Clarification of substantially equal periodic payment rule

Current law imposes a 10% additional tax on early distributions from tax-preferred retirement accounts, but an exception applies to substantially equal periodic payments that are made over the account owner’s life expectancy. This provision provides that the exception...

Updating dollar limit for mandatory distributions

Under current law, employers may automatically roll over former employees’ retirement accounts from a workplace retirement plan into an IRA if their balances are between $1,000 and $5,000. The $5,000 limit will now be increased to $7,000.

Exemption for certain automatic portability transactions

Currently, in most cases, a plan may distribute a terminated participant’s account balance without their consent if the balance is under $5,000 – a “force-out” distribution. Current law also requires an employer to roll over this distribution into a default IRA if the...