Don’t Wait to Amend Your IRA Documents
If you work with IRAs, you already know that the past few years have been a whirlwind of changes. Between the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019, the SECURE 2.0 Act, and the 2024 required minimum distribution (RMD) regulations, there’s been a lot to keep up with.
In July 2024, the IRS released both proposed and final RMD regulations, which give us a clearer direction on how IRA distributions should work, especially for beneficiaries. These rules answer a lot of long-standing questions, including those on the 10-year payout rule and when distributions need to start.
Here’s the good news: you don’t technically have to amend your IRA documents until December 31, 2026 (unless the Treasury Secretary pushes that date out again). But here’s the better news: updating your IRA disclosure statement now could make life easier for you, your staff, and your account owners. Your clients are likely asking you about IRA changes that they have heard about in recent years. Providing account owners with the current IRA rules builds trust. This also demonstrates that you are looking out for their best interests by being proactive, compliant, and knowledgeable.
What the Final Regulations Clarify
The 2024 RMD regulations clear up a lot of the confusion surrounding RMDs. If you provide IRA owners with old or incomplete information, they could end up taking the wrong distribution amount, or worse, miss a deadline and face penalties. The IRS requires IRAs to be established using up-to-date documents or an appropriate amendment to supplement an older document. We update our IRA documents regularly. And to provide good customer service, your organization should amend its existing IRA disclosure statements when using updated documents to establish IRAs. This allows your new and existing IRA owners to use the same document. It also helps identify when your financial organization last amended its disclosure statement and which IRA owners received the amended document.
IRA Disclosure Statement Amendments: What’s Inside
Financial organizations aren’t required to send out updated disclosure statements that reflect the 2024 RMD regulations, but doing so is a recommended best practice.
Ascensus has made updating IRA disclosure statements easy. Clients who use our documents can use a 2025 full disclosure statement amendment to update their existing Traditional, Roth, and SIMPLE IRAs—including inherited Traditional and Roth IRAs as applicable.
This 2025 update includes changes that are effective in 2025 and include the following.
2024 Final RMD Regulations
Reflected changes made by the SECURE Act of 2019 to the applicable RMD age and beneficiary distribution options.
Required IRA owners to satisfy their total RMD obligation for all of their IRAs—whether they use aggregation, or not—before rolling over an IRA distribution to another IRA or employer-sponsored plan.
Corrected the applicable RMD age for individuals born in 1959, which may affect a spouse beneficiary’s payment start date for both Traditional and Roth IRAs.
2024 Proposed RMD Regulations
Addressed certain provisions under the SECURE 2.0 Act, including requiring hypothetical RMDs for certain spouse beneficiaries and allowing spouse beneficiaries to elect to be treated as the account owner for RMD purposes (i.e., spouse beneficiaries may use the Uniform Lifetime Table to determine their life expectancy factor for payments that are required to start in 2024 and beyond).
Let’s Talk About Your IRA Disclosure Statements
The IRS expects to issue revised model IRA documents. But as of this writing, we’re still waiting. How much longer should your IRA owners wait? If your organization didn’t amend its IRA disclosure statements with Ascensus in 2023, then your IRA documents are outdated.
Ascensus makes it easy to amend your IRA documents. Our amendment mailing service can do all the work for you. We’ll send out the IRA disclosure statement amendment, along with a cover letter, to your account owners. The documents include key specifications for the amendment. To learn more about the 2025 IRA amendment and your amendment options, visit our IRA Document Amendment Solutions webpage or contact your sales representative. We also have options for non-Ascensus IRA document clients. Call us at 800-346-3860, menu option 2, suboption 1, so we can talk through the options with you.
You don’t need to navigate IRS requirements alone. Let Ascensus do the work for you.
