,000 plan loan offset
amount is a qualified plan loan offset
amount within the meaning of
paragraph (g)(3)(ii) of this section.
Accordingly, Employee A may roll over
up to the $3,000 qualified plan loan
offset amount to an eligible retirement
plan within the period that ends on the
employee’s tax filing due date
(including extensions) for the taxable
year in which the offset occurs.
(ii) Example 2—(A) The facts are the
same as in paragraph (g)(5)(i) of this
section (Example 1), except that, rather
than accelerating the plan loan, Plan Y
permits Employee A to continue making
loan installment payments after
severance from employment. Employee
A continues making loan installment
payments until January 1, 2026, at
which time Employee A does not make
the loan installment payment due on
January 1, 2026. In accordance with
§ 1.72(p)–1, Q&A–10, Plan Y allows a
cure period that continues until the last
day of the calendar quarter following
the quarter in which the required
installment payment was due. Employee
A does not make a plan loan installment
payment during the cure period. Plan Y
offsets the unpaid $3,000 loan balance
against Employee A’s account balance
on July 1, 2026 (which is after the 12month period beginning on the date that
Employee A severed from employment).
(B) The conclusion is the same as in
paragraph (g)(5)(i) of this section
(Example 1), except that the $3,000 plan
loan offset amount is not a qualified
plan loan offset amount (because the
offset did not occur within the 12month period beginning on the date that

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58943

Employee A severed from employment).
Accordingly, Employee A may roll over
up to the $3,000 plan loan offset amount
to an eligible retirement plan within the
60-day period provided in section
402(c)(3)(A) (rather than within the
period that ends on Employee A’s tax
filing due date (including extensions)
for the taxable year in which the offset
occurs).
(iii) Example 3—(A) The facts are the
same as in paragraph (g)(5)(i) of this
section (Example 1), except that the
terms governing the plan loan to
Employee A provide that, upon
severance from employment, Employee
A’s account balance is automatically
offset by the amount of any unpaid loan
balance to repay the loan. Employee A
severs from employment but does not
request a distribution from Plan Y.
Nevertheless, pursuant to the terms
governing the plan loan, Employee A’s
account balance is automatically offset
on June 15, 2025, by the amount of the
$3,000 unpaid loan balance.
(B) The $3,000 plan loan offset
amount is a qualified plan loan offset
amount within the meaning of
paragraph (g)(3)(ii) of this section.
Accordingly, Employee A may roll over
up to the $3,000 qualified plan loan
offset amount to an eligible retirement
plan within the period that ends on
Employee A’s tax filing due date
(including extensions) for the taxable
year in which the offset occurs.
(iv) Example 4—(A) The facts are the
same as in paragraph (g)(5)(i) of this
section (Example 1), except that
Employee A elects to receive a cash
distribution of the account balance that
remains after the $3,000 plan loan offset
amount, instead of electing a direct
rollover of the remaining account
balance.
(B) The amount of the distribution
received by Employee A is $10,000
($3,000 relating to the plan loan offset
and $7,000 relating to the cash
distribution). Because the amount of the
$3,000 plan loan offset amount
attributable to the loan is included in
determining the amount of the eligible
rollover distribution to which
withholding applies, withholding in the
amount of $2,000 (20 percent of
$10,000) is required under section
3405(c). The $2,000 is required to be
withheld from the $7,000 to be
distributed to Employee A in cash, so
that Employee A actually receives a
cash amount of $5,000.
(C) The $3,000 plan loan offset
amount is a qualified plan loan offset
amount within the meaning of
paragraph (g)(3)(ii) of this section.
Accordingly, Employee A may roll over
up to the $3,000 qualified plan loan

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Federal Register / Vol. 89, No. 139 / Friday, July 19, 2024 / Rules and Regulations

offset to an eligible retirement plan
within the period that ends on
Employee A’s tax filing due date
(including extensions) for the taxable
year in which the offset occurs. In
addition, Employee A may roll over up
to $7,000 (the portion of the distribution
that is not related to the offset) within
the 60-day period provided in section
402(c)(3).
(v) Example 5—(A) The facts are the
same as in paragraph (g)(5)(iv) of this
section (Example 4), except that the
$7,000 distribution to Employee A after
the offset consists solely of employer
securities within the meaning of section
402(e)(4)(E).
(B) No withholding is required under
section 3405(c) because the distribution
consists solely of the $3,000 plan loan
offset amount and the $7,000
distribution of employer securities. This
is the result because the total amount
required to be withheld does not exceed
the sum of the cash and the fair market
value of other property distributed,
excluding plan loan offset amounts and
employer securities.
(C) Employee A may roll over up to
the $7,000 of employer securities to an
eligible retirement plan within the 60day period provided in section
402(c)(3). The $3,000 plan loan offset
amount is a qualified plan loan offset
amount within the meaning of
paragraph (g)(3)(ii) of this section.
Accordingly, Employee A may roll over
up to the $3,000 qualified plan loan
offset amount to an eligible retirement
plan within the period that ends on
Employee A’s tax filing due date
(including extensions) for the taxable
year in which the offset occurs.
(vi) Example 6—(A) Employee B, who
is age 40, has an account balance in Plan
Z. Plan Z does not provide for after-tax
employee contributions. In 2025,
Employee B receives a loan from Plan Z,
the terms of which satisfy section
72(p)(2). The loan is secured by elective
contributions subject to the distribution
restrictions in section 401(k)(2)(B).
(B) Employee B fails to make an
installment payment due on April 1,
2026, or any other monthly payments
thereafter. In accordance with § 1.72(p)–
1, Q&A–10, Plan Z allows a cure period
that continues until the last day of the
calendar quarter following the quarter in
which the required installment payment
was due (September 30, 2026).
Employee B does not make a plan loan
installment payment during the cure
period. On September 30, 2026,
pursuant to section 72(p)(1), Employee
B is taxed on a deemed distribution
equal to the amount of the unpaid loan
balance. Pursuant to paragraph (c)(3)(iv)

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of this section, the deemed distribution
is not an eligible rollover distribution.
(C) Because Employee B has not
severed from employment or
experienced any other event that
permits the distribution under section
401(k)(2)(B) of the elective contributions
that secure the loan, Plan Z is
prohibited from executing on the loan.
Accordingly, Employee B’s account
balance is not offset by the amount of
the unpaid loan balance at the time of
the deemed distribution. Thus, there is
no distribution of an offset amount that
is an eligible rollover distribution on
September 30, 2026.
(vii) Example 7—(A) The facts are the
same as in paragraph (g)(5)(vi) of this
section (Example 6), except that
Employee B has a severance from
employment on November 1, 2026. On
that date, Employee B’s unpaid loan
balance is offset against the account
balance on distribution.
(B) The plan loan offset amount is not
a qualified plan loan offset amount.
Although the offset occurred within 12
months after Employee B severed from
employment, the plan loan does not
meet the requirement in paragraph
(g)(3)(ii)(B) of this section (that the plan
loan meet the requirements of section
72(p)(2) immediately prior to Employee
B’s severance from employment).
Instead, the loan was taxable on
September 30, 2026 (prior to Employee
B’s severance from employment on
November 1, 2026), because of the
failure to meet the level amortization
requirement in section 72(p)(2)(C).
Accordingly, Employee B may roll over
the plan loan offset amount to an
eligible retirement plan within the 60day period provided in section
402(c)(3)(A) (rather than within the
period that ends on Employee B’s tax
filing due date (including extensions)
for the taxable year in which the offset
occurs).
(h) Qualified plan distributed annuity
contract—(1) Definition of a qualified
plan distributed annuity contract. A
qualified plan distributed annuity
contract is an annuity contract
purchased for a participant, and
distributed to the participant, by a
qualified plan.
(2) Treatment of amounts paid as
eligible rollover distributions. Amounts
paid under a qualified plan distributed
annuity contract are payments of the
balance to the credit of the employee for
purposes of section 402(c) and are
eligible rollover distributions if they
otherwise qualify. Thus, for example, if
the employee surrenders the contract for
a single sum payment of its cash
surrender value, the payment would be
an eligible rollover distribution to the

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extent it is not a required minimum
distribution under section 401(a)(9).
This rule applies even if the annuity
contract is distributed in connection
with a plan termination. See
§ 1.401(a)(31)–1, Q&A–17 and
§ 31.3405(c)–1, Q&A–13 of this chapter
concerning the direct rollover
requirements and 20-percent
withholding requirements, respectively,
that apply to eligible rollover
distributions from such an annuity
contract.
(i) [Reserved]
(j) Treatment of distributions to
beneficiary—(1) Spousal distributee—(i)
In general. Pursuant to section 402(c)(9),
if any distribution attributable to an
employee is paid to the employee’s
surviving spouse, section 402(c) applies
to the distribution in the same manner
as if the spouse were the employee. The
same rule applies if any distribution
attributable to an employee is paid in
accordance with a qualified domestic
relations order (as defined in section
414(p)) (QDRO) to the employee’s
spouse or former spouse who is an
alternate payee. Therefore, a
distribution to the surviving spouse of
an employee (or to a spouse or former
spouse who is an alternate payee under
a QDRO), including a distribution of
ancillary death benefits attributable to
the employee, is an eligible rollover
distribution if it would be described in
paragraph (c) of this section had it been
paid to the employee. For this purpose,
the amount excluded from the
definition of eligible rollover
distribution under paragraph (c)(2)(ii) of
this section as a required minimum
distribution is determined under the
rules of paragraph (j)(3) of this section
(or paragraph (j)(4) of this section, if
applicable).
(ii) Rollovers to qualified plans must
be in capacity of employee. If a
surviving spouse rolls over a
distribution to a qualified plan
described in paragraph (a)(1)(iii)(B)(2) of
this section or to an eligible deferred
compensation plan described in section
457(b) that is maintained by an
employer described in section
457(e)(1)(A), then, with respect to the
amount rolled over, that amount is
treated as the spouse’s own interest
under the receiving plan and not the
interest of the decedent under the
distributing plan. Thus, for example, in
determining the required minimum
distribution from the receiving plan
with respect to the amount rolled over,
distributions must satisfy section
401(a)(9)(A) and not section
401(a)(9)(B).
(2) Non-spousal distributee—(i)
Eligibility for rollover. A distributee

