70 1/2 RMD from 401(k) and IRA

[doombuggy]

One of my clients has a retired participant who is required to take a RMD from the plan. He says he has an IRA account as well, and can take a RMD from that and it will cover both the IRA and the RMD. I cannot find anything to support this theory. In the new regs from April 2002, it says that RMDs must be calculated for each IRA seperately. While the answer to this question dealt only with IRAs, could we perform the manual calculation for teh 401(k) RMD and give the amount to him, so he could take the actual distribuiton from his IRA (along with the RMD for that account)?

Or is this this guy pulling my leg?

[E as in ERISA]

It was my understanding that you have to satisfy RMD requirements from each qualified plan separately by taking a distribution, but you can satisfy your RMD requirements for all IRAs by taking the distribution from one IRA.

[Alan Simpson]

I agree with Katherine

[doombuggy]

Does anyone know the regulation that covers this topic? I sent the client the calculations for the RMD from the 401(k) plan that we administer for them, and want to give her concrete "evidence" to give to this participant, showing that he must take the RMD from the 401(k), and not just the IRA he has with someone else.

Thanks for your help!

[jpod]

I don't have the cite, but my recollection is that you can now find it in the RMD regulations.

The general rule is stated in the regs under Section 401(a)(9) of the Code: you must compute AND distribute RMDs on a plan-by-plan basis. The exception for multiple IRAs is set forth in the regulations under Section 408 of the Code dealing with special RMD rules for IRAs.

[Michael Devault]

Take a look at section 1.401(a)(9)-1, A-1 ot see if it helps. It specifically states that all stock bonus, pension and profit sharing plans are subject to the required minimum distribution rules. This section also specifies the rules applicable to these plans.

More importantly, it directs you to other regulation sections for rules applicable to 403(B) contacts and to yet other rules for IRAs. Since different rules apply, I would think that distributions from IRAs could not be used to satisfy distribution requirements for pension & profit sharing plans. As further evidence, keep in mind that the rules specifically state that distributions from 403(B) accounts can't be used to satisfy IRA distributions, and vice versa.

[Guest pclark]

1.408-8 Q & A # 9.

[RTK]

Look at 1.401(a)(9)-8, Q&A 1. Plans may not be aggregated for 401(a)(9) purposes and distribution under each plan must separately satisfy 401(a)(9).

[Guest svandeven]

Can anyone point me to something regarding deferrals on an owner required to take minimum distributions.

I believe that the owner which continues to work in his C Corp can continue to defer Max and use the catch up contributions and just take RMD's calculated each year on the balance but I can't find anything that confirms.

I appreciate any input.

[Mary Kay Foss]

How about Section 410 (a)(2) Maximum age conditions that says that no one can be excluded "from participation (on the basis of age) employees who have attained a specified age."