March 2010
2010 IRS Required Minimum Distribution FAQs
In January, the annual IRS Required Minimum Distribution information packets were sent out to all qualified policyowners who would be age 70½ or older in 2010. Since then, we’ve been fielding questions regarding this information. Here’s a recap to help you answer your clients’ questions about this important annual requirement.
One question that comes up repeatedly involves the 2009 waiver of the minimum distribution requirement and automatic distribution payments.
Many policyowners who waived their 2009 distribution wonder whether they need to resubmit paperwork for the automatic payments to occur in 2010. The simple answer is: no, they do not. The Standard made note of those on automatic payment requesting 2009 waivers and reset the payment stream for the payments to begin again in 2010. The policyowner will need to resubmit a form only if they wish to make a change to the payment date or the withholding.
The packets usually bring up another question about why we send out the information to policyowners who are already set up for automatic payment. The IRS requires us to notify all policyowners who will be 70½ or older during the tax year of their minimum distribution requirements and their right to call The Standard for a calculation of their requirement. Policyowners are not required to return the paperwork included in the packet unless they wish to declare a required minimum distribution option or make a change in a current option set up.
Our Annuities Administration team is ready to answer or research any questions regarding minimum distribution requirements and perform the calculations for required amounts.