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These rules are completely insane. What are others using as a practical tool for sorting this all out? There must 15 to 20 pages in the EOB. Has anyone created a user friendly guide to answer the million possibilities?? I'll spend 45 minutes sometimes trying to figure all of this out for a particular scenario. To me there should be a website where you ask: How old was the Participant? How old was the beneficiary? Was the beneficiary the spouse? And on an with all of the other variables (RMD before death, after death) and tell you what the rules are. Has anyone done this yet??

Many plans provide only one form of distribution—a single-sum payment. A plan may provide that a no-longer-working participant (rather than a still-working 5%-owner) who has reached her required beginning date is paid her whole account. (Only rarely would a participant who has reached her required beginning date not also have reached her normal retirement age, which allows an involuntary distribution.) If a direct rollover is requested or provided, the administrator divides the account into minimum-distribution and rollover-eligible portions. If a participant has not requested her distribution, the plan pays an involuntary distribution. This might include a direct rollover—of the rollover-eligible portion—to a default Individual Retirement Account. The minimum-distribution portion is a money payment.

I agree in that situation there's nothing to point to in the rules that could show any adverse tax consequence to the HCPs because they are not put in a constructive receipt position by the arrangement. I still think it could potentially invite further scrutiny on the plan as a whole, though. With limited guidance here (and almost no enforcement activity) there are many judgment calls to make.

Asked the same question on another board and answer was that the "PRI-2012 went to 5 decimal places."

Okay that makes sense but what if the plan design is to pay 100% of the cost of coverage for HCPs and 75% for non-HCPs regardless of the tier of coverage? What would the tax consequences be to those HCPs in that scenario?

OMG it is screaming out for a flowchart.

I feel your pain. I spent over 1 hour last week trying to determine an answer to one of these. ERISApedia has their distribution e-source, which is excellent, but nothing I've seen offers quite the user friendly simplicity you mention. If someone does develop one, they sure as heck should charge for it. Someone with a mind that works like a flowchart may come up with one eventually.

The establishment of a nominal Roth IRA in anticipation of rolling over a Roth account later was also done to be able to get the Roth money out of the qualified plan before it got caught up in required distributions. The change in law that allows Roth accounts to be excluded from the required distribution calculation obviated the need for the technique.

Well it would affect all HCPs. Not all of them are in the fully employer-paid tier of EE-only coverage.

The participant can contribute a nominal amount (e.g., $100) to an after-tax IRA, then convert the after-tax to a ROTH, so as to have a rollover Roth running simultaneously with the in-plan Roth account that will be ready for any rollovers.

Paul I and CuseFan and kmhaab, thank you for your further observations. My clients use procedures designed so a recordkeeper, without accepting discretion, can process as good-order or “NIGO” almost all kinds of claims. For a participant loan, an emergency personal expense distribution, a qualified birth or adoption distribution, an eligible distribution to a domestic abuse victim, and a hardship distribution, there is no tax-law need (and, in my view, no good reason) to evaluate the claim beyond good-order processing. Claims for retirement distributions and even death distributions ordinarily can be handled in the recordkeeper’s processing without discretion. A recordkeeper involves the plan’s administrator only when a claimant asserts her right to dispute the recordkeeper’s response, or the circumstances relate to a court proceeding, bankruptcy, or other trouble. Many recordkeepers have not built forms, procedures, and systems for SECURE 2022’s and SECURE 2019’s new kinds of distributions. Their explanations to plan sponsors (and consultants too) blame an absence or insufficiency of IRS guidance. Some of that blame is fair; much of it is unfair. Small plans are stuck; bigger plans negotiate workarounds. Many recordkeepers need to intensify identity controls, address controls, and cybersecurity protections. Like it or not, a retirement plan account is increasingly like a bank account in a holder’s power to take money out whenever she wants—yet with bigger amounts and bigger risks. Returning to my originating question about which provision one would recommend (after solving the plan-administration issues, or imagining a hypothetical absence of them): Some plan sponsors might dislike allowing a too-easy payout. Yet, if a plan’s opportunity to generate retirement income for a participant depends, exclusively or heavily, on participant contributions, providing SECURE 2019’s and SECURE 2022’s before-retirement distributions can be a way to help reassure reluctant savers that one’s money will be available to meet needs when they happen. And I suggest employers treat working people as adults, who make one’s own decisions about how to use one’s resources.