PS58 and MRD's

[TBob]

I am somewhat familiar with insurance policies within a retirement plan. I don't like insurance in retirement plans but it is something I am forced to deal with.

PS58 costs for the year are reported on a 1099. A question came up today regarding a participant who is receiving Minimum Required Distributions each year and also has a policy in the plan. The question is...Does the PS 58 Cost satisfy all or a portion of the MRD requirement for the year?

I want to say "no" but I don't have any backup for that conclusion and I am not sure where to start looking.

Any help from all you insurance and tax guru's would be much appreciated.

[Harwood]

From the regs:

(b) Exceptions. The following amounts are not taken into account in determining whether the required minimum amount has been distributed for a calendar year:

(1) Elective deferrals and employee contributions that, pursuant to § 1.415– 6(b)(6)(iv), are returned (together with the income allocable to these corrective distributions) as a result of the application of the section 415 limitations.

(2) Corrective distributions of excess deferrals as described in § 1.402(g)- 1(e)(3), together with the income allocable to these distributions.

(3) Corrective distributions of excess contributions under a qualified cash or deferred arrangement under section 401(k)(8) and excess aggregate contributions under section 401(m)(6), together with the income allocable to these distributions.

(4) Loans that are treated as deemed distributions pursuant to section 72(p).

(5) Dividends described in section 404(k) that are paid on employer securities. (Amounts paid to the plan that, pursuant to section 404(k)(2)(A)(iii)(II), are included in the account balance and subsequently distributed from the account lose their character as dividends.)

(6) The costs of life insurance coverage (P.S. 58 costs).

(7) Similar items designated by the Commissioner in revenue rulings, notices, and other guidance published in the Internal Revenue Bulletin. See § 601.601(d)(2)(ii)(b) of this chapter.

[TBob]

Beautiful!!! Thank you Harwood!