Required Minimum Distributions

[Guest terid]

I have a participant who began his RMD's in 1998. This participant is not a 5% owner and he is still employed.

My understanding on Notice 97-75 Q&A 7 & 8, is that employees are able to cease their RMD until they retire.

The plan does not have in-service distributions, so does the participant have to cease these payments? What about the RMD's they have taken the past 4 years?

[david rigby]

IRS Notice 97-75 states that a plan can permit RMD distributions to cease in certain circumstances. Does your plan contain such provision?

Note that A-8(a) lists the general requirements of operation and amendment:

"A plan will not violate section 401(a)(11) and section 417 on account of an employee's cessation and recommencement of distributions in accordance with Q&A-7(a) if the plan operationally complies with either paragraph (B) or © of this Q&A-8, the plan is amended within the remedial amendment period for the plan for SBJPA changes to reflect that operational compliance, and the distributions stop prior to the end of that remedial amendment period.

[Guest terid]

Yes, our plan has that provision.