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Federal Register / Vol. 89, No. 139 / Friday, July 19, 2024 / Rules and Regulations
other than the employee or the
employee’s surviving spouse (or a
spouse or former spouse who is an
alternate payee under a QDRO) is not
permitted to roll over a distribution
from a qualified plan. Therefore, a
distribution to a non-spousal distributee
does not constitute an eligible rollover
distribution under section 402(c)(4).
(ii) Direct transfer permitted.
Although a non-spousal distributee may
not roll over a distribution, pursuant to
section 402(c)(11), if the distributee is a
designated beneficiary (as determined
under § 1.401(a)(9)–4) who is not
described in paragraph (j)(1) of this
section and the distribution would be an
eligible rollover distribution had it been
paid to the employee, then the
distributee may elect that the
distribution be made in the form of a
direct trustee-to-trustee transfer to an
IRA established for the purpose of
receiving that distribution. If a direct
trustee-to-trustee transfer is made
pursuant to section 402(c)(11) then—
(A) The transfer is treated as an
eligible rollover distribution;
(B) The IRA is an inherited IRA
described in section 408(d)(3)(ii); and
(C) Section 401(a)(9)(B) (other than
section 401(a)(9)(B)(iv)) will apply to
the IRA.
(iii) Applicability to see-through
trusts. If a distributee described in
paragraph (j)(2)(ii) of this section is a
see-through trust described in
§ 1.401(a)(9)–4(f)(1)(i), then the
beneficiaries of the trust that are treated
as designated beneficiaries under
§ 1.401(a)(9)–4(f)(3) are also treated as
designated beneficiaries for purposes of
section 402(c)(11)(A).
(iv) Applicability of withholding rules.
An amount that could have been
transferred to a beneficiary IRA in
accordance with section 402(c)(11), but
instead, was paid directly to a nonspouse beneficiary, is treated as an
eligible rollover distribution for
purposes of section 3405(c). Thus, 20percent withholding under section
3405(c) applies to a distribution made
directly to a non-spouse beneficiary.
(3) Determination of amounts that
constitute required minimum
distributions for distributions to
beneficiaries—(i) In general—(A) First
portion of a distribution is treated as a
required minimum distribution. If a
minimum distribution is required to be
made to a beneficiary in a calendar year,
then the amounts distributed during
that calendar year are treated as
required minimum distributions under
section 401(a)(9), to the extent that the
total required minimum distribution
under section 401(a)(9) for the calendar
year has not been satisfied. Accordingly,

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those amounts are not eligible rollover
distributions. If the employee dies
before the employee’s required
beginning date (within the meaning of
§ 1.401(a)(9)–2(b)), then no amount is a
required minimum distribution for the
year in which the employee dies.
(B) Determination of required
minimum distribution based on
distribution method. Except as
otherwise provided in paragraphs
(j)(3)(ii) and (4) of this section, if an
employee dies before the employee’s
required beginning date, then the
amount that is not an eligible rollover
distribution because it is a required
minimum distribution for the calendar
year is determined under paragraph
(j)(3)(i)(C), (D), or (E) of this section,
whichever applies to the beneficiary.
See § 1.401(a)(9)–3(b)(4) and (c)(5) to
determine which rule applies. If an
employee dies on or after the
employee’s required beginning date,
then the amount that is not an eligible
rollover distribution because it is a
required minimum distribution for a
calendar year is determined under
paragraph (j)(3)(i)(F) of this section.
(C) Five-year rule in the case of death
before required beginning date. If the 5year rule described in § 1.401(a)(9)–
3(b)(2) or (c)(2) applies to the
beneficiary, then no amount is required
to be distributed until the end of the
calendar year that includes the fifth
anniversary of the date of the
employee’s death. In that year, the
entire amount to which the beneficiary
is entitled under the plan must be
distributed, and because it is a required
minimum distribution, it is not an
eligible rollover distribution. Thus, if
the 5-year rule applies with respect to
a designated beneficiary, then any
distribution made before the calendar
year that includes the fifth anniversary
of the date of the employee’s death is
eligible for rollover if it otherwise meets
the requirements of this section.
(D) Ten-year rule in the case of death
before required beginning date. If the
10-year rule described in § 1.401(a)(9)–
3(c)(3) applies to the beneficiary, then
no amount is required to be distributed
until the end of the calendar year that
includes the tenth anniversary of the
date of the employee’s death. In that
year, the entire amount to which the
beneficiary is entitled under the plan
must be distributed, and because it is
treated as a required minimum
distribution, it is not an eligible rollover
distribution. Thus, if the 10-year rule
applies with respect to a designated
beneficiary, then any distribution made
before the calendar year that includes
the tenth anniversary of the date of the
employee’s death is eligible for rollover

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58945

if it otherwise meets the requirements of
this section.
(E) Life expectancy rule. If the life
expectancy rule described in
§ 1.401(a)(9)–3(c)(4) (or, in the case of a
defined benefit plan, the annuity
payment rule described in § 1.401(a)(9)–
3(b)(3)) applies to the designated
beneficiary, then, in the first
distribution calendar year for the
beneficiary (as defined in § 1.401(a)(9)–
5(a)(2)(iii)) and in each subsequent
calendar year, the amount treated as a
required minimum distribution and not
eligible to be rolled over is determined
in accordance in with § 1.401(a)(9)–5(d)
and (e) (or, in the case of a defined
benefit plan, § 1.401(a)(9)–6).
(F) Employee dies on or after required
beginning date. If the employee dies on
or after the employee’s required
beginning date, then, in the calendar
year of the employee’s death, the
amount treated as a required minimum
distribution and not eligible to be rolled
over is determined in accordance with
§ 1.401(a)(9)–5(c) (or, in the case of a
defined benefit plan, § 1.401(a)(9)–6).
For each subsequent calendar year, the
amount treated as a required minimum
distribution and not eligible to be rolled
over is determined in accordance with
§ 1.401(a)(9)–5(d) and (e) (or, in the case
of a defined benefit plan, § 1.401(a)(9)–
6).
(ii) Exception allowing beneficiary to
change distribution method. If the 5year rule or 10-year rule described in
§ 1.401(a)(9)–3(b)(2), (c)(2) or (c)(3)
applies to a designated beneficiary
under the plan, and the eligible
designated beneficiary is using the
exception under § 1.408–8(d)(2)(ii) to
switch to the use of the life expectancy
rule under the IRA to which the
distribution is rolled over or transferred,
then the designated beneficiary must
determine the portion of the distribution
that is a required minimum distribution
that is not eligible for rollover using the
life expectancy rule described in
§ 1.401(a)(9)–3(c)(4) (or, in the case of a
defined benefit plan, the annuity
payment rule described in § 1.401(a)(9)–
3(b)(3)).
(4) Special rule applicable to a spouse
beneficiary—(i) In general. This
paragraph (j)(4) provides a special rule
relating to the determination of amounts
treated as a required minimum
distribution for distributions to an
employee’s surviving spouse to whom
the 10-year rule described in
§ 1.401(a)(9)–3(c)(3) applies. This rule,
which treats a portion of a distribution
made before the last year of the 10-year
period as a required minimum
distribution, applies if—

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(A) The distribution is made in or
after the calendar year the surviving
spouse attains the applicable age
described in § 1.401(a)(9)–2(b)(2); and
(B) The surviving spouse rolls over a
portion of that distribution to an eligible
retirement plan under which the
surviving spouse is not treated as the
beneficiary of the employee.
(ii) Catch-up of missed required
minimum distributions. If this
paragraph (j)(4) applies to a distribution
then, notwithstanding paragraph
(j)(3)(i)(D) of this section, the portion of
the distribution that is treated as a
required minimum distribution, and
thus is not an eligible rollover
distribution, is the excess (if any) of—
(A) The sum of the hypothetical
required minimum distributions
determined under paragraph (j)(4)(iii) of
this section for each year during the
catch-up period with respect to that
distribution (determined under
paragraph (j)(4)(v) of this section), over
(B) The actual distributions made to
the surviving spouse during those
calendar years (other than the calendar
year in which that distribution is made).
(iii) Calculation of hypothetical
required minimum distributions for the
catch-up period. This paragraph
(j)(4)(iii) provides rules for determining
the calculation of the hypothetical
required minimum distribution for each
calendar year during the catch-up
period with respect to a distribution
(determination year). The hypothetical
required minimum distribution for a
determination year is the amount that
would have been the required minimum
distribution for that year had the
election under § 1.401(a)(9)–5(g)(3)(i)
been in effect for the spouse. Thus, the
hypothetical required minimum
distribution is calculated using the
applicable denominator determined
under § 1.401(a)(9)–5(g)(3). However, in
lieu of the account balance that would
otherwise be used to determine the
required minimum distribution for the
determination year, an adjusted account
balance is used for this purpose. The
adjusted account balance for a
determination year is calculated by
reducing the account balance that
would otherwise be used to determine
the required minimum distribution for
the calendar year in which the
distribution is made by the excess (if
any) of—
(A) The sum of the hypothetical
required minimum distributions
determined under this paragraph
(j)(4)(iii) beginning with the first
applicable year and ending with the
calendar year preceding the
determination year; over

