2002 Minimum Distribution Regulations

[Guest Donaldson]

Does anyone know whether a person who designates his spouse as his sole beneficiary (assume the husband and wife are the same age) can choose whether he wants to use either the Uniform Table or the Joint and Last Survivor Table, or whether he must use the Uniform Table?

The Preamble to the 401(a)(9) regulations (issued in April 2002) and all of the articles I have read on this subject indicate that in determining the amount of a person's minimum distribution (after age 70-1/2), the Uniform Table is used in all cases unless the spouse is named as the sole beneficiary and is more than 10 years younger. In this case, a person could use either of the tables, depending on whether they want a longer or shorter distribution period.

Although the Preamble says this, I could not locate any portion of the reg that states that the Uniform Table is used in all cases unless the spouse is named as the sole beneficiary and is more than 10 years younger. Does anyone have a site for this? Thank you.

[Michael Devault]

Look at section 1.401(a)(9)-5, A4. Although it isn't as straight forward as the preamble, it basically says the same thing. While the employee is still living, you use the Uniform Lifetime Table to determine the applicable distribution period.

However, if the spouse is the sole beneficiary, the applicable distribution period is the longer of that from the ULT or the joint life expectancy. Unless the spouse is more than 10 years younger, the ULT always provides the longer period.

Hope this is of some help.

[Brian Gallagher]

i'm not sure why someone would want to use the joint life model. the UT is always a lesser amount if the spouse is less than 10 yrs diff.

[MGB]

If you calculate it under the joint-life table, you are producing a distribution that is greater than the amount required under the uniform distribution table.

So, yes, you can do it (the law only specifies the minimum amount to be distributed - it doesn't preclude you from paying more), but if the person only wants the minimum, they are taking more than they need to.

[Guest Donaldson]

Thank you for your response; it clears things up for me. Ironically, section 1.401(a)(9)-5, A4(B) is what caused some confusion in the first place because it states that the applicable distribution period is the longer of the ULT or the joint life expectancy without mentioning that the spouse has to be more than 10 years younger.

Your explanation helped me to see that unless the spouse is more than 10 years younger, the ULT will always provide a longer distribution period because it is based on the joint life expectancy of a person and a hypothetical beneficiary who is 10 years younger. Accordingly, since 1.401(a)(9)-5, A4(B) says to use the longer period, the ULT will always be the longer period unless the spouse is more than 10 years younger.

Thanks again.