FROM THE OFFICE OF PUBLIC AFFAIRS

Today, the Treasury Department continued the job of simplifying the minimum distribution rules for IRA holders and retirement plan participants over age 701/2 . Treasury and the IRS have finalized the required minimum distribution rules proposed in January of 2001. The 2001 proposed regulations were extremely well received by employers, retirees, and plan administrators alike. In addition to finalizing those rules, today's regulations make numerous improvements in response to public comments.

"This is truly good news for the retirement system," stated William Sweetnam, Treasury Department Benefits Tax Counsel. "These rules make it simple for older Americans and their families to determine their annual required minimum distributions and greatly reduce the compliance burden for qualified plan administrators. The final rules also satisfy our obligation under the Economic Growth and Tax Relief Reconciliation Act of 2001 to modify the life expectancy tables to reflect current life expectancy."

In addition to finalizing the minimum distribution rules, temporary and proposed regulations are being issued to provide guidelines for distributions that will be made from annuities. By issuing these guidelines as temporary and proposed regulations, taxpayers will have the same chance to comment as they had on the simplification of the rules for individual accounts.

In order to assist older Americans in meeting their minimum distribution obligations, the rules include a reporting requirement for IRA trustees. As described in a notice being issued in conjunction with the new guidance, beginning in 2003, IRA trustees will be required to report the amount of the required distribution to IRA owners or offer to calculate the amount for the owner.

Treasury and the IRS have made the rules as flexible as possible for 2002. For this year, taxpayers may use the new rules, the 2001 proposed rules, or the 1987 proposed rules to determine their required minimum distributions.