Title: Required Minimum Distribution Modernization Act of 2020
Policy area: Taxation

Summary:
Required Minimum Distribution Modernization Act of 2020
This bill revises rules requiring mandatory minimum distributions from tax-exempt retirement plans. Specifically, it increases from 72 to 75 the age at which plan participants must being making distributions from their accounts. It also exempts defined contribution plans from mandatory distribution requirements if the aggregate value of an employee's entire interest in all such plans does not exceed $100,000.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8567 Introduced in House (IH)]

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116th CONGRESS
  2d Session
                                H. R. 8567

   To amend the Internal Revenue Code of 1986 to increase to 75 the 
required beginning date age for mandatory retirement distributions and 
 to exempt from such distribution rules individuals with lower account 
                               balances.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 9, 2020

   Mrs. Murphy of Florida (for herself and Mr. Estes) introduced the 
 following bill; which was referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
   To amend the Internal Revenue Code of 1986 to increase to 75 the 
required beginning date age for mandatory retirement distributions and 
 to exempt from such distribution rules individuals with lower account 
                               balances.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Required Minimum Distribution 
Modernization Act of 2020''.

SEC. 2. INCREASE IN AGE FOR REQUIRED BEGINNING DATE FOR MANDATORY 
              DISTRIBUTIONS.

    (a) In General.--Section 401(a)(9)(C)(i)(I) of the Internal Revenue 
Code of 1986 is amended by striking ``age 72'' and inserting ``age 
75''.
    (b) Spouse Beneficiaries; Special Rule for Owners.--Subparagraphs 
(B)(iv)(I) and (C)(ii)(I) of section 401(a)(9) of such Code are each 
amended by striking ``age 72'' and inserting ``age 75''.
    (c) Conforming Amendments.--The last sentence of section 408(b) of 
such Code is amended by striking ``age 72'' and inserting ``age 75''.
    (d) Effective Date.--The amendments made by this section shall 
apply to distributions required to be made after December 31, 2020, 
with respect to individuals who attain age 72 after such date.

SEC. 3. EXEMPTION FROM REQUIRED MINIMUM DISTRIBUTION RULES FOR 
              INDIVIDUALS WITH CERTAIN ACCOUNT BALANCES.

    (a) In General.--Section 401(a)(9) of the Internal Revenue Code of 
1986 is amended by adding at the end the following new subparagraph:
                    ``(J) Exception from required minimum distributions 
                during life of employee where assets do not exceed 
                $100,000.--
                            ``(i) In general.--If, as of a measurement 
                        date, the aggregate value of an employee's 
                        entire interest under all defined contribution 
                        plans does not exceed $100,000, then, during 
                        any succeeding calendar year beginning before 
                        the next measurement date, the requirements of 
                        subparagraph (A) shall not apply with respect 
                        to such employee.
                            ``(ii) Defined contribution plan.--For 
                        purposes of this subparagraph, the term 
                        `defined contribution plan' has the same 
                        meaning as when used in subparagraph (H).
                            ``(iii) Limit on required minimum 
                        distribution.--The required minimum 
                        distribution determined under subparagraph (A) 
                        for an employee under all defined contribution 
                        plans shall not exceed an amount equal to the 
                        excess of--
                                    ``(I) the aggregate value of an 
                                employee's entire interest under such 
                                plans on the last day of the calendar 
                                year to which such distribution 
                                relates, over
                                    ``(II) the dollar amount in effect 
                                under clause (i) for such calendar 
                                year.
                        The Secretary in regulations or other guidance 
                        may provide how such amount shall be 
                        distributed in the case of an individual with 
                        more than one defined contribution plan.
                            ``(iv) Measurement date.--For purposes of 
                        this subparagraph, the term `measurement date' 
                        means, with respect to any employee--
                                    ``(I) the last day of the calendar 
                                year preceding the calendar year in 
                                which the employee attains age 75, and
                                    ``(II) in the case of any employee 
                                who (after a measurement date 
                                determined under subclause (I) with 
                                respect to such employee) receives 
                                contributions, rollovers, or transfers 
                                of amounts that were not previously 
                                taken into account in applying this 
                                subparagraph, the last day of the 
                                calendar year in which such 
                                contribution, rollover, or transfer was 
                                so received.
                            ``(v) Inflation adjustment.--In the case of 
                        any calendar year beginning after 2020, the 
                        $100,000 amount in clause (i) shall be 
                        increased by an amount equal to--
                                    ``(I) such dollar amount, 
                                multiplied by
                                    ``(II) the cost of living 
                                adjustment determined under section 
                                1(f)(3) for the calendar year, 
                                determined by substituting `calendar 
                                year 2019' for `calendar year 2016' in 
                                subparagraph (A)(ii) thereof.
                        Any increase determined under this clause shall 
                        be rounded to the next lowest multiple of 
                        $5,000.
                            ``(vi) Plan administrator reliance on 
                        employee certification.--A defined contribution 
                        plan described in clause (iii), (iv), (v), or 
                        (vi) of section 402(c)(8)(B) shall not be 
                        treated as failing to meet the requirements of 
                        this paragraph in the case of any failure to 
                        make a required minimum distribution for a 
                        calendar year if--
                                    ``(I) the aggregate value of an 
                                employee's entire interest under all 
                                defined contribution plans of the 
                                employer on the last day of the 
                                calendar year to which such 
                                distribution relates does not exceed 
                                the dollar amount in effect for such 
                                year under clause (i), and
                                    ``(II) the employee certifies that 
                                the aggregate value of the employee's 
                                entire interest under all defined 
                                contribution plans on the most recent 
                                measurement date with respect to the 
                                employee (as determined by the employee 
                                based on guidance provided by the 
                                Secretary) did not exceed the dollar 
                                amount in effect for such year under 
                                clause (i).
                            ``(vii) Aggregation rule.--All employers 
                        treated as a single employer under subsection 
                        (b), (c), (m), or (o) of section 414 shall be 
                        treated as a single employer for purposes of 
                        clause (v).''.
    (b) Plan Administrator Reporting.--Section 6047 of such Code is 
amended by redesignating subsection (h) as subsection (i) and by 
inserting after subsection (g) the following new subsection:
    ``(h) Account Balance for Participants Who Have Attained Age 74.--
            ``(1) In general.--Not later than January 31 of each year, 
        the plan administrator (as defined in section 414(g)) of each 
        defined contribution plan (as defined in section 401(a)(9)(J)) 
        shall make a return to the Secretary with respect to each 
        participant of such plan who has attained age 74 as of the end 
        of the preceding calendar year which states--
                    ``(A) the name and plan number of the plan,
                    ``(B) the name and address of the plan 
                administrator,
                    ``(C) the name, address, and taxpayer 
                identification number of the participant, and
                    ``(D) the account balance of such participant as of 
                the end of the preceding calendar year.
            ``(2) Statement furnished to participant.--Every person 
        required to make a return under paragraph (1) with respect to a 
        participant shall furnish a copy of such return to such 
        participant.
            ``(3) Application to individual retirement plans and 
        annuities.--In the case of an defined contribution plan 
        described in clause (i) or (ii) of section 402(c)(8)(B)--
                    ``(A) any reference in this subsection to the plan 
                administrator shall be treated as a reference to the 
                trustee or issuer, as the case may be, and
                    ``(B) any reference in this subsection to the 
                participant shall be treated as a reference to the 
                individual for whom such account or annuity is 
                maintained.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to distributions required to be made in calendar years beginning 
more than 120 days after the date of the enactment of this Act.
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