March 25, 2022

Internal Revenue Service
Treasury Department
Submitted via www.regulations.gov

Re: IRS REG-105954-20

To Whom It May Concern:

SIFMA1 appreciates the opportunity to provide comments to the IRS regarding proposed regulations to address the required minimum distribution requirements for plans qualified under section 401(a), as well as the update to the regulations to reflect the amendments made to section 401(a)(9) by the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act).2 We are submitting this first letter specifically focused on those issues that are problematic for 2021. We will be submitting a second, more extensive letter covering the other issues and thoughts we have regarding these proposed regulations.

Due to the lack of guidance in place to implement SECURE Act once it became effective December 31, 2019, we were left to rely on a good faith reasonable interpretation of the SECURE Act. While a spokesperson for the IRS was quoted as saying that a good faith reasonable interpretation was an acceptable approach for 2020 and 2021, we are concerned that the direction these proposed regulations are headed is not consistent with the way many of our members interpreted certain provisions. As a result, there are a few issues that could harm some investors that we would like the IRS to clarify in official sub-regulatory guidance as quickly as possible.

1. To that end, many of our members’ clients, who are not Eligible Designated Beneficiaries (EDBs), did not take a distribution for 2021 in instances where the deceased participant or IRA owner died on or after the required beginning date because of the understanding that one would have ten years to withdraw the assets and would not be required to take annual distributions during the 10-year period. As a result, these clients now find themselves in 2022, and unable to take a 2021 distribution. While we disagree with the interpretation that a designated beneficiary in this instance must take annual distributions during the 10-year period, we believe the IRS should provide relief for all beneficiaries from having not taken a distribution in 2021. Further, we do not believe there should be an expectation to take a make-up payment in 2022, since it was a good faith interpretation of the law to not take a distribution in 2021.

1 SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry’s one million employees, we advocate on legislation, regulation and business policy affecting retail and institutional investors, equity and fixed income markets and related products and services. We serve as an industry coordinating body to promote fair and orderly markets, informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for industry policy and professional development. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit http://www.sifma.org.

2 The SECURE Act was enacted on December 20, 2019, as Division O of the Further Consolidated Appropriations Act of 2019, Public Law 116-94, 133 Stat. 2534 (2019).