April 1: Initial 2017 RMD Deadline for Deferred Compensation 457(b) Plans for Tax-exempt Co-ops

Plan participants who are no longer working, reached age 70½ in 2017, and chose to delay their first payment until 2018, must take their initial required minimum distribution (RMD) by April 1. Participants who are required to but do not withdraw the full 2017 RMD by April 1, 2018, could be subject to a penalty equal to 50% of the amount that was not withdrawn.

Additionally, participants who chose to delay taking their 2017 RMD until April 1, 2018, must take both their 2017 and 2018 RMDs during the 2018 tax year. The deadline to withdraw the 2018 RMD is December 31, 2018.

The RMD rules apply to both employee and director deferred compensation plans governed by IRC Section 457(b) and sponsored by tax-exempt cooperatives and public utility districts. These plans include:

• Executive Compensation 457(b) Plans;
• Global Executive Compensation Plans; and
• Governmental Deferred Compensation 457(b) Plans.

Participants should contact their personal financial and/or tax advisors for help in determining the amount of the RMD.

Questions? Please contact the Deferred Compensation Program team by email at deferredcomp@nreca.coop or by phone 703.907.6375.