401(a)(9)

[Guest pjb]

If a participant dies prior to required beginning date, but during the year of his age 70 1/2 (or during the following year), is any of the death benefit or remaining account balance required to be paid for the year of his age 70 1/2 and/or the following year as a minimum distribution?

For example, participant dies 3/1/02, one month before required beginning date. Spouse is beneficiary. Can the spouse wait 5 years to take a distribution or is a required amount due for 2001 and 2002?

[mbozek]

an IRA owner who dies prior to the RBD is deemed to have never recieved a min distribution. Therefore spouse can rollover proceeds to own IRA . why would spouse want to wait 5 years???

[Guest pjb]

The 401k document requires death benefits be paid within 5 years following date of death if payments are considered to have not yet begun.

What you said makes sense, but what happens if the participant takes a withdrawal in say the first distribution calendar year but prior to death, given death still occurs before RBD? If distributions are deemed to not have begun, can that amount be later transferred to an IRA by the surviving spouse even though it couldn't have been rolled over when it was paid?

[mbozek]

Any distributions prior to RBD by deceased participant are considered taxable withdrawals by participant not minimum distributions. Remaining balance in Q plan at death can be rolled over to spouse's IRA.

[Guest Harry O]

See Reg. 1.401(a)(9)-2, Q&A 6(a). It says that distributions made prior to the employee's required beginning date are ignored for purposes of determining whether minimum distributions have "begun". The remainder of the participant's account balance could therefore be rolled over by the spouse even though the deceased employee didn't receive the total RMD for the first distribution calendar year.