Ensuring your clients meet their regulatory obligations is essential to investment management. Once clients turn 72, they must take their required minimum distributions (RMDs) every calendar year. Monitoring of this process is available within Practifi through our comprehensive tracking and reminder-setting framework, allowing you to proactively engage your clients at critical points during the year. This article outlines the RMD functionality available to you within your Practifi organization when enabled by your firm's System Administrator. For additional information about RMD functionality in Practifi, System Administrators can consult our Understanding and Using RMD Tracking article.
The RMDs Begin On field located on Individual and Contact records tracks the first day of the year in which that person turns 72, the starting period for RMD management. This field will not be available for use if your System Administrator has not enabled RMD tracking within your Practifi instance. The field will contain a value only if at least one of the following eligibility criteria is met:
- The person is an Individual Client with one or more Assets whose Category is either Retirement Account, or they have a defined Source.
- They are the Primary Member of a Household or Organization record with one or more Assets as above.
- They are a member of a Household or Organization and have a percentage of ownership in one or more Assets as above, based on the defined Asset Roles.
The RMD Active field on Assets is a checkbox that is automatically enabled when all of the following eligibility criteria are met:
- One or more of the People related to the record, either via an Asset/Liability Role or as the Primary Member of the Entity, has an RMDs Begin On date set to either today or a date in the past.
- The record type is Asset.
- The Category is Retirement Account, or its related Financial Product has a record type of Retirement Plan.
Target Fulfillment Tracking
Once your System Administrator has enabled RMD tracking within your firm's organization, the Withdrawals YTD field on Asset records tracks the year-to-date value of withdrawals made from the account. When they meet or exceed the value captured in the Required Minimum Distribution field, the account has fulfilled its obligations for the year, and the date on which this occurred is logged in the RMDs Completed Date field for reporting purposes.
Withdrawals and RMD targets also appear on Contact and Individual records, which roll up the values across all their accounts to provide a singular location for identifying how much is remaining. This can be particularly useful as RMD targets are not assessed on an account-by-account basis but rather based on the sum of target amounts and withdrawals across all the eligible accounts someone owns.
At the end of the year, the whole year’s details are moved from the This Year’s RMDs field section to an identical one called Last Year’s RMDs, allowing you to start the process over again while also retaining recent fulfillment history for review.
To make up-to-date tracking easy, our Addepar and Tamarac integrations include Withdrawals YTD as part of their daily sync. Future releases will expand the scope of supported portfolio management systems.
To allow everyone involved in the RMD management process to easily get a pulse check on how things are going as soon as they log in, Home page tiles are available in the My Alerts & Exceptions row. These tiles are added by System Administrators to your Practifi instance. Access to these tiles may vary depending on if your System Administrator has enabled them within your organization or your specific Practifi app. The tiles are summarized in the table below:
|Assets with missing RMD targets||Advisor, Client Service, Team Member||All Assets related to Entities where I am the record owner or a member of the Servicing Team, where RMD Active is true and Required Minimum Distribution is null.|
|Assets with missing RMD targets||Compliance||
All Assets where RMD Active is true and Required Minimum Distribution is null.
|People with outstanding RMDs||
Advisor, Client Service, Team Member
All People who either are themselves or are related to Entities where I am the record owner or a member of the Servicing Team, where RMDs Begin On is either today or in the past and RMD Completed Date is null.
|People with outstanding RMDs||Compliance||
All People where RMDs Begin On is either today or in the past, and RMD Completed Date is null.
|People whose RMDs began this year||
Advisor, Client Service, Team Member
All People who either are themselves or are related to Entities where I am the record owner or a member of the Servicing Team, where RMDs Begin On occurs in this calendar year.
|People whose RMDs began this year||Compliance||
All People where RMDs Begin On occurs in this calendar year.
Please note: To help with ad-hoc reporting requirements as they relate to RMDs, a set of reports is available in your organization within the RMD Reports folder. These reports are available to System Administrators within your organization by default. If you would like access to RMD reports, please reach out to your Practifi System Administrator.
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