News & Announcements - Make Sure Participants Take Their Required Distributions | American Funds

News & Announcements

Make Sure Participants Take Their Required Minimum Distributions

November 19, 2021

Most plan participants must begin taking required minimum distributions (RMDs) for the year they reach age 72 or leave the company, whichever is later.

Plan sponsors are responsible for ensuring that RMDs are taken every year. Failure to make required distributions is a violation of plan rules and could result in penalties and plan disqualification.

To see a list of participants who will reach, or have already reached, age 72 this year, access the Advanced Report tab in the Reports & Analysis section of the website. You can generate a custom participant report by following these steps:

  • In the Census section, check the box for “Search” and “Show” next to “Birth Date.” In the drop-down menu, select “Less Than” and then enter “01/01/1950.”
  • In the Financial section, check the box for “Search” next to “Portfolio Balance.” In the drop-down menu, select “Greater Than” and then enter “0.00.”
  • Click the “Run Report” button

If the participant owns more than 5% of the business sponsoring the plan, RMDs must begin once the participant is age 72, regardless of whether he or she is retired.

Learn more about RMDs in the Plan Distributions section of the Admin Guide (PDF).

Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.

Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing.

 

American Funds Distributors, Inc., member FINRA.