In a Law360 article on the IRS’s proposed new required minimum distributions earlier this month, writer David van den Berg spoke with Boutwell Fay LLP attorney Evan Giller, getting some clarity on the impact this new proposal could have on the future of retirement plans. Giller, who is an expert on 403(b) plans, talked about how this will affect a large amount of 403(b) plans that are written to give more power to the participants than the plan providers. These forced distributions are perhaps a way the IRS may gain more state approval.
The article also brings attention to the difficulty this may give nonprofits organized under the Internal Revenue Code Section 501(c)(3), including public schools and churches, when the new rule requires minimum distributions, which they have not had to pay before. It also should be noted that the proposed new requirements may have an impact on plans that use the safe harbor exemption from ERISA.