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For defined contribution plans, a member's interest upon death must be distributed within specified time frames depending on the type of beneficiary, as follows: * Within five years to a non-individual beneficiary; * Within 10 years to an individual designated beneficiary; and * Within 10 years to an eligible designated beneficiary unless the eligible designated beneficiary elects distributions over the beneficiary's life expectancy; provided that if the eligible designated beneficiary is a minor child, the interest must be fully distributed by age 31. Public Safety Health Insurance Premium Deductions The Final Regulations clarify that a distribution under Code Section 402(1) (distributions with respect to eligible retired public safety officers to pay health insurance premiums) will count towards the individuals RMD for the applicable year. Annuity Contract Purchased Under a Defined Contribution Plan The Final Regulations confirm that payments under an annuity contract purchased under a defined contribution plan cannot extend past the otherwise applicable full distribution deadline (i.e., for a designated beneficiary, the ten-year rule). The Proposed Regulations would establish that a distribution from a designated Roth account in a year in which the employee is required to take an RMD does not count toward the RMD requirement. [...]the Roth distribution would be eligible to be rolled over to a Roth IRA if it otherwise meets the requirements for an eligible rollover distribution.

ELIMINATION OF FIVE-YEAR REMEDIAL AMENDMENT CYCLE SYSTEM Effective January 1, 2017, the IRS eliminated the staggered, five-year remedial amendment cycle system for individually designed plans; most governmental plans are individually designed plans. [...]as of that date, the IRS will no longer accept applications for determination letters based on the five-year remedial amendment cycle system. [...]consistent with Announcement 2016-32, Treasury and the IRS recently issued an update to the Employee Plans Compliance Resolution System (EPCRS) revenue procedure with Rev. Proc. 2016-51 (issued on September 29, 2016).12 Under Rev. Proc. 2016-51, the IRS modified and superseded EPCRS and also incorporated changes that were announced with Rev. Proc. 2015-2713 (which provided certain updates regarding, in part, the correction of overpayments), and Rev. Proc. 2015-27 (which addressed the correction of failures with respect to automatic contribution failures and encouraging the early correction of employee elective deferrals).

[...]the employee could not be properly excluded from the 403(b) plan for 2013, because she worked at least 1,000 hours during the preceding 12-month exclusion period. [...]under the OIAI rule, the employee cannot be excluded from the 403(b) plan under the part-time exclusion for any year after 2012. TRANSITION RELIEF In 2015, the IRS issued sample plan document provisions - referred to as listings of required modifications or LRMs - for 403(b) plans, which made clear that the IRS interpreted Treasury Regulation 1.403(b)-5(b)(4)(iii)(B) to include the OIAI rule. Since LRMs are directed to drafters of pre-approved plans, many employers sponsoring individually designed plans were still not aware of the IRS' interpretation. [...]if Employee A started on June 1, 2015, and Employee B started on August 21, 2015, the relief period ends on May 31, 2019 for Employee A and on August 20, 2019 for Employee B. The relief provided in Notice 2018-95 applies to both operational errors and plan document errors. * Operational Errors: During the transition relief period, a plan will not be treated as failing to satisfy the conditions of the part-time employee exclusion merely for failing to apply the OIAI rule correctly. * Plan Document Errors: Sponsors of individually designed plans have until March 31, 2020 to correct errors in their plan document regarding the OIAI rule.