The Worker, Retiree, Employer Recovery Act of 2009 permits individuals in defined contribution plans to avoid the required minimum distribution attributable to 2009. The Special Edition of the IRS’ Information for Sponsors of Retirement Plans discusses the impact of this change.
Document Excerpt
On December 23, 2008, the President signed the Worker, Retiree, and Employer Recovery Act of 2008 (the Act) into law. Section 201 of the Act waives any required minimum distribution (RMD) for 2009 from retirement plans that hold each participant’s benefit in an individual account, such as 401(k) plans and 403(b) plans, and certain 457(b) plans. The Act also waives any RMDs for 2009 from an Individual Retirement Arrangement (IRA). This means that most participants and beneficiaries otherwise required to take minimum distributions from these types of accounts are not required to withdraw any amount in 2009. If they do make a withdrawal in 2009 (that is not a RMD for 2008), they might be able to roll over the withdrawn amount into other eligible retirement plans. Of course, they must still include any previously untaxed portion of the withdrawal that they do not roll over in their gross income. See Individual Retirement Arrangements (IRAs), Publication 590, and Pension and Annuity Income, Publication 575 , for additional information on rollovers and on calculating the taxable portion of a withdrawal or distribution.The Act does not waive any 2008 RMDs, even for individuals who were eligible and chose to delay
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