Par. 4. Section 1.401(a)(9)-5, as revised in a final rule published elsewhere in this issue of the Federal Register , effective September 17, 2024, is amended by: a. Revising paragraph (a)(5)(iv)(A); b. Revising paragraph (a)(5)(v); and c. Adding paragraphs (g)(2)(iii) and (iv), and (g)(3)(ii). The revision and additions read as follows:
(a) * * *
(5) * * *
(iv) * * *
(A) Adding the fair market value of the contract (determined in accordance with paragraph (a)(5)(v) of this section) to the remaining account balance determined under paragraph (b) of this section; and
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(v) Rules of operation for aggregation option. For purposes of applying the optional aggregation rule described in paragraph (a)(5)(iv) of this section, the fair market value of the annuity contract is determined as of December 31 of the calendar year preceding the distribution calendar year. Beginning with the determination used for the 2026 distribution calendar year, the applicable method set forth in § 1.408A-4, Q&A-14(b)(2) must be used for this purpose.
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(g) * * *
(2) * * *
(iii) Distributions from designated Roth accounts. For distribution calendar years up to and including the calendar year that includes the employee's date of death, distributions from a designated Roth account (as described in section 402A(b)(2)) are not taken into account for purposes of determining whether this section is satisfied.
(iv) Corrective distributions that give rise to reduction or waiver of section 4974 excise tax. A corrective distribution described in section 4974(e) or § 54.4974-1(g)(3)(iii) is not taken into account for purposes of determining whether this section is satisfied for the calendar year in which the distribution is made. Thus, for the year in which the corrective distribution is made, the required minimum distribution for that year must be made in addition to the corrective distribution.
(3) * * *
(ii) Rules relating to election —(A) Employee dies before required beginning date. If the employee dies before the employee's required beginning date, § 1.401(a)(9)-3(c)(4) applies to the designated beneficiary (under which life expectancy payments will be made to the employee's designated beneficiary), and the designated beneficiary is the employee's surviving spouse who is eligible to make the election described in paragraph (g)(3)(i) of this section, then the spouse is treated as having made that election.
(B) Employee dies on or after required beginning date. If the employee dies on or after the employee's required beginning date, the spouse is not automatically treated as having made the election described in paragraph (g)(3)(i) of this section. However, that election may be a default election under the terms of the plan.
(C) Use of Uniform Lifetime Table. If the election described in paragraph (g)(3)(i) of this section applies with respect to a surviving spouse, then the applicable denominator for each distribution calendar year beginning with the calendar year following the year of the employee's death and up to and including the calendar year that includes the surviving spouse's date of death is determined using the Uniform Lifetime Table in § 1.401(a)(9)-9(c) for the surviving spouse's age as of the surviving spouse's birthday in the distribution calendar year. However, if the employee died on or after the required beginning date, then the applicable denominator for a distribution calendar year is the greater of the applicable denominator determined under the preceding sentence and the employee's remaining life expectancy.
(D) Distribution after spouse's death. If the election described in paragraph (g)(3)(i) of this section applies with respect to an employee who dies on or after the required beginning date (or whose surviving spouse dies after distributions are considered to have begun to the spouse as determined under § 1.401(a)(9)-3(e)(3)), then—
( 1 ) For calendar years following the calendar year that includes the surviving spouse's date of death, the applicable denominator used for determining the required minimum distribution for each distribution calendar year is determined under the rules of paragraph (d)(3)(iv) of this section, and
( 2 ) A final distribution of the employee's entire interest must be made by the end of the calendar year that includes the tenth anniversary of the surviving spouse's death.
(E) Applicability dates for spousal election. The spousal election described in paragraph (g)(3)(i) of this section applies only if the first year for which annual required minimum distributions to the surviving spouse must be made is 2024 or later. Thus, the election described in paragraph (g)(3)(ii)(A) of this section (relating to employees who die before the required beginning date) applies only if the calendar year in which life expectancy payments must begin under § 1.401(a)(9)-3(d) is 2024 or later. Similarly, the election described in paragraph (g)(3)(ii)(B) of this section (relating to an employee who dies on or after the required beginning date) applies only if the first year for which the surviving spouse must take annual required minimum distributions under paragraph (d) of this section is 2024 or later (that is, if the employee died in 2023 or later).