Required Minimum Distributions (RMDs) have long been a core component of U.S. retirement policy, originally designed to ensure that more retirement assets are taxed as retirement income rather than as part of an individual’s inheritance. While the concept has existed for decades, the rules continue to evolve, most recently through the SECURE Act and SECURE 2.0. For plan trustees, administrators, and client service teams, understanding these requirements is critical to staying compliant and guiding participants effectively. Below is a clear, digestible overview of how RMDs came to be, how they’ve changed, and what they mean for both Defined Contribution (DC) and Defined Benefit (DB) plans.

Zenith American Solutions helps multiemployer retirement plans navigate these changes with precision, combining regulatory expertise, proactive participant communication, and disciplined administration to reduce fiduciary risk.

Why RMDs Exist

RMD rules prevent individuals from using tax‑advantaged accounts to:

Defer taxation indefinitely
Transfer wealth to heirs under more favorable tax treatment

In short: RMDs are intended to ensure more retirement assets are taxed during retirement to ensure tax-deferred retirement savings are eventually distributed and taxed.

A Brief History of RMD Rules

RMDs were first introduced in 1974 with the establishment of Individual Retirement Accounts (IRAs), originally requiring distributions beginning at age 70½.

In 1986, the rules became mandatory for all qualified retirement plans under IRC §401(a)(9), applying to both Defined Contribution and Defined Benefit plans.

Over time, the definition of the Required Beginning Date (RBD) evolved. Initially tied strictly to age, the rules were later revised to allow distributions to start by April 1 of the year following the later of*:

The participant reaching age 70½, or
Retirement

*Except for 5% owners, who cannot delay based on retirement status.

Recent legislation brought significant updates in the required age:

2023 – SECURE 2.0 Act

The RMD age rose again—to:

73 for individuals turning 72 after 12/31/2022
75 for individuals turning 73 after 12/31/2032

2019 – SECURE Act

The required age for RMDs increased from 70½ to 72 for individuals reaching 70½ after December 31, 2019.

These updates reflect increasing life expectancy and a policy shift toward allowing participants to keep assets invested longer. Some plans have not yet adopted optional SECURE or SECURE 2.0 provisions, meaning distributions may still begin earlier based on current plan document language rather than IRS minimums.

How RMDs Work in Defined Contribution Plans

For DC plans, the RMD amount is calculated using IRS life‑expectancy tables and updated annually. Key points include:

Amount is based on the participant’s account balance at the prior year‑end
RMDs may be paid as lump sums or installments, depending on plan provisions and participant elections
Excess withdrawals cannot count toward future RMDs
DC plans generally follow federal age delays because it benefits their participants

How RMD Timing Works

Participants must take an RMD every year once they reach the required age. The initial distribution may be delayed until April 1 of the following year, but doing so may result in two RMDs in that first calendar year.

For example:
A participant turning 73 in 2025 must take (assuming the participant is not eligible for the still-working exception under the plan):

First RMD: by April 1, 2026, based on 12/31/2024 balance (or accrued benefit)
Second RMD: by December 31, 2026, based on 12/31/2025 balance (or accrued benefit)

After this, distributions must be made each year thereafter by December 31.

How RMDs Work in Defined Benefit Plans

DB plans follow a different model:

RMDs are usually paid as monthly annuity payments beginning on the RBD
The amount is based on the benefit earned as of the prior year’s December 31
Participants are often required to make a benefit election
Plans may keep earlier distribution rules voluntarily

Although triggered by the same tax code section, DB plan RMD administration can be more complex due to required elections and ongoing annuity payments.

What This Means for Plans and Administrators

Accurate communication and tracking are essential.
Zenith American Solutions Client Services teams ensure that:

Participants are informed of approaching RMD deadlines
DB elections are collected ahead of time
Account valuations and benefit calculations align with IRS rules
Plan terms are followed where they differ from federal age requirements

Failure to administer RMDs properly can result in IRS penalties and negative participant experiences.

With Zenith as your TPA partner, RMD compliance becomes a structured, repeatable process, not a year-end scramble.

The Bottom Line

RMDs are a longstanding but evolving component of retirement plan compliance. With recent increases in RMD ages and continued flexibility between plan types, it's more important than ever for teams to stay informed. Understanding the history and reasoning behind RMD rules helps ensure accurate administration, protects participants, and maintains the integrity of retirement.

Understanding Required Minimum Distributions (RMDs): What Changed, Why It Matters, and How Plans Are Impacted