As we approach the end of 2026, now might be a good time for San Diego Gas & Electric employees to take a closer look at a few developments surrounding required minimum distributions (RMDs) for corporate employees in the United States.

We'd first like to ensure that our San Diego Gas & Electric clients understand the basics— What are RMDs? Once you reach age 72, you are required to take minimum distributions from your traditional IRAs and most employer-sponsored retirement plans. (RMDs are not required from an employer plan if you are still working at the company sponsoring the plan and you do not own more than 5% of the company.) You can always take more than the required amount if you choose.

The portion of an RMD representing earnings and tax-deductible contributions is taxed as ordinary income, unless the RMD is a qualified distribution from a Roth account. We'd like our clients from San Diego Gas & Electric to note that failing to take the full amount of an RMD could result in a penalty tax of 50% of the difference.

Generally, RMDs must be taken by December 31 each year. You can delay your first RMD until April 1 following the year in which you reach RMD age; however, it's important that these San Diego Gas & Electric employees be aware that you will then need to take two RMDs in one year — the first by April 1 and the second by December 31. (If you reached age 73 in the first half of 2026, different rules apply; see below.)

You may want to weigh the decision to delay your first RMD carefully. Taking two distributions in one year might bump you into a higher income tax bracket for that year.

Before finalizing any estate plan, it is worth examining how San Diego Gas & Electric's employer-sponsored benefits fit into the broader picture. According to publicly available information, San Diego Gas & Electric maintains an active defined benefit pension plan, which provides retirement income based on factors such as years of service and compensation history. San Diego Gas & Electric also offers retiree healthcare benefits to eligible employees, which can provide meaningful coverage for those who retire before reaching Medicare eligibility at age 65. Because the specifics of your pension formula, vesting schedule, and benefit eligibility depend on your individual employment history and plan documents, We encourage you to review your Summary Plan Description (SPD) or speak with San Diego Gas & Electric's HR or benefits team for the most current details.