The Coronavirus Aid, Relief and Economic Security (CARES) Act suspended required minimum distributions (RMDs) due to be made in 2020 for many retirement plans and all individual retirement accounts (IRAs). This came on the heels of the Setting Every Community Up for Retirement Enhancement (SECURE) Act, which delayed the required commencement age for participants who were not yet age 70.5 to age 72 and provided for faster payment of death benefits to many beneficiaries.
The interplay of the two new laws and the fact that the CARES Act was enacted after some 2020 RMDs had already been made has created a great deal of confusion about what is optional, what is required and whether payments already made could be reversed. However, while further guidance is expected, guidance issued by the IRS when RMDs were also suspended under a 2008 law called the Worker, Retiree and Employer Recovery Act (WRERA) provides helpful indications to plan sponsors, administrators and participants of how the new law will be applied.
