SSRRS Posted September 3, 2021 Share Posted September 3, 2021 Hi, The owner (active) of a corp took his RMD from his Profit Sharing Plan (his prior year end assets divided by age factor). Since this is an RMD, and he is not electing a benefit etc, is an executed distribution election form not required? Thank you. Link to comment Share on other sites More sharing options...
CuseFan Posted September 3, 2021 Share Posted September 3, 2021 This is not an election, not eligible for rollover, and is required to be paid by the plan for continued qualification, so no forms should be needed. SSRRS 1 Kenneth M. Prell, CEBS, ERPA Vice President, BPAS Actuarial & Pension Services kprell@bpas.com Link to comment Share on other sites More sharing options...
BG5150 Posted September 3, 2021 Share Posted September 3, 2021 Was 10% withheld for federal taxes? Luke Bailey and SSRRS 2 QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left. Link to comment Share on other sites More sharing options...
C. B. Zeller Posted September 3, 2021 Share Posted September 3, 2021 An RMD can be distributed without the participant's consent. However the participant must be given the opportunity to waive the 10% federal income tax withholding. As a matter of prudence, the plan administrator might want to get the participant to complete a form, if only to ensure that the payment information is correct. If the participant in question is the plan administrator, then this step might be redundant. Luke Bailey, ugueth and SSRRS 3 Free advice is worth what you paid for it. Do not rely on the information provided in this post for any purpose, including (but not limited to): tax planning, compliance with ERISA or the IRC, investing or other forms of fortune-telling, bird identification, relationship advice, or spiritual guidance. Corey B. Zeller, MSEA, CPC, QPA, QKA Preferred Pension Planning Corp.corey@pppc.co Link to comment Share on other sites More sharing options...
BG5150 Posted September 3, 2021 Share Posted September 3, 2021 If there was no withholding, I'd want something in writing, just to chronicle it. Good thing is if it's a W-4P, then I believe the election is good until revoked. With W-4P "equivalents" I'm not sure if that election carries forward. And, if the RMD is distributed without the participant's consent, then, IMHO, the 10% MUST be withheld. Luke Bailey and SSRRS 2 QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left. Link to comment Share on other sites More sharing options...
SSRRS Posted September 3, 2021 Author Share Posted September 3, 2021 Thank you very much BG5150, CUSEFAN, and C.B. Zeller. In this case, the administrator (owner and wife) took the RMDs, and therefore, an election form should not be required based on the above. What if an agent (audit) is asking for executed distribution election forms for these RMDs? Link to comment Share on other sites More sharing options...
C. B. Zeller Posted September 3, 2021 Share Posted September 3, 2021 Point them to the section of the plan document that says distributions will commence by the participant's required beginning date, even without the participant's consent. Luke Bailey, SSRRS and ugueth 3 Free advice is worth what you paid for it. Do not rely on the information provided in this post for any purpose, including (but not limited to): tax planning, compliance with ERISA or the IRC, investing or other forms of fortune-telling, bird identification, relationship advice, or spiritual guidance. Corey B. Zeller, MSEA, CPC, QPA, QKA Preferred Pension Planning Corp.corey@pppc.co Link to comment Share on other sites More sharing options...
SSRRS Posted September 3, 2021 Author Share Posted September 3, 2021 6 minutes ago, C. B. Zeller said: Point them to the section of the plan document that says distributions will commence by the participant's required beginning date, even without the participant's consent. C.B. thank you so much! Link to comment Share on other sites More sharing options...
Bri Posted September 7, 2021 Share Posted September 7, 2021 Surprised nobody bothered to confirm that J&S does not apply to the plan. Luke Bailey 1 Link to comment Share on other sites More sharing options...
BG5150 Posted September 7, 2021 Share Posted September 7, 2021 32 minutes ago, Bri said: Surprised nobody bothered to confirm that J&S does not apply to the plan. What happens if there's J&S and the participant does not complete the paperwork on time? SSRRS 1 QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left. Link to comment Share on other sites More sharing options...
Bri Posted September 7, 2021 Share Posted September 7, 2021 Doesn't the plan have to buy a taxable annuity (with survivor benefits) with the single payment otherwise due? Link to comment Share on other sites More sharing options...
SSRRS Posted September 10, 2021 Author Share Posted September 10, 2021 On 9/7/2021 at 9:49 AM, Bri said: Surprised nobody bothered to confirm that J&S does not apply to the plan. Thank you. However, this is a Profit Sharing Plan, and the only options offered are Lump Sums or partial lump sums. Link to comment Share on other sites More sharing options...
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