RMD v In-Service Non-Owner

[Lou S.]

An employee with no ownership age 70.5+ is still working.

Plan allows for in-service distributions.

Participant wants to rollover account to IRA.

Does the participant have to receive RMD before rolling over account. That is does the rollover request trigger an otherwise delayable RMD?

Oh and yes I realize that by rolling over now they will subject funds to RMD in the IRA in future years that might be delayed under plan rules.

[BG5150]

He does not have to take the RMD.

However, if he retires later in the year, he has an impermissible contribution to his IRA and the trust should issue 2 1099's--one for the rollover and one for the RMD.

[Lou S.]

Thanks. Appreciate the feedback. I think he is leaving enough in the account to cover any potential RMD if he leaves plus he's making 401(k) contribs and has a receivable PS contrib so we should be OK should he leave. Was just wondering if taking any distribution triggered RMD.

[masteff]

To expand on it slightly... it's by virtue of the definition of required beginning date. Currently RBD hasn't been triggered but if he retires before 12/31 then it's triggered for the calendar year. Part of the relevant info is in Reg 1.402©-2 Q&A-7 with the rest in the 401(a)(9) regs.