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(B) The actual distributions made to
the surviving spouse during those
calendar years.
(iv) Definition of first applicable year.
The first applicable year is the later of—
(A) The calendar year in which the
surviving spouse attains the applicable
age, and
(B) The calendar year in which the
employee would have attained the
applicable age.
(v) Definition of catch-up period. The
catch-up period with respect to a
distribution is the period that—
(A) Begins with first applicable year,
and
(B) Ends in the calendar year in which
the distribution is made.
(vi) Reasonable assumptions by plan
administrator. For purposes of section
402(f)(2)(A), a plan administrator is
permitted to assume that a surviving
spouse to whom this paragraph (j)(4)
applies will roll over (to the extent
permitted under the rules of this
paragraph (j)(4)) the entire distribution
to an eligible retirement plan under
which that spouse is not treated as the
beneficiary of the employee. Thus, a
plan administrator may assume that the
catch-up of missed required minimum
distributions described in paragraph
(j)(4)(ii) of this section applies to the
distribution and treat only the
remaining portion of the distribution as
an eligible rollover distribution for
purposes of sections 401(a)(31) and
3405(c). See paragraph (k)(2) of this
section concerning the effect of this
assumption for purposes of section
402(c).
(vii) [Reserved]
(k) Other rules—(1) Designation must
be irrevocable—(i) Indirect rollover. In
order for a contribution of an eligible
rollover distribution to an individual
retirement plan to constitute a rollover
and, thus, to qualify for exclusion from
gross income under section 402(c), a
distributee must elect, at the time the
contribution is made, to treat the
contribution as a rollover contribution.
An election is made by designating to
the trustee, issuer, or custodian of the
eligible retirement plan that the
contribution is a rollover contribution.
This election is irrevocable. Once any
portion of an eligible rollover
distribution has been contributed to an
individual retirement plan and
designated as a rollover distribution,
taxation of the withdrawal of the
contribution from the individual
retirement plan is determined under
section 408(d) rather than under section
402 or 403. Therefore, the eligible
rollover distribution is not eligible for
capital gains treatment, five-year or tenyear averaging, or the exclusion from

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gross income for net unrealized
appreciation on employer stock.
(ii) Direct rollover. If an eligible
rollover distribution is paid to an
eligible retirement plan in a direct
rollover at the election of the
distributee, the distributee is deemed to
have irrevocably designated that the
direct rollover is a rollover contribution.
(2) Use of actual minimum required
distribution calculation. The portion of
any distribution that an employee (or
spousal distributee) may roll over as an
eligible rollover distribution under
section 402(c) is determined based on
the actual application of section 402 and
other relevant provisions of the Internal
Revenue Code. The actual application of
these provisions may produce different
results than any assumption described
in paragraph (j)(4)(vi) of this section or
§ 1.401(a)(31)–1, Q&A–18, that is used
by the plan administrator. Thus, for
example, if the plan administrator
assumes there is no designated
beneficiary and calculates the portion of
a distribution that is a required
minimum distribution using the
Uniform Lifetime Table under
§ 1.401(a)(9)–9(c), but the portion of the
distribution that is actually a required
minimum distribution and thus not an
eligible rollover distribution is
determined by taking into account a
spousal designated beneficiary who is
more than 10 years younger than the
employee, then a greater portion of the
distribution is actually an eligible
rollover distribution and the distributee
may roll over the additional amount.
(3) Plan rollover not counted towards
one rollover per year limitation. A
distribution from a qualified plan that is
rolled over to an individual retirement
account or individual retirement
annuity is not treated for purposes of
section 408(d)(3)(B) as an amount
received by an individual from an
individual retirement account or
individual retirement annuity that is not
includible in gross income because of
the application of section 408(d)(3).
§ 1.402(c)–3

[Removed]

Par. 6. Section 1.402(c)–3 is removed.
■ Par. 7. Amend § 1.403(b)–6 by
revising and republishing paragraph (e).
The revision and republication read
as follows:
■

§ 1.403(b)–6
benefits.

*

Timing of distributions and

*
*
*
*
(e) Minimum required distributions
for eligible plans—(1) In general. Under
section 403(b)(10), a section 403(b)
contract must meet the minimum
distribution requirements of section
401(a)(9) (in both form and operation).

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See section 401(a)(9) for these
requirements.
(2) Generally treated as IRAs. For
purposes of applying the minimum
distribution requirements of section
401(a)(9) to section 403(b) contracts, the
minimum distribution requirements
applicable to individual retirement
annuities described in section 408(b)
and individual retirement accounts
described in section 408(a) apply to
section 403(b) contracts. Consequently,
except as otherwise provided in this
paragraph (e), the minimum distribution
requirements of section 401(a)(9) are
applied to section 403(b) contracts in
accordance with the provisions in
§ 1.408–8 that apply to an IRA that is
not a Roth IRA.
(3) Exceptions under which qualified
plan rules will apply—(i) Required
beginning date. The required beginning
date for purposes of section 403(b)(10)
is determined in accordance with
§ 1.401(a)(9)–2(b) (rather than § 1.408–
8(b)(1)).
(ii) Amounts not taken into account.
The amounts not taken into account in
determining whether the minimum
distribution requirement of section
401(a)(9) has been satisfied for a
calendar year are the amounts described
in § 1.402(c)–2(c)(3) (rather than the
amounts described in § 1.408–8(g)(2)).
(iii) Designated Roth account. The
rules of § 1.401(a)(9)–3(a)(2) (which
provides that if an employee’s entire
interest under a defined contribution
plan is in a designated Roth account,
then no distributions are required
during the employee’s lifetime and,
upon death, the employee is treated as
having died before the required
beginning date), § 1.401(a)(9)–5(b)(3)
(which excludes amounts held in a
designated Roth account from the
employee’s account balance), and
§ 1.401(a)(9)–5(g)(2)(iii) (regarding
distributions from designated Roth
accounts) apply to a designated Roth
account in a section 403(b) contract
(rather than the rules of § 1.408–
8(b)(1)(ii) that apply to a Roth IRA).
(iv) Qualifying longevity annuity
contracts. The rules in § 1.401(a)(9)–
6(q)(2)(i) (relating to the limitation on
premiums for a qualifying longevity
annuity contract (QLAC), as defined in
§ 1.401(a)(9)–6(q)(1)) and § 1.401(a)(9)–
6(q)(4)(i)(A) (relating to reliance on
representations with respect to a QLAC)
apply to the purchase of a QLAC under
a section 403(b) plan (rather than the
rules in § 1.408–8(h)(2) and (3)).
(4) Surviving spouse rule does not
apply. The rule in § 1.408–8(c) (under
which the surviving spouse of an IRA
owner is permitted to treat an IRA of the
decedent as the spouse’s own IRA) does

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not apply to a section 403(b) contract.
Thus, the surviving spouse of a
participant is not permitted to treat a
section 403(b) contract as the spouse’s
own section 403(b) contract, even if the
spouse is the sole beneficiary.
(5) Retirement income accounts. For
purposes of § 1.401(a)(9)–6(d) (relating
to annuity contracts purchased under a
defined contribution plan), annuity
payments provided with respect to
retirement income accounts do not fail
to satisfy the requirements of section
401(a)(9) merely because the payments
are not made under an annuity contract
purchased from an insurance company
that is licensed to do business under the
laws of a State, provided that the
relationship between the annuity
payments and the retirement income
accounts is not inconsistent with any
rules prescribed by the Commissioner in
revenue rulings, notices, or other
guidance published in the Internal
Revenue Bulletin (see § 601.601(d) of
this chapter). See also § 1.403(b)–9(a)(5)
for additional rules relating to annuities
payable from a retirement income
account.
(6) Special rules for benefits accruing
before December 31, 1986—(i) Nonapplicability of section 401(a)(9) to pre’87 account balance. The minimum
distribution requirements of section
401(a)(9) do not apply to the
undistributed portion of the account
balance under a section 403(b) contract
valued as of December 31, 1986,
exclusive of subsequent earnings (pre’87 account balance). The minimum
distribution requirements of section
401(a)(9) apply to all benefits under any
section 403(b) contract accruing after
December 31, 1986 (post-’86 account
balance), including earnings after
December 31, 1986. Consequently, the
post-’86 account balance includes
earnings after December 31, 1986, on
contributions made before January 1,
1987, in addition to the contributions
made after December 31, 1986, and
earnings thereon.
(ii) Recordkeeping required. The
issuer or custodian of the section 403(b)
contract must keep records that enable
it to identify the pre-’87 account balance
and subsequent changes as set forth in
paragraph (e)(6)(iii) of this section and
provide that information upon request
to the relevant employee or beneficiaries
with respect to the contract. If the issuer
or custodian does not keep those
records, the entire account balance is
treated as subject to section 401(a)(9).
(iii) Applicability of section 401(a)(9)
to post-’86 account balance. In applying
the minimum distribution requirements
of section 401(a)(9), only the post-’86
account balance is used to calculate the

