# Bulletin No. 2024–33

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URL: https://www.frixlaw.com/law-library/documents/agency%3Airs%3Aedf203719d44758e

## Record

- **Collection:** Agency decision
- **Document type:** Agency decision

## Text

HIGHLIGHTS
OF THIS ISSUE




Bulletin No. 2024–33
August 12, 2024

These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.

EMPLOYEE PLANS, EXCISE TAX,
INCOME TAX
REG-103529-23, page 512.

These proposed regulations would address various provisions that are reserved in the final regulations under Code
sections 401(a)(9) and 402(c) in Treasury Decision 10001
(TD 10001), which is being published simultaneously with
these proposed regulations. The reserved provisions in TD
10001 which these proposed regulations would address
reflect the following 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), to the extent they
are not addressed in TD 10001: 107 (increase in age for
required beginning date for mandatory distributions), 202
(qualifying longevity annuity contracts), 204 (eliminating a
penalty on partial annuitization of an employee’s individual
account under a defined contribution plan), 302 (reduction
in excise tax on certain accumulations in qualified retirement
plans), 325 (Roth plan distribution rules), and 327 (surviving
spouse election to be treated as employee). In addition,
these proposed regulations would provide guidance relating
to provisions in TD 10001 permitting separate application
of section 401(a)(9) with respect to multiple beneficiaries of
a see-through trust.

T.D. 10001, page 412.

These regulations provide guidance related to section 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 of 2019, Pub. L. 116-94, 133 Stat. 2534
(2019), and by section 107 and various other 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, 2022, Public Law 117-328, 136
Stat. 4459 (2022). Section 107 of the SECURE 2.0 Act
increased the mandatory age by which distributions from
Finding Lists begin on page ii.

a retirement plan are required to begin and section 401 of
the SECURE Act limits the ability of designated beneficiaries to take distributions over their life expectancies unless
they meet certain exceptions. In addition, the regulations
will clarify certain issues related to trusts as beneficiaries
and situations under which a beneficiary is identifiable for
purposes of section 401(a)(9) of the Code. These regulations also provide guidance related to eligible rollover distributions under section 402(c) reflecting statutory changes
to that section since regulations were first issued in 1995.
Many rules in existing final regulations are restated without
change to satisfy Federal Register requirements.

INCOME TAX
REG-102161-23, page 502.

This document contains proposed regulations that would
identify transactions that are the same as, or substantially similar to, certain basket contract transactions as
listed transactions for purposes of §1.6011-4. Material
advisors with respect to and certain participants in these
listed transactions would be required to file disclosures
with the IRS and would be subject to penalties for failure
to disclose.

T.D. 10004, page 489.

This document contains final regulations regarding the treatment of property used to acquire parent stock or securities
in connection with certain triangular reorganizations involving one or more foreign corporations; the consequences
to persons that receive parent stock or securities pursuant
to such reorganizations; and the treatment of certain subsequent inbound nonrecognition transactions following such
reorganizations and certain other transactions. The final regulations affect corporations engaged in certain triangular
reorganizations involving one or more foreign corporations,
certain shareholders of foreign corporations acquired in such
reorganizations, and foreign corporations that participate in
certain inbound nonrecognition transactions.

The IRS Mission
Provide America’s taxpayers top-quality service by helping
them understand and meet their tax responsibilities and
enforce the law with integrity and fairness to all.

Introduction
The Internal Revenue Bulletin is the authoritative instrument
of the Commissioner of Internal Revenue for announcing official rulings and procedures of the Internal Revenue Service
and for publishing Treasury Decisions, Executive Orders, Tax
Conventions, legislation, court decisions, and other items of
general interest. It is published weekly.
It is the policy of the Service to publish in the Bulletin all substantive rulings necessary to promote a uniform application
of the tax laws, including all rulings that supersede, revoke,
modify, or amend any of those previously published in the
Bulletin. All published rulings apply retroactively unless otherwise indicated. Procedures relating solely to matters of internal management are not published; however, statements of
internal practices and procedures that affect the rights and
duties of taxpayers are published.
Revenue rulings represent the conclusions of the Service
on the application of the law to the pivotal facts stated in
the revenue ruling. In those based on positions taken in rulings to taxpayers or technical advice to Service field offices,
identifying details and information of a confidential nature are
deleted to prevent unwarranted invasions of privacy and to
comply with statutory requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned

against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—1986 Code.
This part includes rulings and decisions based on provisions
of the Internal Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions and Other Related Items, and Subpart B,
Legislation and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative
Rulings. Bank Secrecy Act Administrative Rulings are issued
by the Department of the Treasury’s Office of the Assistant
Secretary (Enforcement).
Part IV.—Items of General Interest.
This part includes notices of proposed rulemakings, disbarment and suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index
for the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.

