As the December 31, 2026, deadline approaches for adopting Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act) and SECURE 2.0 Act of 2022 (SECURE 2.0) amendments to defined benefit (DB) and other workplace retirement plans, plan sponsors must work with their plan service providers to review and update their plan provisions to ensure compliance. One critical decision for DB plan sponsors is whether to retain a required start date (RSD) for benefit distributions—such as age 70½—that is earlier than the new later statutory required beginning date (RBD) for required minimum distributions (RMDs), which has been raised to age 72, 73, and 75 depending on the participant’s birth date and year.

On the surface, this may seem like a minor administrative decision. However, the decision impacts many aspects of the DB plan, including actuarial calculations, participant communications, legal documentation, ongoing administration—and in some cases, even the tax treatment—in ways that warrant careful attention. In this article, we will discuss how the RMD age has changed, why DB plan sponsors may want to retain an earlier RSD, the changes that may be needed if the RSD is earlier than the statutory RBD, and the implications of doing so.

How the required minimum distribution age changed under SECURE Act and SECURE 2.0

Depending on the terms of the plan document, for most plan participants the statutory RBD is the April 1 following the later of the calendar year in which the participant attains the applicable RMD age or retires. For 5% owners, it is the April 1 following the calendar year in which they attain the applicable RMD age, regardless of their employment status. Figure 1 shows how the applicable RMD age has changed.

*The proposed RMD regulations clarify that the applicable RMD age for individuals born in 1959 is age 73.

Why age 70½ still matters for defined benefit plans

While the SECURE Act and SECURE 2.0 raised the statutory RMD ages, they did not change the age at which required actuarial increases apply to DB plan benefits of participants who delay commencement of their benefits. Under the final RMD regulations, DB plans are still required to actuarially increase vested benefits of non-5% owners¹ beginning April 1 following the calendar year in which a participant attains age 70½ through the date on which benefits commence in an amount sufficient to satisfy the RMD rules, even though the statutory RBD may now be later. This requirement applies regardless of whether the DB plan provided the participant a suspension of benefits notice.²

If the DB plan’s RSD matches the statutory RBD, then the vested benefit of a participant whose benefit commences at a statutory RMD age that is later than 70½ (i.e., a participant who was born on or after July 1, 1949, per Figure 1) must be actuarially increased from age 70½ onward. Depending on the plan's actuarial assumptions, this can result in a significant increase in the participant’s benefit and thus the plan's benefit obligation.

In addition, these required actuarial increases may cause certain participants’ benefits to exceed the Internal Revenue Code (IRC) Section 415 limit, requiring the plan to restrict the benefit payable. This is most likely to occur when a participant has relatively low high-three-year average compensation and continues working well past age 70½—or normal retirement age (NRA), if actuarial increases start then. The Section 415 compensation-based limit, which is generally 100% of the participant’s high-three-year average compensation, is not actuarially increased to reflect the later benefit start date. See this article for a discussion and illustration of how the IRC Section 415 compensation limit works.

Defined benefit plans may retain a required start date earlier than the statutory required beginning date

The IRS has confirmed in the final regulations that plans may retain an RSD earlier than the new statutory RBD. For example, a plan could require participants to begin receiving benefits at age 70½, at NRA, or at some other age after the NRA but earlier than the statutory RMD age.

The primary motivation for doing this is straightforward: By requiring distributions to begin at age 70½ (or earlier), the plan eliminates the administrative and financial burden of tracking and applying actuarial increases for active or deferred vested participants who have reached that age but not yet commenced benefits.

The IRS is equally clear that distributions made before the statutory RBD are not considered RMDs. This distinction—between a plan’s RSD and the statutory RBD—creates an administrative environment that requires careful and deliberate management.

How an earlier required start date impacts defined benefit plan administration

When a plan's RSD is earlier than the statutory RBD, the plan is operating with two different reference points simultaneously:

• The plan's RSD (e.g., age 70½)—the date by which the plan requires distributions to begin, driven typically by the desire to avoid actuarial increases
• The statutory RBD (e.g., age 72, 73, or 75)—the date established by law that governs RMD rules, whether a lump-sum payment is eligible for rollover, post-death distribution rules, and excise tax obligations

This disconnect has cascading implications across virtually every aspect of plan administration. The following documents should be reviewed and updated as necessary for consistency with the decisions a DB plan sponsor makes regarding the plan’s RSD and the distinction compared to the statutory RMD if different.

