IRS Notice 2009-82
L1: IRS Notice 2009-82Further to the post by sdh on 9/25,my understanding on this question is just
as stated, and confirmed by Q&A 9 in the Notice; however, in reading the
full text of the Notice, I’m curious about the first paragraph of Art. IV of the
Notice (Transition Relief), which states:
“A plan will not be treated as failing to satisfy the requirement that it be
operated in accordance with its terms merely because, during the period
beginning on January 1, 2009, and ending on November 30, 2009: (1)
distributions that equal the 2009 RMDs or
that are one or morepayments in a series of substantially equal
distributions (that include the 2009 RMDs) made at least annually
and expected to last for the life (or life expectancy) of the participant, the
joint lives (or joint life expectancy) of the participant and the participant’s
designated beneficiary, or for a period of at least 10 years were or
were not paid …”
Does this mean that if you did not (or do not) make an otherwise required
SEPP distribution under a 72t plan from Jan 1 – Nov 30, 2009, you will not have
busted the SEPP? If so, could I skip a payment under my SEPP Plan otherwise due
to be made before Nov. 30? Also, under this reasoning, could I return earlier
SEPP Plan distributions made this year (which were made +60 days ago)? My SEPP
Plan dates from 2001 and operates under the annuity method.
This allseems to contradict Q&A 9 as well as other advice I’ve received,
but I must be missing something here…2009-09-29 04:56, By: sodel, IP: [188.8.131.52]
L2: IRS Notice 2009-82You are merely reading too much into the paragraph that you placed in quotes – probably because you are looking for an answer that you want.
By definition, post age 70 Required Minimum Distributions [RMD] are part of a series of substantually equal payments made over the remaining life expectancy.
If you do not take the planned annual distribution from your SEPP plan in 2009 you will indeed bust your plan. The wiaver does not apply to SEPP plans. Neither does the recently announced rollback of the of the of the post age 70 RMD for 2009.
2009-09-29 10:37, By: Gfw, IP: [184.108.40.206]
L3: IRS Notice 2009-82As a matter of fact, the IRS anticipated this question, and issued specific commentary that 2009-82 did not allow SEPP 72-T plans to skip payments in 2009.2009-09-29 15:46, By: dlzallestaxes, IP: [220.127.116.11]
L4: IRS Notice 2009-82My guess is that the IRS reference to substantially equal payments in 2009-82 was included to address retirement plan annuitized payouts started at 70.5 or prior to 70.5 that meet the requirements of an RMD under Sec 401(a)9. In some cases, these payments could be rolled over.
But as stated by previous posts, there isNO relief for SEPP distributions. They cannot be rolled over and also cannot be suspended in the first place, other than for the usual reasons of death or disability.2009-09-29 18:55, By: Alan S., IP: [18.104.22.168]
L5: IRS Notice 2009-82If you want to read IRS Notice 2009-82
2009-09-29 19:31, By: Gfw, IP: [22.214.171.124]
L6: IRS Notice 2009-82Thanks for the clarification … I was sure this was the right answer … I just found the language confusing.
I still believe it horribly unfair for Congress to have excluded SEPP’s from the temporary relief given to other IRA’s last year… I guess the “SEPP lobby” just doesn’t have enough clout on the Hill ;)2009-10-02 04:53, By: sodel, IP: [126.96.36.199]
L7: IRS Notice 2009-82Part of their thinking might have been that there was already substantial relief for those that do not need the current level of distributions to live on via the one time switch to the RMD method. Moreover, the 40-50% reduction typical of the switch assumes a stable account value. If you have an account value that took a 50% hit, then the switch will result in a reduction in the 70-75% area. And for those few using the MD method to begin with, their distribution would be reduced around 50% automatically. So perhaps Congress figured that there really was not much of a need to fully waive SEPP payments for a year. 2009-10-02 17:53, By: Alan S., IP: [188.8.131.52]
L5: IRS Notice 2009-82You are right Alan. It is in reference to SEPPs for ten or more years-from Employer plans.
The notice addressed this question specificcially, saying that it does not apply to such payments. See Q&A 9
2009-10-02 21:51, By: Denise Appleby, IP: [184.108.40.206]