The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.

August 12, 2024 

Bulletin No. 2024–33

Part I
26 CFR 1.401(a)(9)-0 through 26 CFR 1.401(a)(9)9; 26 CFR 1.402(c)-2; 26 CFR 1.403(b)-6; 26 CFR
1.457-6; 26 CFR 1.408-8; 26 CFR 54.4974-1

T.D. 10001
DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Parts 1, 31, and 54
Required Minimum
Distributions
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final regulations.
SUMMARY: 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).

August 12, 2024

SUPPLEMENTARY INFORMATION:
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, Pub. L. 116-94, 133 Stat. 2534
(2019) and by 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, Pub. L. 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

412

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 5 years after the
death of the employee; or (2) distributed
(in accordance with 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

Bulletin No. 2024–33

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 70½ 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 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 years after the death of the
eligible designated beneficiary.
Section 401(a)(9)(H)(iv) provides that
in the case of an applicable multi-benefi-

ciary 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 multi-beneficiary 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

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.

Bulletin No. 2024–33

413

August 12, 2024

part of a defined 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 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).
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 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 sec-

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.
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.
2

August 12, 2024

414

Bulletin No. 2024–33

tion 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. 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, Pub. L. 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, Pub. L.
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 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, Pub. L. 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 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.

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.
4

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August 12, 2024

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, Pub. L. 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), 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)

August 12, 2024

(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 tax imposed under section 4974(a) is 10 percent of the shortfall

416

(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.
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

Bulletin No. 2024–33

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 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 (REG103529-23) 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.

5

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 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 benefi-

ciary, 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 those
beneficiaries dies. Thus, for example, if
an employee who died before January 1,
2020, named a see-through 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.

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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August 12, 2024

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.
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 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 70½; (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 70½ 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 retired for purposes of section 401(a)
(9)(C)(i)(II) in this situation.

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.
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.
6

August 12, 2024

418

Bulletin No. 2024–33

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) per-

mit 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 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 desig-

nated 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 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 long-continued and indefinite duration.
These regulations also provide a safe
harbor for the determination of whether

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 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.
8

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August 12, 2024

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 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

August 12, 2024

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 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

420

self-certifications from a designated beneficiary (or, in the case of a see-through
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 self-certification 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 self-certification 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 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.

Bulletin No. 2024–33

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 seethrough 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 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 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 seethrough 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 see-through 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 see-through
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

For purposes of this rule, a beneficiary is treated as having predeceased the employee if the beneficiary is treated as predeceasing the employee pursuant to a simultaneous death provision
under applicable State law or a qualified disclaimer satisfying section 2518 that applies to the entire interest to which the beneficiary is entitled.
9

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August 12, 2024

trust beneficiary. In those cases, the trust
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 seethrough 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

August 12, 2024

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 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.

422

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 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 seethrough 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 multi-beneficiary
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 pro-

Bulletin No. 2024–33

vide 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 multi-beneficiary trust.
This is because, as described in section
I.H of this Summary of Comments and
Explanation of Revisions, the final regulations 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 multi-beneficiary 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 multi-beneficiary 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 multi-beneficiary 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
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.
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 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 sec-

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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August 12, 2024

tion 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 5-year
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).

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 require-

ment. 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 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 202354, 2023-31 IRB 382, and Notice 202435, 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

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.
11

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424

Bulletin No. 2024–33

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 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.
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 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 multi-beneficiary 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.

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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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 (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).
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 organization.
However, it would be appropriate to treat
a plan for self-employed individuals who

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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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 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
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

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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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 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.
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 inflation-adjusted 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 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 report-

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.
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

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Airs%3Aedf203719d44758e. Public record. Not legal advice.