Any thoughts on the following analysis of how the new rules work?

• If I understand them correctly, the current regulations provide that if the employee has begun RMDs, the longer of the (theoretical) remaining life expectancy of the employee or the life expectancy of the designated beneficiary governs the beneficiary’s RMDs, but the designated beneficiary alternatively can elect to use the 5-year deferral method (i.e., the one that continues post-SECURE Act to apply to non-designated beneficiaries if the employee dies before starting RMDs). This optional 5-year method for designated beneficiaries where RMDs have begun is not provided by the statute. When the employee’s RMDs have begun, a non-designated beneficiary exclusively uses the remaining life expectancy of the employee to determine required withdrawals.

• If the employee hasn’t begun taking RMD’s, a designated beneficiary can use either his/her own life expectancy (but not that of the employee) or the 5-year method. A non-designated beneficiary must use the 5-year method.

• Since Congress eliminated RMDs over the designated beneficiary’s life expectancy as an option in all cases, a question is raised as to whether taking RMDs over the employee’s remaining life expectancy is still an alternative to applying the 10-year deferral method prescribed by the SECURE Act. The 10-year method according to the statute applies “whether or not distributions [to the employee] have begun.” One might assume that this is (as the 5-year deferral method was under prior law) merely an alternative method of withdrawal in the situation where the employee had begun RMDs prior to death, and not mandatory, since the language of sec. 401(a)(9)(A)(ii) (referring to the lives of “such employee and a designated beneficiary”) wasn’t changed. It would be helpful if Congress or the IRS confirmed this, but this seems to be a reasonable interpretation.

• In cases where the employee hadn’t started taking RMDs before passing, as noted above the old rules did not permit withdrawal over the remaining life expectancy of the employee as an option for a designated beneficiary–only periodic withdrawal over the life expectancy of the beneficiary, or alternatively no later than 5 years after the employee’s death. The question is whether in this situation the new law permits optional withdrawal of RMDs over the remaining life expectancy of the employee, or whether the 10-year deferral method is the only one available. It would make sense in this case, consistent with the apparent rule in cases where the deceased employee had begun taking RMDs and the IRS’s prior “generous” interpretation of the statute, for the IRS to clarify that a designated beneficiary can choose between the 10-year deferral method or RMDs over the remaining life expectancy of the employee.