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58947

required minimum distribution for a
calendar year. The amount of any
distribution from a contract is treated as
being paid from the post-’86 account
balance to the extent the distribution is
required to satisfy the minimum
distribution requirement with respect to
that contract for a calendar year. Any
amount distributed in a calendar year
from a contract in excess of the required
minimum distribution for a calendar
year with respect to that contract is
treated as paid from the pre-’87 account
balance, if any, of that contract.
(iv) Rollover of amounts from pre-’87
account balance. If an amount is
distributed from the pre-’87 account
balance and rolled over to another
section 403(b) contract, the amount is
treated as part of the post-’86 account
balance in that second contract.
However, if the pre-’87 account balance
under a section 403(b) contract is
directly transferred to another section
403(b) contract (as permitted under
§ 1.403(b)–10(b)), the amount
transferred retains its character as a pre’87 account balance, provided the issuer
of the transferee contract satisfies the
recordkeeping requirements of
paragraph (e)(6)(ii) of this section.
(v) Relevance of distinction between
pre-’87 and post-’86 account balance for
purposes of section 72. The distinction
between the pre-’87 account balance
and the post-’86 account balance
provided for under this paragraph (e)(6)
has no relevance for purposes of
determining the portion of a distribution
that is includible in income under
section 72.
(vi) Pre-’87 account balance
distributions must satisfy incidental
benefit requirement. The pre-’87
account balance must be distributed in
accordance with the incidental benefit
requirement of § 1.401–1(b)(1)(i).
Distributions attributable to the pre-’87
account balance are treated as satisfying
this requirement if all distributions from
the section 403(b) contract (including
distributions attributable to the post-’86
account balance) satisfy the
requirements of § 1.401–1(b)(1)(i)
without regard to this section, and
distributions attributable to the post-’86
account balance satisfy the rules of this
paragraph (e) (without regard to this
paragraph (e)(6)). Distributions
attributable to the pre-’87 account
balance are treated as satisfying the
incidental benefit requirement if all
distributions from the section 403(b)
contract (including distributions
attributable to both the pre-’87 account
balance and the post-’86 account
balance) satisfy the rules of this
paragraph (e) (without regard to this
paragraph (e)(6)).

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(7) Application to multiple contracts
for an employee. The required
minimum distribution must be
determined separately for each section
403(b) contract of an employee.
However, because, as provided in
paragraph (e)(2) of this section, the
minimum distribution requirements of
section 401(a)(9) apply to section 403(b)
contracts in accordance with the
provisions in § 1.408–8, the required
minimum distribution from one section
403(b) contract of an employee is
permitted to be distributed from another
section 403(b) contract in order to
satisfy the minimum distribution
requirements of section 401(a)(9). Thus,
as provided in § 1.408–8(e), with respect
to IRAs, the required minimum
distribution amount from each contract
is then totaled and the total minimum
distribution taken from any one or more
of the individual section 403(b)
contracts. However, consistent with the
rules in § 1.408–8(e), only amounts in
section 403(b) contracts that an
individual holds as an employee may be
aggregated. In addition, amounts in
section 403(b) contracts that a person
holds as a beneficiary of a decedent may
be aggregated, but those amounts may
not be aggregated with amounts held in
section 403(b) contracts that the person
holds as the employee or as the
beneficiary of another decedent.
Distributions from section 403(b)
contracts do not satisfy the minimum
distribution requirements for IRAs, nor
do distributions from IRAs satisfy the
minimum distribution requirements for
section 403(b) contracts.
(8) Governmental plans. A section
403(b) contract that is part of a
governmental plan (within the meaning
of section 414(d)) is treated as having
complied with section 401(a)(9) for all
years to which section 401(a)(9) applies
to the contract, if the terms of the
contract reflect a reasonable, good faith
interpretation of section 401(a)(9).
(9) Effective date. This paragraph (e)
applies for purposes of determining
required minimum distributions for
calendar years beginning on or after
January 1, 2025. For earlier calendar
years, the rules of 26 CFR 1.403(b)–6(e)
(as it appeared in the April 1, 2023,
edition of 26 CFR part 1) apply.
*
*
*
*
*
■ Par. 8. Revise and republish § 1.408–
8 to read as follows:
§ 1.408–8 Distribution requirements for
individual retirement plans.

(a) Applicability of section 401(a)(9)—
(1) In general. An IRA is subject to the
required minimum distribution
requirements of section 401(a)(9). In
order to satisfy section 401(a)(9), the

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rules of §§ 1.401(a)(9)–1 through
1.401(a)(9)–9 must be applied, except as
otherwise provided in this section. For
example, if the owner of an individual
retirement account dies before the IRA
owner’s required beginning date,
whether the 10-year rule or the life
expectancy rule applies to distributions
after the IRA owner’s death is
determined in accordance with
§ 1.401(a)(9)–3(c), and the rules of
§ 1.401(a)(9)–4 apply for purposes of
determining an IRA owner’s designated
beneficiary. The amount of the
minimum distribution required for each
calendar year from an individual
retirement account is determined in
accordance with § 1.401(a)(9)–5 and the
minimum distribution required for each
calendar year from an individual
retirement annuity described in section
408(b) is determined in accordance with
§ 1.401(a)(9)–6 (including § 1.401(a)(9)–
6(d)(2)).
(2) Definition of IRA and IRA owner.
For purposes of this section, an IRA is
an individual retirement account or
annuity described in section 408(a) or
(b), and the IRA owner is the individual
for whom an IRA is originally
established by contributions for the
benefit of that individual and that
individual’s beneficiaries.
(3) Substitution of specific terms. For
purposes of applying the required
minimum distribution rules of
§§ 1.401(a)(9)–1 through 1.401(a)(9)–9,
the IRA trustee, custodian, or issuer is
treated as the plan administrator, and
the IRA owner is substituted for the
employee.
(4) Treatment of SEPs and SIMPLE
IRA Plans. IRAs that receive employer
contributions under a SEP arrangement
(within the meaning of section 408(k))
or a SIMPLE IRA plan (within the
meaning of section 408(p)) are treated as
IRAs, rather than employer plans, for
purposes of section 401(a)(9) and are,
therefore, subject to the distribution
rules in this section.
(b) Different rules for IRAs and
qualified plans—(1) Determination of
required beginning date—(i) In general.
An IRA owner’s required beginning date
is determined using the rules for
employees who are 5-percent owners
under § 1.401(a)(9)–2(b)(3). Thus, the
IRA owner’s required beginning date is
April 1 of the calendar year following
the calendar year in which the
individual attains the applicable age.
(ii) Special rules for Roth IRAs. No
minimum distributions are required to
be made from a Roth IRA while the
owner is alive. After the Roth IRA
owner dies, the required minimum
distribution rules apply to the Roth IRA
as though the Roth IRA owner died

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before his or her required beginning
date. In accordance with section
401(a)(9)(B)(iv)(II), if the sole
beneficiary is the Roth IRA owner’s
surviving spouse, then the surviving
spouse may delay distributions until the
Roth IRA owner would have attained
the applicable age.
(2) Account balance determination.
For purposes of determining the
required minimum distribution from an
IRA for any calendar year, the account
balance of the IRA as of December 31 of
the calendar year preceding the calendar
year for which distributions are required
to be made is substituted for the account
balance of the employee under
§ 1.401(a)(9)–5(b). Except as provided in
paragraph (d) of this section, no
adjustments are made for contributions
or distributions after that date.
(3) Determination of portion of
distribution that is a required minimum
distribution. The portion of a
distribution from an IRA that is a
required minimum distribution and
thus not eligible for rollover is
determined in the same manner as
provided in § 1.402(c)–2(f) and (j) for a
distribution from a qualified plan. For
example, if a minimum distribution to
an IRA owner is required under section
401(a)(9)(A)(ii) for a calendar year, any
amount distributed during a calendar
year from an IRA of that IRA owner is
treated as a required minimum
distribution under section 401(a)(9) to
the extent that the total required
minimum distribution for the year
under section 401(a)(9) from all of that
IRA owner’s IRAs has not been satisfied
(either by a distribution from the IRA or,
as permitted under paragraph (e) of this
section, from another IRA).
(4) Documentation requirements—(i)
Disabled or chronically ill beneficiaries.
In determining whether an IRA owner’s
designated beneficiary is disabled or
chronically ill for purposes of
§ 1.401(a)(9)–4(e), the required
documentation described in
§ 1.401(a)(9)–4(e)(7) need not be
provided to the IRA trustee, custodian,
or issuer.
(ii) Trust documentation. In
determining whether the requirements
of § 1.401(a)(9)–4(f)(2) are met (to
determine whether a trust is a seethrough trust), the trust documentation
described in § 1.401(a)(9)–4(h) need not
be provided to the IRA trustee,
custodian, or issuer.
(c) Surviving spouse treating IRA as
own—(1) Election generally permitted—
(i) In general. The surviving spouse of
an individual may elect, in the manner
described in paragraph (c)(2) of this
section, to treat the surviving spouse’s
entire interest as a beneficiary in the

