continuation of MRD, but using daughter's age after death of participa

[MR]

say a participant has attained age 70 1/2 and began taking MRD from his dc plan in 2000 using the single life table. his beneficiary is his daughter. he dies and the daughter doesn't want to be taxed on the full balance. new MRD rules seem to indicate that she can continue the MRD, but that her life expectancy would be used, not the participant's. this seems available only if the plan utilizes the "alternative rule", rather than the "5-year rule" for purposes of determining when the distribution must be made.

questions are:

1. am i right?

2. if the plan does not currently utilize the alternative rule, can it be amended at this point to do so?

[BPickerCPA]

IRS Letter Rulings indicate that the daughter can use her life expectancy, even though the participant used his own single life expectancy while alive.

However if the plan is more restrictive than IRS rules, the plan will control.

Under the tax rules, there is no five year rule once the participant starts mandatory distributions at the required beginning date.

[MR]

thanks,

does the answer change if there are 3 beneficiaries and one of them want to take minimums, while the others take lump sums? also, can they amend the plan to permit this after the employee has died?

mr

[BPickerCPA]

Each beneficiary has the right to take the minimum. At the same time, each bene can take more than the minimum. One bene taking a lump sum does not mean that another bene can't take minimum distributions.

I don't see any reason why a plan could not be amended now to permit a longer payout as long as the payout is still within IRS guidelines. However, my not seeing a reason doesn't mean anything. Check this out with an attorney knowledgeable in ERISA rules.