Memorandum  PERAC Memo #03: Required Minimum Distribution: Now Age 73 for This Year’s Notifications

Date:	01/09/2024
Referenced Sources:	PERAC Website

PERAC Memo #03, 2024

To All Retirement Boards:

TO:                        All Retirement Boards

FROM:                   John W. Parsons, Esq., Executive Director

RE:                         Required Minimum Distribution: Now Age 73 for This Year’s Notifications

DATE:                   January 9, 2024

The enactment of G.L. c. 32, § 12D (Section 15 of Chapter 21 of the Acts of 2009) brought the Massachusetts Retirement Systems into compliance with the federal requirement that persons who attained age 70½ who were not receiving a retirement allowance and who were not employed by a governmental unit sponsoring the Retirement System in which they are a member must begin taking a distribution from the System by April 1 of the year following the year they attain age 70½.

On December 20, 2019, the Setting Every Community Up for Retirement Enhancement Act of 2019 (“Secure Act”) was signed into law and updated the age for required minimum distributions for calendar years 2021 and 2022.  If a member reached the age of 70½ in January 2020 or later, born after June 30, 1949, they were required to take their first minimum distribution by April 1 of the year after they reach age 72.  The old rule continued for members that already reached age 70½ prior to January 1, 2020 (born on or before June 30, 1949).

On December 29, 2022, the Secure 2.0 Act was signed into law and further updated the age for required minimum distributions for calendar year 2023.  If a member reached the age of 72 in January 2023 or later, born on or after January 1, 1951, they are now required to take their first minimum distribution by April 1 of the year after they reach age 73.  Attached is a sample letter that Boards can use to advise affected members of this requirement.

The options available to these members can be quite complicated, especially those provisions that apply to rollovers.  As a result, we are suggesting that the members be urged to contact the Board for counseling.  We do not suggest that a set of all the possible forms be sent to members without either formal counseling or a specific request.

The initial distribution to all persons who have attained age 73 during calendar year 2023 (or who turned 72 in 2022) must be made by April 1, 2024, so we recommend that the notices be sent out to these members as soon as possible.  Boards may wish to send follow-up notices or make other efforts to contact members who do not respond in a timely manner.

If you have questions, please feel free to contact Associate General Counsel Felicia McGinniss at [phone].

Attachment