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individual’s IRA (or the remaining part
of that interest if distributions have
begun) as the surviving spouse’s own
IRA.
(ii) Eligibility to make election. In
order to make the election described in
this paragraph (c)(1), the surviving
spouse must be the sole beneficiary of
the IRA and have an unlimited right to
withdraw amounts from the IRA. If a
trust is named as beneficiary of the IRA,
this requirement is not satisfied even if
the surviving spouse is the sole
beneficiary of the trust.
(iii) Timing of election. If § 1.402(c)–
2(j)(4) (the special rule for catch-up
distributions after a surviving spouse
reaches the applicable age) would apply
to the IRA owner’s surviving spouse had
a distribution been made directly to the
surviving spouse in a calendar year,
then, except as provided in paragraph
(c)(1)(iv) of this section, the election
described in this paragraph (c)(1) may
not be made in that calendar year.
(iv) Exception for late elections. In the
case of a surviving spouse who,
pursuant to the timing rule in paragraph
(c)(1)(iii) of this section, may not make
the election described in paragraph
(c)(1)(i) of this section in a calendar
year, the spouse may nevertheless make
the election in that calendar year
provided that the election does not
apply to amounts in the IRA that would
be treated as required minimum
distributions under § 1.402(c)–2(j)(4)(ii)
had they been distributed in that
calendar year. Thus, the election can be
made in a calendar year only after the
amounts treated as required minimum
distributions under § 1.402(c)–2(j)(4)(ii)
for that calendar year have been
distributed from the IRA.
(2) Election procedures. The election
described in paragraph (c)(1) of this
section is made by the surviving spouse
redesignating the account as an account
in the name of the surviving spouse as
IRA owner rather than as beneficiary.
Alternatively, a surviving spouse
eligible to make the election is deemed
to have made the election if, at any time,
either of the following occurs—
(i) Any amount in the IRA that would
be required to be distributed to the
surviving spouse as beneficiary under
section 401(a)(9)(B) for a calendar year
following the calendar year of the IRA
owner’s death is not distributed within
the time period required under section
401(a)(9)(B); or
(ii) A contribution (other than a
rollover of a distribution from an
eligible retirement plan of the decedent)
is made to the IRA.
(3) Effect of election. Following an
election described in paragraph (c)(1) of
this section, the surviving spouse is

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considered the IRA owner for whose
benefit the trust is maintained for all
purposes under the Internal Revenue
Code (including section 72(t)). Thus, for
example, the required minimum
distribution for the calendar year of the
election and each subsequent calendar
year is determined under section
401(a)(9)(A) with the spouse as IRA
owner and not section 401(a)(9)(B) with
the surviving spouse as the deceased
IRA owner’s beneficiary. However, if the
election is made in the calendar year
that includes the date of the IRA
owner’s death, the spouse is not
required to take a required minimum
distribution as the IRA owner for that
calendar year. Instead, the spouse is
required to take a required minimum
distribution for that year, determined
with respect to the deceased IRA owner
under the rules of § 1.401(a)(9)–5(c), to
the extent the distribution was not made
to the IRA owner before death.
(d) Treatment of rollovers and
transfers—(1) Treatment of rollovers—
(i) In general. If a distribution is rolled
over to an IRA, then the rules in
§ 1.401(a)(9)–7 apply for purposes of
determining the account balance and
the required minimum distribution for
that IRA. However, because the value of
the account balance is determined as of
December 31 of the year preceding the
year for which the required minimum
distribution is being determined, and
not as of a valuation date in the
preceding year, the account balance of
the IRA is adjusted only if the amount
rolled over is not received in the
calendar year in which the amount was
distributed. If the amount rolled over is
received in the calendar year following
the calendar year in which the amount
was distributed, then, for purposes of
determining the required minimum
distribution for that following calendar
year, the account balance of the IRA as
of December 31 of the calendar year in
which the distribution was made must
be adjusted by the amount received in
accordance with § 1.401(a)(9)–7(b).
(ii) Spousal rollovers. A surviving
spouse is permitted to roll over a
distribution to an IRA as the beneficiary
of the deceased employee or IRA owner,
and the rules of paragraph (d)(1)(i) of
this section apply to that IRA. A
surviving spouse may also elect to treat
that IRA as the spouse’s own IRA in
accordance with paragraph (c) of this
section.
(2) Special rules for death before
required beginning date—(i) Carryover
of election under qualified plan or IRA.
If an employee or IRA owner dies before
the required beginning date and the
surviving spouse rolls over a
distribution of the employee’s or IRA

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58949

owner’s interest to an IRA in the
spouse’s capacity as a beneficiary of the
deceased employee or IRA owner, then,
except as provided in paragraph
(d)(2)(ii) of this section, the method for
determining required minimum
distributions that applied to that
surviving spouse under the distributing
plan or IRA (such as when a beneficiary
makes an election described in
§ 1.401(a)(9)–3(c)(5)(iii)) also applies to
the receiving IRA. Thus, for example, if
an employee who died before the
required beginning date designated the
employee’s surviving spouse as a
beneficiary of the employee’s interest in
the plan and the plan provides that the
surviving spouse is subject to the 10year rule described in § 1.401(a)(9)–
3(c)(4), then the 10-year rule also
applies to any IRA in the name of the
decedent that receives a rollover of the
employee’s interest.
(ii) Change from 5-year rule or 10-year
rule to life expectancy payments. If the
5-year rule or 10-year rule described in
§ 1.401(a)(9)–3(b)(2), (c)(2), or (c)(3),
respectively, applies to a distributing
plan or IRA and a distribution is made
to the employee’s surviving spouse
before the deadline described in
§ 1.401(a)(9)–3(b)(4)(iii) or (c)(5)(iii) that
would have applied had the distributing
plan or IRA permitted the surviving
spouse to make an election between the
5-year rule or 10-year rule and the life
expectancy rule (or, in the case of a
defined benefit plan, the annuity
payment rule), then the surviving
spouse may elect to have the life
expectancy rule described in
§ 1.401(a)(9)–3(c)(4) or the annuity
payment rule described in § 1.401(a)(9)–
3(b)(3) apply to any IRA to which any
portion of that distribution is rolled
over. However, see § 1.402(c)–2(j)(4)(ii)
to determine the portion of that
distribution that is treated as a required
minimum distribution in the calendar
year of the distribution and thus is not
eligible for rollover.
(iii) Spousal rollover to spouse’s own
IRA. If an employee or IRA owner dies
before the required beginning date and
the surviving spouse rolls over a
distribution described in paragraph
(d)(2)(i) of this section from the
surviving spouse’s IRA in the capacity
as the beneficiary of the decedent to the
surviving spouse’s own IRA, then, in
determining the amount that is treated
as a required minimum distribution
under section 401(a)(9) and thus is not
eligible for rollover, the rules of
§ 1.402(c)–2(j)(4) are applied as if the
distribution was made directly from the
decedent’s interest in the plan or IRA to
the surviving spouse’s own IRA.

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(3) Applicability of rollover rules to
non-spouse beneficiary. The rules of
paragraphs (d)(1)(i), (2)(i) and (ii) of this
section apply to a non-spouse
beneficiary who makes an election to
have a distribution made in the form of
a direct trustee-to-trustee transfer as
described in section 402(c)(11) in the
same manner as a rollover of a
distribution made by a surviving
spouse.
(4) Treatment of transfers. In the case
of a trustee-to-trustee transfer from one
IRA to another IRA that is not a
distribution and rollover, the transfer is
not treated as a distribution by the
transferor IRA for purposes of section
401(a)(9). Accordingly, the minimum
distribution requirement with respect to
the transferor IRA must still be satisfied.
After the transfer, the employee’s
account balance and the required
minimum distribution under the
transferee IRA are determined in the
same manner that an account balance
and required minimum distribution are
determined under an IRA receiving a
rollover contribution under paragraph
(d)(1) of this section.
(e) Application of section 401(a)(9) for
multiple IRAs—(1) Distribution from
one IRA to satisfy total required
minimum distribution—(i) In general.
The required minimum distribution
from one IRA is permitted to be
distributed from another IRA in order to
satisfy section 401(a)(9), subject to the
limitations of paragraphs (e)(2) and (3)
of this section. Except as provided in
paragraph (e)(1)(ii) of this section, the
required minimum distribution must be
calculated separately for each IRA and
the sum of those separately calculated
required minimum distributions may be
distributed from any one or more of the
IRAs under the rules set forth in this
paragraph (e).
(ii) Permitted aggregation of annuity
contract and account balance. Subject
to the limitations of paragraphs (e)(2)
and (3) of this section, an individual
who holds an IRA that is an annuity
contract described in section 408(b) may
elect to aggregate that IRA with one or
more IRAs with account balances that
the individual holds and apply the
optional aggregation rule of
§ 1.401(a)(9)–5(a)(5)(iv) with respect to
the annuity contract and the account
balances under those IRAs as if the
account balances were the remaining
account balances following the purchase
of the annuity contract with a portion of
those account balances.
(2) IRAs eligible for aggregate
treatment—(i) IRA owners. Generally,
only amounts in IRAs that an individual
holds as the IRA owner are aggregated
for purposes of paragraph (e)(1) of this

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Jkt 262001

section. Except in the case of a surviving
spouse electing to treat a decedent’s IRA
as the spouse’s own IRA, an IRA that a
beneficiary acquires as a result of the
death of an individual is not treated as
an IRA of the beneficiary but rather as
an IRA of the decedent for purposes of
this paragraph (e). Thus, for example,
for purposes of satisfying the minimum
distribution requirements with respect
to one IRA by making distributions from
another IRA, IRAs for which the
individual is the IRA owner are not
aggregated with IRAs for which the
individual is a beneficiary.
(ii) IRA beneficiaries. IRAs that a
person holds as a beneficiary of a
decedent are aggregated for purposes of
paragraph (e)(1) of this section, but
those amounts are not aggregated with
IRAs that the person holds as the owner
or as the beneficiary of a different
decedent.
(3) Non-Roth IRAs are treated
separately from section 403(b) contracts
and Roth IRAs. Distributions from an
IRA that is not a Roth IRA may not be
used to satisfy the required minimum
distribution requirements with respect
to a Roth IRA, or a section 403(b)
contract (as defined in § 1.403(b)–
2(b)(16)(i)). Similarly, distributions from
a Roth IRA do not satisfy the required
minimum distribution requirements
with respect to a section 403(b) contract
or an IRA that is not a Roth IRA. In
addition, distributions from a section
403(b) contract do not satisfy the
required minimum distribution
requirements with respect to an IRA.
(4) Allocation rule for partial
distributions in year of death—(i)
Distribution required in year of IRA
owner’s death. This paragraph (e)(4)
provides a special rule that applies if an
IRA owner has multiple IRAs (which do
not all have identical beneficiary
designations) that are aggregated in
accordance with paragraph (e)(1) of this
section and that IRA owner dies before
taking the total required minimum
distribution for the calendar year of the
IRA owner’s death (that is, there is a
shortfall). In that case, each of the
owner’s IRAs is subject to a requirement
to distribute a proportionate share of the
shortfall for the calendar year to a
beneficiary of that IRA, with the
proportions based on the account
balances determined under paragraph
(b)(2) of this section. This allocation of
the shortfall to a particular IRA is made
without regard to whether some of the
required minimum distribution for the
calendar year was already made to the
IRA owner from that IRA.
(ii) Distribution requirement in the
year of beneficiary’s death. Rules
similar to the rules of paragraph (e)(4)(i)

