Legislative Report

2009 Required Minimum Distributions Waived

President Bush has signed The Worker, Retiree, and Employer Recovery Act (H.R. 7327) that suspends the need to take required minimum distribution (RMD) payments from defined contribution retirement plans and IRAs for the 2009 tax year. The President signed the measure on December 23, 2008, following unanimous approval in Congress earlier in the month.

Under the law, RMD payments will not be required from IRA accounts and defined contribution plans, such as 401(a), 401(k), 403(b) and governmental 457(b) plans, for 2009. Participants who attain age 70½ in 2009 (who would have previously been required to take a 2009 RMD payment by April 1, 2010) are not required to receive an RMD payment for 2009.

However, the law does not eliminate the RMD requirements for 2008. Accordingly, participants who attained age 70½ in 2008 are still required to receive an RMD payment by April 1, 2009. These individuals will not be required to receive an RMD payment for the 2009 tax year.

The Washington Perspective is a periodic online newsletter highlighting legislative and regulatory proposals affecting public sector retirement plans.

• September-October 2008
• January 2008
• November-December 2007
• June 2007
• May 2007
• February 2007
• September 2006
• June 2006

• 2009 Required Minimum Distributions Waived
  President Bush has signed The Worker, Retiree, and Employer Recovery Act (H.R. 7327) that suspends the need to take required minimum distribution (RMD) payments from defined contribution retirement plans and IRAs for the 2009 tax year. The President signed the measure on December 23, 2008, following unanimous approval in Congress earlier in the month.
• Emergency Economic Stabilization Bill Becomes Law
  The House of Representatives Friday (October 3, 2008) gave final approval of the $700 billion Emergency Economic Stabilization Act on a vote of 263 to 171. President Bush signed the legislation into law shortly after.
• Treasury Department Rolls Out Money Market Guarantee Program
  On September 29, 2008, the U.S. Department of the Treasury announced the establishment of a Temporary Guarantee Program for Money Market Funds. Under this program, Treasury will guarantee that eligible money market fund investors will receive $1 for each money market share held as of September 19, 2008. The program is designed to respond to what Treasury called "temporary dislocations in the credit markets" that came after some money market funds saw their share prices fall below $1, known as "breaking the buck."