Section 8. Definitions.

Section 8.1. Applicable age.

(a) In the case of an individual who attains age 70 before July 1, 2019, the applicable age is 70 ½.

(b) In the case of an individual who attains age 70 on or after July 1, 2019, the applicable age is 72.

(c) In the case of an individual who attains age 72 after December 31, 2022, and age 73 before January 1, 2033, the applicable age is 73.

(Note to reviewer: Section 107 of the SECURE 2.0 Act of 2022 increases the required minimum distribution age to age 73 starting on January 1, 2023 and increases the age further to age 75 starting on January 1, 2033. That change was not included on the Cumulative List, so plan language is not provided in this regard.)

Section 8.2. Actuarial gain. The difference between an amount determined using the actuarial assumptions (i.e., investment return, mortality, expense, and other similar assumptions) used to calculate the initial payments before adjustment for any increases and the amount determined under the actual experience with respect to those factors. Actuarial gain also includes differences between the amount determined using actuarial assumptions when an annuity was purchased or commenced and such amount determined using actuarial assumptions used in calculating payments at the time the actuarial gain is determined.

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Section 8.3. Designated beneficiary. The individual who is designated by the participant (or the participant’s surviving spouse) as the beneficiary of the participant’s interest under the plan and who is the designated beneficiary under IRC 401(a)(9) and Treas. Reg. 1.401(a)(9)–4(a).

(Note to reviewer: In order to designate a beneficiary under the plan, the plan must by its terms designate the beneficiary or provide for an affirmative election by the participant (or the participant's surviving spouse) specifying such beneficiary. See Treas. Reg. 1.401(a) (9)4(a).)

Section 8.4. Distribution calendar year. A calendar year for which a minimum distribution is required. For distributions beginning before the participant’s death, the first distribution calendar year is the calendar year immediately preceding the calendar year which contains the participant’s required beginning date. For distributions beginning after the participant’s death, the first distribution calendar year is the calendar year in which distributions are required to begin pursuant to section 2.2.

Section 8.5. Eligible cost-of-living index. An index described in Treas. Reg. 1.401(a)(9)–6(o) (2)(i), (o)(2)(ii) or (o)(2)(iii).

Section 8.6. Life expectancy. Life expectancy as computed by use of the Single Life Table in Treas. Reg. 1.401(a)(9)–9(b).

Section 8.7. Required beginning date.

(a) The required beginning date is one of the following as selected by the employer in section _____ of the adoption agreement:

(Note to reviewer: The blank should be filled in with the section number of the adoption agreement corresponding to section 3 of the sample adoption agreement provisions of this LRM #51.)

(i) The required beginning date of a participant is April 1 of the calendar year following the calendar year in which the participant attains the Applicable Age.

I. The required beginning date of a participant is April 1 of the calendar year following the calendar year in which the participant attains the Applicable Age, except that benefit distributions to a participant (other than a 5% owner) with respect to benefits accrued after the later of the adoption or effective date of the amendment to the plan that implements the changes to the required beginning date of this paragraph must commence by the later of the April 1 of the calendar year following the calendar year in which the participant attains the Applicable Age or retires.

II. The required beginning date of a participant is April 1 of the calendar year following the later of the calendar year in which the participant attains the Applicable Age or the calendar year in which the participant retires, except that benefit distributions to a 5% owner must commence by April 1 of the calendar year following the calendar year in which the participant attains the Applicable Age.

(b) If elected by the employer in section _____ of the adoption agreement, any participant (other than a 5-percent owner) may elect by April 1 of the calendar year following the

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calendar year in which the participant attains the Applicable Age to defer distributions until April 1 of the calendar year following the calendar year in which the participant retires. If no such election is made the participant will begin receiving distributions by April 1 of the calendar year following the year in which the participant attained the Applicable Age.

(Note to reviewer: The blank should be filled in with the section number of the adoption agreement corresponding to section 4(a) of the sample adoption agreement provisions of this LRM.)

(c) Except with respect to a 5% owner, a participant’s accrued benefit will be actuarially increased to take into account the period after age 70½ in which the participant does not receive any benefits under the plan. The actuarial increase will begin on April 1 following the calendar year in which the employee attains age 70½ (January 1, 1997 in the case of an employee who attains age 70½ prior to 1996), and will end on the date on which benefits commence after retirement in an amount sufficient to satisfy IRC 401(a)(9). The amount of actuarial increase payable as of the end of the period for actuarial increases will be no less than the actuarial equivalent of the participant’s retirement benefits that would have been payable as of the date the actuarial increase must commence plus the actuarial equivalent of additional benefits accrued after that date, reduced by the actuarial equivalent of any distributions made after that date. The actuarial increase under this section is not in addition to the actuarial increase required for that same period under IRC 411 to reflect the delay in payments after normal retirement, except that the actuarial increase required under this section will be provided even during the period during which an employee is in service under ERISA 203(a)(3)(B). For purposes of IRC 411(b)(1)(H), the actuarial increase will be treated as an adjustment attributable to the delay in distribution of benefits after the attainment of normal retirement age. Accordingly, to the extent permitted under IRC 411(b)(1)(H), the actuarial increase required under this article will reduce the benefit accrual otherwise required under IRC 411(b)(1)(H)(i), except that the rules on the suspension of benefits are not applicable.

Section 8.8. 5% owner. A participant is treated as a 5% owner for purposes of this article if the participant is a 5% owner as defined in IRC 416 at any time during the plan year ending with or within the calendar year in which such owner attains the Applicable Age. Once distributions have begun to a 5% owner under this article, they must continue to be distributed, even if the participant ceases to be a 5% owner in a subsequent year.