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of this section apply in the case of a
beneficiary of multiple IRAs that are
aggregated under paragraph (e)(1) of this
section if a required minimum
distribution is due for that beneficiary
in the calendar year of the beneficiary’s
death, to the extent that the amount was
not distributed to the beneficiary.
(iii) Example. Assume IRA owner X
died on December 31, 2024, at the age
of 75. At the time of X’s death, X owned
two separate IRAs, IRA Y and IRA Z,
neither of which is a Roth IRA. The
balance of IRA Y as of December 31,
2023, was $100,000 and the balance of
IRA Z as of December 31, 2023, was
$50,000. X died after X’s required
beginning date and under the rules of
paragraph (e)(1) of this section, the total
of the 2024 required minimum
distributions for IRA Y and IRA Z is
$6,097.56 ($150,000/24.6). X designated
A as his beneficiary under IRA Y and B
as his beneficiary under IRA Z. Prior to
X’s death, X had taken a $3,000
distribution from IRA Z in 2024. Under
the rules of paragraph (e)(4)(i) of this
section, the remaining portion of the
2024 required minimum distribution
($3,097.56) is allocated two-thirds to
IRA Y and one-third to IRA Z. Thus, in
the calendar year of X’s death A is
required to take a required minimum
distribution of $2,065.04 from IRA Y
and B is required to take a required
minimum distribution of $1,032.52 from
IRA Z.
(f) Reporting requirements. The
trustee, custodian, or issuer of an IRA is
required to report information with
respect to the minimum amount
required to be distributed from the IRA
for each calendar year to individuals or
entities, at the time, and in the manner,
prescribed by the Commissioner in
revenue rulings, notices, and other
guidance published in the Internal
Revenue Bulletin (see § 601.601(d) of
this chapter), as well as the applicable
Federal tax forms and accompanying
instructions.
(g) Distributions taken into account—
(1) General rule. Except as provided in
paragraph (g)(2) of this section, all
amounts distributed from an IRA are
taken into account in determining
whether section 401(a)(9) is satisfied,
regardless of whether the amount is
includible in income. Thus, for
example, a qualified charitable
distribution made pursuant to section
408(d)(8) is taken into account in
determining whether section 401(a)(9) is
satisfied.
(2) Amounts not taken into account.
The following amounts are not taken
into account in determining whether the
required minimum distribution with

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Federal Register / Vol. 89, No. 139 / Friday, July 19, 2024 / Rules and Regulations
respect to an IRA for a calendar year has
been made—
(i) Contributions returned pursuant to
section 408(d)(4), together with the
income allocable to these contributions;
(ii) Contributions returned pursuant
to section 408(d)(5);
(iii) Corrective distributions of excess
simplified employee pension
contributions under section
408(k)(6)(C), together with the income
allocable to these distributions;
(iv) Amounts that are treated as
distributed pursuant to section 408(e);
(v) Amounts that are treated as
distributed as a result of the purchase of
a collectible pursuant to section 408(m);
(vi) Corrective distributions of excess
deferrals as described in § 1.402(g)–1(e),
together with the income allocable to
these corrective distributions; and
(vii) Similar items designated by the
Commissioner in revenue rulings,
notices, and other guidance published
in the Internal Revenue Bulletin. See
§ 601.601(d) of this chapter.
(h) Qualifying longevity annuity
contracts—(1) General rule. The special
rule in § 1.401(a)(9)–5(b)(4) for a QLAC,
defined in § 1.401(a)(9)–6(q), applies to
an IRA, subject to the modifications set
forth in this paragraph (h).
(2) Reliance on representations. For
purposes of the limitation described in
§ 1.401(a)(9)–6(q)(2)(ii), unless the
trustee, custodian, or issuer of an IRA
has actual knowledge to the contrary,
the trustee, custodian, or issuer may rely
on the IRA owner’s representation
(made in writing or other form as may
be prescribed by the Commissioner) of
the amount of the premiums described
Regulation section

Remove

§ 31.3405(c)–1, Q&A–1(a) ..................................
§ 31.3405(c)–1, Q&A–1(b) ..................................

‘‘§ 1.402(c)–2, Q&A–2’’ ....................................
‘‘§ 1.402(c)–2, Q&A–3 through Q&A–10 and
Q&A–14’’.
‘‘§ 1.402(c)–2, Q&A–10’’ ..................................
‘‘§ 1.402(c)–2, Q&A–2’’ ....................................
‘‘§ 1.402(c)–2, Q&A–15’’ ..................................
‘‘§ 1.402(c)–2, Q&A–9’’ ....................................
‘‘Q&A–10 of § 1.402(c)–2’’ ...............................
‘‘§ 1.402(c)–2, Q&A–10’’ ..................................

§ 31.3405(c)–1,
§ 31.3405(c)–1,
§ 31.3405(c)–1,
§ 31.3405(c)–1,
§ 31.3405(c)–1,
§ 31.3405(c)–1,

Q&A–4 ......................................
Q&A–7(a) ..................................
Q&A–10(a) ................................
Q&A–11 ....................................
Q&A–13 ....................................
Q&A–13 ....................................

§ 54.4974–1 Excise tax on accumulations
in qualified retirement plans.

Par. 12. The authority citation for part
54 continues to read in part as follows:

(a) Imposition of excise tax—(1) In
general. If the amount distributed to a
payee under any qualified retirement
plan or any eligible deferred
compensation plan (as defined in
section 457(b)) for a calendar year is less
than the required minimum distribution
for that year, section 4974 imposes an
excise tax on the payee for the taxable
year beginning with or within the

Authority: 26 U.S.C. 7805, unless
otherwise noted.

Par. 13. Revise and republish
§ 54.4974–1 to read as follows:

■

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Par. 9. Amend § 1.457–6 by revising
and republishing paragraph (d).
The revision and republication read
as follows:

■

§ 1.457–6 Timing of distributions under
eligible plans.

*

*
*
*
*
(d) Minimum required distributions
for eligible plans. In order to be an
eligible plan, a plan must meet the
distribution requirements of section
457(d)(1) and (2). Under section
457(d)(2), a plan must meet the
minimum distribution requirements of
section 401(a)(9). See section 401(a)(9)
and the regulations thereunder for these
requirements. For taxable years
beginning on or after January 1, 2025, if
an eligible plan is subject to the rules of
§ 1.401(a)(9)–5, then the plan must meet
the requirements of section 401(a)(9)(H).
The preceding sentence applies to an
eligible plan maintained by any eligible
employer (including an eligible plan of
a tax-exempt entity).
*
*
*
*
*
PART 31—EMPLOYMENT TAXES AND
COLLECTION OF INCOME TAX AT
SOURCE
Par. 10. The authority citation for part
31 continues to read in part as follows:

■

Authority: 26 U.S.C. 7805, unless
otherwise noted.

Par. 11. For each section set forth
below, revise the section by removing
the text that appears in the column
labeled ‘‘Remove’’ and replacing it with
the text that appears in the column
labeled ‘‘Insert’’:

■

Insert

PART 54—PENSION EXCISE TAXES
■
ddrumheller on DSK120RN23PROD with RULES2

in § 1.401(a)(9)–6(q)(2)(ii) that are not
paid under the IRA.
(3) Permitted delay in setting
beneficiary designation. In the case of a
contract that is rolled over from a plan
to an IRA before the required beginning
date under the plan, the contract will
not violate the rule in § 1.401(a)(9)–
6(q)(3)(iii)(F) that a non-spouse
beneficiary must be irrevocably selected
on or before the later of the date of
purchase and the required beginning
date under the IRA, provided that the
contract requires a beneficiary to be
irrevocably selected by the end of the
year following the year of the rollover.
(4) Roth IRAs. The rule in
§ 1.401(a)(9)–5(b)(4) does not apply to a
Roth IRA. Accordingly, a contract that is
purchased under a Roth IRA is not
treated as a contract that is intended to
be a QLAC for purposes of applying the
dollar limitation rule in § 1.401(a)(9)–
6(q)(2)(ii). If a QLAC is purchased or
held under a plan, annuity, account, or
traditional IRA, and that contract is later
rolled over or converted to a Roth IRA,
the contract is not treated as a contract
that is intended to be a QLAC after the
date of the rollover or conversion. Thus,
premiums paid with respect to the
contract will not be taken into account
under § 1.401(a)(9)–6(q)(2)(ii) after the
date of the rollover or conversion.
(i) [Reserved]
(j) Applicability date. This section
applies for purposes of determining
required minimum distributions for
calendar years beginning on or after
January 1, 2025. For earlier calendar
years, the rules of 26 CFR 1.408–8 (as
it appeared in the April 1, 2023, edition
of 26 CFR part 1) apply.

