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RMD Exam Relief Extended to 403(b)s

The IRS has sent a field directive to exam agents that expands to 403(b) plans the scope of an earlier directive instructing examiners to not challenge a qualified plan for violating applicable required minimum distribution (RMD) standards if a plan has taken certain steps.

The IRS Employee Plans Examinations Office on Feb. 23, 2018 sent the directive expanding the relief to 403(b) plans. The EP Office sent the original directive on Oct. 19, 2017.

The IRS explains that the Oct. 19 directive instructs EP examiners not to challenge a qualified plan for failing to begin or make an RMD to a missing participant or beneficiary if the plan has taken the following steps:

  • searched plan and related plan, sponsor and publicly available records or directories for alternative contact information;

  • used any of these search methods:

1. a commercial locator service;
2. a credit reporting agency; or
3. a proprietary internet search tool for locating individuals; and

  • attempted contact via U. S. Postal Service certified mail to the last known mailing address and through appropriate means for any address or contact information (including email addresses and telephone numbers).

If a plan has not completed the steps above, EP examiners may challenge a qualified plan’s violation of the RMD standards for its failure to commence or make a distribution to a participant or beneficiary to whom a payment is due.