RMDs due 4/1/02 - "old" rules or "new" rules?

[John A]

If a plan does not adopt the model amendment to apply the 2001 proposed regulations in 2001, should a Required Minimum Distribution due by 4/1/02 be calculated under the rules prior to the 2001 regulations, or should the calculation use the 2001 proposed regulation rules?

Given how the IRS clarified this for distributions due 4/1/01, I would say that the 4/1/02 distribution should be calculated under the "old" rules if the model amendment is not adopted.

Agree? Disagree? Cite?

[stephen]

I agree with your interpretation of using the "old rules"

you are not required to follow the new rules until the the final regs are published. Maybe by the end of the year.

[MWeddell]

This tends to somewhat contradict the IRS' written statements, but it seems to me that if a model amendment is not adopted, then which set of proposed regulations (1987 or 2001) a plan must follow depends on interpreting the existing plan document. One can't simply say a plan that doesn't adopt the model amendment must follow the 1987 proposed regulations without reading the relevant portion of the plan document.

[Mary Kay Foss]

A RMD due 4/1/02 seems to be the only distribution where some controversy exists.

The January 2001 proposed regulations are applicable to distributions for years beginning on or after January 1, 2002. The 1987 proposed regulations will be gone at that point. Most distribution schemes rely on the regulations in effect under 401(a)(9). It seems to me that the model amendment is only relevent for plans that want to use the new proposed regs before 1/1/02.

I suppose if a plan specifically referenced the 1987 proposed regulations it would need an amendment even in 2002. A distribution due 4/1/02 would be for the calendar year 2001 and would come under the old rules without a plan amendment.