58951

‘‘§ 1.402(c)–2(a)(1)(iii)’’.
‘‘§ 1.402(c)–2’’.
‘‘§ 1.402(c)–2(h)’’.
‘‘§ 1.402(c)–2(a)(1)(iii)’’.
‘‘§ 1.402(c)–2(k)(2)’’.
‘‘§ 1.402(c)–2(g)’’.
‘‘§ 1.402(c)–2(h)’’.
‘‘§ 1.402(c)–2(h)’’.

calendar year during which the amount
is required to be distributed. Except as
provided in paragraph (a)(2) of this
section, the tax is equal to 25 percent of
the amount by which the required
minimum distribution for a calendar
year exceeds the actual amount
distributed during the calendar year.
(2) Reduction of tax in certain cases—
(i) In general. In the case of a taxpayer
who satisfies this paragraph (a)(2), the
tax described in paragraph (a)(1) of this

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section is equal to 10 percent (in lieu of
25 percent) of the amount by which the
required minimum distribution for a
calendar year exceeds the actual amount
distributed during the calendar year.
(ii) Eligible taxpayers. This paragraph
(a)(2) is satisfied if, by the last day of the
correction window described in
paragraph (a)(2)(iii) of this section, the
taxpayer—
(A) Receives a corrective distribution
from the applicable plan described in
paragraph (a)(2)(iv) of this section of the
amount by which the required
minimum distribution for a calendar
year exceeds the actual amount
distributed during the calendar year
from that plan; and
(B) Files a return reflecting the tax
described in this paragraph (a).
(iii) Correction window. For purposes
of paragraph (a)(2) of this section, the
correction window ends on the earliest
of—
(A) The date a notice of deficiency
under section 6212 with respect to the
tax imposed by section 4974(a) is
mailed;
(B) The date on which the tax
imposed by section 4974(a) is assessed;
or
(C) The last day of the second taxable
year that begins after the end of the
taxable year in which the tax under
section 4974(a) is imposed.
(iv) Applicable plan. If the minimum
distribution was required to be paid
from a particular qualified retirement
plan or eligible deferred compensation
plan, then the applicable plan is that
particular qualified retirement plan or
eligible deferred compensation plan.
However, if the requirement to take a
minimum distribution could have been
satisfied by a payment from any one of
a number of qualified retirement plans
(such as an individual retirement
account under section 408(a) or a
section 403(b) plan), then the corrective
distribution may be taken from any one
of those qualified retirement plans.
(3) Definition of required minimum
distribution. For purposes of section
4974, the term required minimum
distribution means the minimum
amount required to be distributed
pursuant to section 401(a)(9), 403(b)(10),
408(a)(6), 408(b)(3), or 457(d)(2), as the
case may be. Except as otherwise
provided in paragraph (f) of this section
(which provides a special rule for
amounts required to be distributed by
an employee’s, or an individual’s,
required beginning date), the required
minimum distribution for a calendar
year is the required minimum
distribution amount required to be
distributed during the calendar year.

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(b) Definition of qualified retirement
plan. For purposes of section 4974, each
of the following is a qualified retirement
plan—
(1) A plan described in section 401(a)
that includes a trust exempt from tax
under section 501(a);
(2) An annuity plan described in
section 403(a);
(3) An annuity contract, custodial
account, or retirement income account
described in section 403(b);
(4) An individual retirement account
described in section 408(a) (including a
Roth IRA described in section 408A);
(5) An individual retirement annuity
described in section 408(b) (including a
Roth IRA described in section 408A); or
(6) Any other plan, contract, account,
or annuity that, at any time, has been
treated as a plan, account, or annuity
described in paragraphs (b)(1) through
(5) of this section but that no longer
satisfies the applicable requirements for
that treatment.
(c) Determination of required
minimum distribution for individual
accounts—(1) General rule. Except as
otherwise provided in this paragraph
(c), if a payee’s interest under a
qualified retirement plan or any eligible
deferred compensation plan is in the
form of an individual account (and
distribution of that account is not being
made under an annuity contract
purchased in accordance with
§ 1.401(a)(9)–5(a)(5) and § 1.401(a)(9)–
6(d)), the amount of the required
minimum distribution for any calendar
year for purposes of section 4974 is the
amount required to be distributed to
that payee for that calendar year
determined in accordance with
§ 1.401(a)(9)–5 as provided in the
following (whichever applies)—
(i) Section 401(a)(9), §§ 1.401(a)(9)–1
through 1.401(a)(9)–5, and 1.401(a)(9)–7
through 1.401(a)(9)–9, in the case of a
plan described in section 401(a) that
includes a trust exempt under section
501(a) or an annuity plan described in
section 403(a);
(ii) Section 403(b)(10) and § 1.403(b)–
6(e) in the case of an annuity contract,
custodial account, or retirement income
account described in section 403(b);
(iii) Section 408(a)(6) or (b)(3) and
§ 1.408–8 in the case of an individual
retirement account or annuity described
in section 408(a) or (b); or
(iv) Section 457(d) and § 1.457–6(d) in
the case of an eligible deferred
compensation plan.
(2) Distributions under 5-year rule or
10-year rule. If an employee dies before
the required beginning date and either
§ 1.401(a)(9)–3(c)(2) or (3) applies to the
employee’s beneficiary, there is no
required minimum distribution until the

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end of the calendar year described in
whichever of those paragraphs applies
to the beneficiary (that is, the calendar
year that includes the fifth anniversary
or the tenth anniversary of the date of
the employee’s death, as applicable).
The required minimum distribution due
in that fifth or tenth calendar year is the
employee’s entire interest in the plan.
(3) Default provisions. Unless
otherwise provided under the qualified
retirement plan or eligible deferred
compensation plan (or, if applicable, the
governing instrument of the plan), the
default provisions in § 1.401(a)(9)–
3(c)(5)(i) apply in determining whether
paragraph (c)(1) or (2) of this section
applies.
(4) Plans providing uniform required
beginning date. For purposes of this
section, if the plan provides a uniform
required beginning date for purposes of
section 401(a)(9) for all employees in
accordance with § 1.401(a)(9)–2(b)(4),
then the required minimum distribution
for each calendar year for an employee
who is not a 5-percent owner is the
lesser of the amount determined based
on a required beginning date of April 1
of the calendar year following the
calendar year in which the employee
attains the applicable age or the amount
determined based on the required
beginning date under the plan. Thus, for
example, if an employee who was not a
5-percent owner participated in a
defined contribution plan with a
uniform required beginning date (as
described in the preceding sentence)
and the employee died after the
applicable age (but before April 1 of the
calendar year following the calendar
year in which the employee retired)
without a designated beneficiary, then
required minimum distributions for
calendar years after the calendar year
that includes the date of the employee’s
death are equal to the lesser of—
(i) The required minimum
distribution determined by treating the
employee as dying before the required
beginning date (that is, the 5-year rule
of § 1.401(a)(9)–3(c)(2)); or
(ii) The required minimum
distribution determined by treating the
employee as dying on or after the
required beginning date (annual
distributions over the employee’s
remaining life expectancy, as set forth in
§ 1.401(a)(9)–5(d)).
(d) Determination of required
minimum distribution under a defined
benefit plan or annuity—(1) General
rule. If a payee’s interest in a qualified
retirement plan or eligible deferred
compensation plan is being distributed
in the form of an annuity (either directly
from the plan, in the case of a defined
benefit plan, or under an annuity

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Federal Register / Vol. 89, No. 139 / Friday, July 19, 2024 / Rules and Regulations
contract purchased from an insurance
company), then the amount of the
required minimum distribution for
purposes of section 4974 depends on
whether the annuity is a permissible
annuity distribution option or an
impermissible annuity distribution
option. For this purpose—
(i) A permissible annuity distribution
option is an annuity contract (or, in the
case of annuity distributions from a
defined benefit plan, a distribution
option) that specifically provides for
distributions that, if made as provided,
would for every calendar year equal or
exceed the minimum distribution
amount required to be distributed to
satisfy the applicable section
enumerated in paragraph (b) of this
section for that calendar year; and
(ii) An impermissible annuity
distribution option is any other annuity
distribution option.
(2) Permissible annuity distribution
option. If the annuity contract (or, in the
case of annuity distributions from a
defined benefit plan, a distribution
option) under which distributions to the
payee are being made is a permissible
annuity distribution option, then the
required minimum distribution for a
given calendar year for purposes of
section 4974 equals the amount that the
annuity contract (or distribution option)
provides is to be distributed for that
calendar year.
(3) Impermissible annuity distribution
option—(i) General rule. If the annuity
contract (or, in the case of annuity
distributions from a defined benefit
plan, the distribution option) under
which distributions to the payee are
being made is an impermissible annuity
distribution option, then the required
minimum distribution for each calendar
year for purposes of section 4974 is the
amount that would be distributed under
the applicable permissible annuity
distribution option described in this
paragraph (d)(3) (or the amount
determined by the Commissioner if
there is no option of this type). The
determination of which permissible
annuity distribution applies depends on
whether distributions commenced
before the death of the employee,
whether the plan is a defined benefit or
defined contribution plan, whether
there is a designated beneficiary for
purposes of section 401(a)(9), and
whether the designated beneficiary is an
eligible designated beneficiary under
section 401(a)(9)(E)(ii). For this purpose,
the determination of whether there is a
designated beneficiary and whether that
designated beneficiary is an eligible
designated beneficiary is made in
accordance with § 1.401(a)(9)–4, and the
determination of which designated

