PERAC Memo #39 - 2010: Age 70? Distribution
Age 70? Distribution
View original on MA State Library →Summary
This memo addresses the federal/state requirement (G.L. c. 32, §12D) that inactive, non-retired members who turn age 70½ must begin receiving a distribution by April 1 of the following year, and provides a sample notification letter boards can use. Boards should send notices (ideally in December, with a March 1 return date) urging affected members to contact the board for counseling on distribution/rollover options—rather than mailing all forms automatically—and should follow up with non-responders; PERAC also suggests boards consider sending an advance notice at age 69 to help members avoid tax penalties.
Full Text
MEMORANDUM #39, 2010
M E M O R A N D U M
TO: All Retirement Boards
FROM: Joseph E. Connarton, Executive Director
RE: Age 70? Distribution
DATE: November 22, 2010
As you know, G.L. c. 32, ? 12D brought the Massachusetts Retirement Systems into compliance with the federal
requirement that persons who attain age 70?, who are not receiving a retirement allowance and who are not employed
must begin taking a distribution from the System by April 1 of the year following the year they attain age 70?.
Attached is a sample letter that Boards can use to advise affected members of this requirement.
The options available to these members can be quite complicated, especially those provisions that apply to rollovers.
As a result, we are suggesting that the members be urged to contact the Board for counseling. We do not suggest that
a set of all of the possible forms be sent to members without either formal counseling or a specific request.
The distribution to all persons who have attained age 70? during calendar year 2010 must be made by April 1, 2011,
so we recommend that the notices be sent out in December with a return date of March 1, 2011 in order to allow time
for processing of payments. Boards may wish to send follow-up notices or make other efforts to contact members who
do not respond in a timely manner.
Your Board may wish to send an annual notification be sent to members in the year they reach age 69 advising them
of their upcoming required minimum distribution deadline and urging them to promptly apply for benefits in order to
avoid tax penalties and to ensure they have the most favorable opportunity for rollovers.
If you have questions, please feel free to contact Barbara Phillips at 617-666-4446 ext. 902
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