Required Minimum Distribution (RMD) Question
Rev. 11/21/08; E-mail Alert 2008-15

Many of our clients’ customers are wondering if RMDs must be made for 2008. The answer is yes. There have been no changes in the law regarding RMDs, so they must be made.

Note that the charitable donation from an IRA of up to $100,000 to a qualified charitable organization may be made for 2008 and 2009 by individuals who are 70 1/2 or older, and that that amount may be used to satisfy an RMD from an IRA as this Pension Protection Act provision (which had been set to expire December 31, 2007) was extended by the Emergency Economic Stabilization Act of 2008 until December 31, 2009.

As we finalized this brief article, Senator Kennedy and Colleagues issued a press release regarding new proposed legislation which includes a provision that for 2009 there be a one-year moratorium on Required Minimum Distributions from IRAs. Note that this is a bill at this point and not a law change. We will keep you informed if this does become law. Click here for the press release.

We have received reports that some of our clients' customers are afraid that Congress is going to eliminate 401(k) plans. No legislation has been enacted to abolish 401(k)s nor does this seem probable. It would seem likely that additional fee and expense disclosure legislation and regulation and, as always, the protection of an employee's benefits are among the directions in which Congress is heading. As these and other proposals develop, we will keep you posted.