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beneficiary’s life is to be used in the
case of multiple designated beneficiaries
in made in accordance with
§ 1.401(a)(9)–5(f).
(ii) Defined benefit plan—(A) Benefits
commence before employee dies. If the
plan under which distributions are
being made is a defined benefit plan,
benefits commence before the employee
dies, and there is a designated
beneficiary, then the applicable
permissible annuity distribution option
is the joint and survivor annuity option
under the plan for the lives of the
employee and the designated
beneficiary that is a permissible annuity
distribution option and that provides for
the greatest level amount payable to the
employee determined on an annual
basis. If the plan does not provide an
option described in the preceding
sentence (or there is no designated
beneficiary under the impermissible
annuity distribution option), then the
applicable permissible annuity
distribution option is the life annuity
option under the plan payable for the
life of the employee in level amounts
with no survivor benefit.
(B) Employee dies before benefits
commence. If the plan under which
distributions are being made is a
defined benefit plan, the employee dies
before benefits commence, there is a
designated beneficiary, and the plan has
a life annuity option payable for the life
of the designated beneficiary in level
amounts, then the applicable
permissible annuity distribution option
is that life annuity option. If there is no
designated beneficiary, then the 5-year
rule in section 401(a)(9)(B)(ii) applies in
accordance with paragraph (d)(4)(i) of
this section.
(iii) Defined contribution plan—(A) In
general. If the plan under which
distributions are being made is a
defined contribution plan and the
impermissible annuity distribution
option is an annuity contract purchased
from an insurance company, then the
applicable permissible annuity
distribution option is the applicable
annuity described in paragraph
(d)(3)(iii)(B) or (C) of this section that
could have been purchased with the
portion of the employee’s or
individual’s account that was used to
purchase the annuity contract that is the
impermissible annuity distribution
option. The amount of the payments
under that annuity contract are
determined using the interest rate
prescribed under section 7520
determined as of the date the contract
was purchased, the ages of the
annuitants on that date, and the
mortality rates in § 1.401(a)(9)–9(e).

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58953

(B) Benefits commence before
employee dies. If the plan under which
distributions are being made is a
defined contribution plan, the benefits
commence before the employee dies,
and there is a designated beneficiary
who is an eligible designated
beneficiary within the meaning of
section 401(a)(9)(E)(ii), then the
applicable annuity is the joint and
survivor annuity option providing level
annual payments for the lives of the
employee and the designated
beneficiary, under which the amount of
the periodic payment that would have
been payable to the survivor is the
applicable percentage under the table in
§ 1.401(a)(9)–6(b)(2) (taking into account
the rules of § 1.401(a)(9)–6(k)(2)) of the
amount of the periodic payment that
would have been payable to the
employee or individual. If there is no
designated beneficiary, or if the
designated beneficiary is not an eligible
designated beneficiary under the
impermissible distribution option, then
the annuity described in this paragraph
(d)(3)(iii)(B) is a life annuity for the life
of the employee with no survivor
benefit that provides level annual
payments.
(C) Employee dies before benefits
commence. If the plan under which
distributions are being made is a
defined contribution plan, the employee
dies before benefits commence, and
there is an eligible designated
beneficiary under the impermissible
annuity distribution option, then the
applicable annuity is a life annuity for
the life of the designated beneficiary
that provides level annual payments
and that would have been a permissible
annuity distribution option. If there is
no designated beneficiary, then section
401(a)(9)(B)(ii) applies in accordance
with paragraph (d)(4)(i) of this section.
If the designated beneficiary is not an
eligible designated beneficiary, then
section 401(a)(9)(B)(ii) applies in
accordance with paragraph (d)(4)(ii) of
this section.
(4) Application of section
401(a)(9)(B)(ii)—(i) Application of 5year rule. If the 5-year rule in section
401(a)(9)(B)(ii) applies to the
distribution to the payee under the
contract (or distribution option), then no
amount is required to be distributed to
satisfy the applicable enumerated
section in paragraph (b) of this section
until the end of the calendar year that
includes the fifth anniversary of the date
of the employee’s death. For the
calendar year that includes the fifth
anniversary of the date of the
employee’s death, the amount required
to be distributed to satisfy the
applicable enumerated section is the

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payee’s entire remaining interest in the
annuity contract (or under the plan in
the case of distributions from a defined
benefit plan). However, see
§ 1.401(a)(9)–6(j) for rules regarding
payments that are not permitted under
section 436.
(ii) Application of 10-year rule. If the
employee dies before distribution of the
employee’s entire interest, section
401(a)(9)(H) applies, and the designated
beneficiary of the remaining interest is
not an eligible designated beneficiary,
then no amount is required to be
distributed to satisfy the applicable
enumerated section in paragraph (b) of
this section until the end of the calendar
year that includes the tenth anniversary
of the date of the employee’s death. For
the calendar year that includes the tenth
anniversary of the date of the
employee’s death, the amount required
to be distributed to satisfy the
applicable enumerated section is the
payee’s entire remaining interest in the
annuity contract.
(5) Plans providing uniform required
beginning date. Rules similar to the
rules of paragraph (c)(4) of this section
(relating to plans that have adopted a
uniform required beginning date) apply
in the case of a defined benefit plan.
(e) Distribution of remaining benefit
after deadline for required distribution.
If there is any remaining benefit with
respect to an employee (or IRA owner)
after the calendar year in which the
entire remaining benefit is required to
be distributed, the required minimum
distribution for each calendar year
subsequent to that calendar year is the
entire remaining benefit. Thus, for
example, if the designated beneficiary of
the employee is not an eligible
designated beneficiary, then, pursuant
to § 1.401(a)(9)–5(e)(2), the entire
interest of the employee must be
distributed no later than the end of the
calendar year that includes the tenth
anniversary of the date of the
employee’s death, and the required
minimum distribution for that calendar
year and each subsequent calendar year
is the remaining portion of the
employee’s interest in the plan.
(f) Excise tax for first distribution
calendar year. If the amount not paid is

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an amount required to be paid by April
1 of a calendar year that includes the
employee’s required beginning date, the
missed distribution is a required
minimum distribution for the previous
calendar year (that is, for the employee’s
or the individual’s first distribution
calendar year as determined in
accordance with § 1.401(a)(9)–
5(a)(2)(ii)). However, the excise tax
under section 4974 is calculated with
respect to the calendar year that
includes the last day by which the
amount is required to be distributed
(that is, the calendar year that includes
the employee’s or individual’s required
beginning date) even though the
preceding calendar year is the calendar
year for which the amount is required
to be distributed. There is also a
required minimum distribution for the
calendar year that includes the
employee’s or individual’s required
beginning date, and that distribution is
also required to be made during the
calendar year that includes the
employee’s or individual’s required
beginning date.
(g) Waiver of excise tax—(1) General
rule. The tax under paragraph (a) of this
section may be waived if the payee
establishes to the satisfaction of the
Commissioner that—
(i) The failure to distribute the
required minimum distribution
described in this section was due to
reasonable error; and
(ii) Reasonable steps are being taken
to remedy the failure.
(2) Automatic waiver after election to
distribute within 10 years of employee’s
death. Unless the Commissioner
determines otherwise, the tax under
paragraph (a) of this section is waived
automatically if—
(i) The employee’s or individual’s
death is before the employee’s or
individual’s required beginning date;
(ii) The payee is an individual—
(A) Who is an eligible designated
beneficiary (as defined in § 1.401(a)(9)–
4(e));
(B) Whose required minimum
distribution amount for a calendar year
is determined under the life expectancy
rule described in § 1.401(a)(9)–3(c)(4);
and

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(C) Who did not make an affirmative
election to have the life expectancy rule
apply as described in § 1.401(a)(9)–
3(c)(5)(iii);
(iii) The payee fails to satisfy the
minimum distribution requirement; and
(iv) The payee elects the 10-year rule
described in § 1.401(a)(9)–3(c)(3) by the
end of the ninth calendar year following
the calendar year of the employee’s
death.
(3) Automatic waiver for failure to
take required minimum distribution for
the year of death. Unless the
Commissioner determines otherwise,
the tax under paragraph (a) of this
section is waived automatically if—
(i) A distribution is required to be
made to an individual under
§ 1.401(a)(9)–3 or § 1.401(a)(9)–5 in a
calendar year;
(ii) The individual who was required
to take the distribution described in
paragraph (g)(3)(i) of this section died in
that calendar year without satisfying
that distribution requirement; and
(iii) The beneficiary of the individual
described in paragraph (g)(3)(ii) of this
section takes a corrective distribution in
the amount needed to satisfy that
distribution requirement no later than
the tax filing deadline (including
extensions thereof) for the taxable year
of that beneficiary that begins with or
within that calendar year (or, if later, the
last day of the calendar year following
that calendar year).
(h) Applicability date. This section
applies for taxable years beginning on or
after January 1, 2025. For earlier taxable
years, the rules of 26 CFR 54.4974–2 (as
it appeared in the April 1, 2023, edition
of 26 CFR part 54) apply.
§ 54.4974–2

[Removed]

Par. 14. Section 54.4974–2 is
removed.

■

Douglas W. O’Donnell,
Deputy Commissioner.
Approved: May 31, 2024.
Aviva R. Aron-Dine,
Acting Assistant Secretary of the Treasury
(Tax Policy).
[FR Doc. 2024–14542 Filed 7–18–24; 8:45 am]
BILLING CODE 4830–01–P

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