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Are you prepared for 2025 Required Minimum Distributions?

Updated: Apr 3

The time to act is now. What should you do?

Participants who turn 73 in 2024 must commence Required Minimum Distributions (RMDs) from their employer retirement plans by April 1, 2025, unless they are still working and the plan allows them to continue to defer. Plan participants face steep penalties if they miss this deadline—25% of the missed distribution amount or 10% if corrected within two years. Plan administrators are the first line of defense in ensuring participant and plan compliance. The time to act is now. What should you do?

 

RETIREMENT PLAN ADMINISTRATORS

Incorporate proactive measures into your administrative procedures to ensure timely RMD payments:

  • Identify those due to start RMDs on April 1 (and those who may have missed their RMD deadline in prior years),

  • Conduct a paid search to locate missing participants,

  • Determine the distributable amount, and

  • Complete the communication, election, and payment process.

 

PARTICIPANTS

If you turned in 2024 or any prior year, reach out to the HR/benefits administrative staff from your prior employer ASAP to inquire about starting your RMD payments. Their contact information is available in the Annual Funding Notice you receive every year, and in the Summary Plan Description.

Be prepared with the following:

• A copy of your birth certificate and driver’s license

• If married, a copy of your marriage license and your spouse’s birth certificate

 

A few other tips to keep in mind:

  • Participants who miss receiving their first distribution by their Required Beginning Date may owe excise taxes on the amounts not paid out timely unless the IRS agrees to waive them when you report the missed distributions with your income tax filing.

  • RMD payments are not eligible for rollover to an IRA. If benefits are distributed in a single lump sum, a portion must be distributed and taxed in 2025.

  • If RMDs are paid in installments (for example, from a 401(k) plan), the first payment made by April 1, 2025 is the 2024



 
 
 

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