• Plan document.
• Summary plan description (SPD).
• Participant communications and election forms. This includes pre-retirement communications (e.g., letters sent to participants approaching retirement age), rollover notices and election forms, surviving spouse election forms, and suspension of benefits notices.

The provisions within these documents that require review and amendment include:

• Clearly defining the plan's RSD separately from the statutory RBD if different. The age at which the plan requires distributions to begin should be specified (e.g., age 70½ or NRA, if earlier) and distinguished from the statutory RBD.
• Clarifying that earlier distributions are not RMDs. Acknowledge that distributions commencing before the statutory RBD do not constitute RMDs and therefore may be eligible for rollover to another tax-deferred retirement plan or account.
• Addressing the actuarial increase provisions explicitly. The actuarial increase methodology should be described, including the age at which increases begin (70½) and the conditions under which increases apply or do not apply (e.g., for 5% owners).
• Addressing the surviving spouse election under Section 327 of SECURE 2.0, which allows a surviving spouse who is the sole beneficiary to elect to be treated as the participant for RMD purposes, potentially deferring distributions until the participant would have reached the statutory RMD age.
• Addressing how the return-to-work rules apply. If specified in the terms of the plan document, a participant’s benefit may be suspended if the participant is still working for the DB plan sponsor after NRA, or if the participant retires and commences benefits and then returns to work before the statutory RBD. These provisions should be reviewed to ensure they clearly describe how the suspension of benefits rules operate when the DB plan uses an RSD earlier than the statutory RMD.
• Updating descriptions of the excise taxes for not receiving RMDs timely to reflect the reduced penalty rates under SECURE 2.0 and the correction window (25% generally, reducible to 10% if corrected within the correction window).

In addition, the plan’s internal actuarial and administrative procedures will need to be reviewed and updated, including procedural updates for the following:

• Tracking participants approaching age 70½. The plan administrator must maintain a system to identify participants who are approaching age 70½ and have not yet commenced benefits so that actuarial increases can be calculated and applied correctly.
• Calculating actuarial increases. The plan's actuary must establish and document the methodology for calculating actuarial increases, including the actuarial assumptions to be used (interest rate, mortality table).
• Distinguishing pre-RBD and post-RBD distributions for rollover purposes. The plan administrator must track whether each potentially rollover eligible distribution (e.g., a lump-sum distribution) is made before or after the statutory RBD to correctly determine rollover eligibility and provide accurate rollover notices.
• Administering the correction window for missed RMDs. The plan administrator must have procedures in place to identify missed RMDs, calculate the excise tax (25%, or 10% if corrected within the correction window), and process corrective distributions.
• Tracking participants who are working beyond the RSD. Plan administrators should carefully track participants who return to work, determine whether they are past the plan’s RSD or their applicable statutory RBD, and apply the return-to-work and, if applicable, the plan’s suspension-of-benefits rules accordingly.

Advantages and disadvantages of retaining an early required start date for defined benefit plans

Given the administrative complexities of maintaining a RSD that is earlier than the statutory RBD, plan sponsors should carefully weigh the advantages and disadvantages before deciding whether to retain this approach.

SECURE Act and SECURE 2.0 amendment deadlines

Operationally, the final RMD regulations generally apply for distribution calendar years beginning on or after January 1, 2025. For earlier years, plans were permitted to operate based on a reasonable, good faith interpretation of the SECURE Act and SECURE 2.0 statutory changes.

Notice 2024-2 extended the deadline for plan sponsors to adopt required and discretionary plan amendments related to the SECURE Act and SECURE 2.0. For plans that are not governmental and collectively bargained, these amendments generally must be adopted by December 31, 2026.

Our bulletin summarizing the final RMD regulations can be found here.

Our bulletin summarizing Notice 2024-2 can be found here.

Our bulletin summarizing Notice 2025-60 can be found here.

Please contact your Milliman consultant to discuss how retaining an RSD that is earlier than the new later statutory RMD ages may impact your specific plan and to develop a tailored action plan for compliance.

¹ Actuarial increases do not apply to 5% owners, to DB plans sponsored by governmental entities, or to church plans as defined in IRC Section 3121(w).

² A suspension of benefits notice informs participants that their benefit payments have been suspended, explains why the suspension occurred, and identifies the plan provisions that permit it. The notice may also state that benefits suspended after NRA will not receive an actuarial increase during the suspension period. These notices are commonly issued when a retiree returns to work or when a participant keeps working past NRA for the same employer—or, in a multiemployer plan, in the same industry, trade or craft, and geographic area.