RMD, Plan Termination, Successor Employer

[buckaroo]

One of my clients was aquired by a new (unrelated) employer and the old corporation terminated. The plan was terminated prior to the merger date. We are in the process of terminating the plan, but there are a number of participants over 70.5 who have account balances. Normally, if the participants are still active and not 5% owners, they are not required to receive the RMD. However, in this case, they are still active with the successor employer. They are currently being paid from the new employer under their EIN.

1) Are they still considered active employees for 401a(9) purposes?

2) IF they are still considered active employees for 401a(9) purposes, my assumption is that they do not need to receive the RMD. Please confirm.

3) Does the fact that the plan is terminated affect this in any way (other than vesting)?

[Bird]

The regs (Reg § 1.401(a)(9)-2. ) talk about "retired from employment with the employer maintaining the plan." I don't think the new employer is maintaining the plan.

I assume you're making distributions as a result of the termination and wondering whether to do RMDs before allowing a rollover? I think I'd do the RMDs.