• The SECURE Act—Impact to UMC Retirement Plans
• 2021 Comprehensive Benefit Funding Plans

The SECURE Act—Impact to UMC Retirement Plans

While there are numerous changes to retirement plans made by the SECURE Act, which was signed into law on December 20, 2019, only the change to required minimum distributions (RMDs) impacts UMC retirement plans.

The law requires a qualified retirement plan to make distributions to participants upon attainment of a certain age, and also requires rules regarding how distributions must be made to beneficiaries in the event of a participant's death. The SECURE Act modifies both of these rules:

• Increasing the age at which a participant must begin RMDs from age 70 ½ to age 72 (if he or she attain age 70 ½ on or after January 1, 2020) and
• Largely eliminating the lifetime distribution option for beneficiaries.

Prior to the new law, designated beneficiaries could receive an inherited account balance over their life expectancy, rather than being forced to receive the entire balance within a certain number of years. Under the new rules, the general rule is that beneficiaries must receive the entire account balance within 10 years. A lifetime distribution option remains for certain individuals, including surviving spouses, disabled or chronically ill individuals, and beneficiaries who are no more than 10 years younger than the participant. The exception also applies to minor children, at least until they reach the age of majority. These new rules apply with respect to participants who die on or after January 1, 2020.

Because these rules are effective now, Wespath and other record keepers must adjust administration and system programs to follow the new RMD rules. Wespath plans to communicate these changes to plan participants and beneficiaries through a future edition of the Hark newsletter, which accompanies their quarterly statements. We also notify participants and beneficiaries well in advance of the date their RMDs must begin, and these letters will be adjusted to reflect the new rules.

2021 Comprehensive Benefit Funding Plans

The 2021 Comprehensive Benefit Funding Plan (CBFP) application is expected to be released to conferences on February 20, 2020. The release date is slightly later than in previous years to accommodate system enhancements. Wespath will host two webconferences to review the enhancements and provide a refresher on the application. The hour-long sessions are scheduled for:

• Thursday, February 20, from 2:30 to 3:30 p.m., Central time, and
• Tuesday, February 25, from 10:30 to 11:30 a.m., Central time.

Both sessions will cover the same information, so choose the one that best fits your schedule. Instructions for connecting to webconferences will be provided in an OnBoard Express that will be sent in advance of the webconferences.

If you have comments or concerns regarding the CBFP application or the scheduled webconferences, contact either:

• Your conference liaison, or
• Ross Lundstrom at rlundstrom@wespath.org or 1-800-269-2244 ext. 4224.

---

Copyright © Wespath Benefits and Investments,
a general agency of The United Methodist Church
Share your suggestions and comments about On Board Express