New or old RMD rules if death in prior year?

[John A]

If a qualified plan participant died several years ago, and the beneficiary this year has a RMD for the first time (participant would have had RMD now if he had lived), does the beneficiary determine the Required Minimum Distribution under the old rules or under the 2001 proposed regs?

[Belgarath]

I'm assuming from your post that the beneficiary is a spouse - otherwise the beneficiary would have had to use the 1 year or 5 year rule, and couldn't have waited until participant would have attained 70-1/2.

You can use the new tables. This is provided that the plan language permits this - plans are not required to amend their language to follow the "new" rules until 2002. Does the plan permit a lump-sum payout? If so, may be easier to roll out to an IRA in the surviving spouse's name, and take the minimum dstributions from the IRA. Most Trustees and participants prefer this if plan allows it.

[John A]

Belgarath,

thanks for the response.

When I looked at this again, I started wondering if it really mattered whether the old or new rules applied.

Is it true that under both old and new, the spouse's RMD would be calculated based on the spouse's life only with recalculation (unless plan document specified something different)?

Even under the new rules, when a death occurs prior to the participant's RBD, the new simplified table (old MDIB table) is not used, is it?

[Belgarath]

Yes, with death prior to RMD, "old" rules apply, but a surviving spouse can roll to own IRA, and use the "new" rules.

Maybe someone else will have a different opinion on this.