Required minimum distribution calculation

[Guest Turtle_01]

I need some help with the following RMD:

Participant is a terminated vested non-5% owner. Employer was unable to locate him until this year, which is why he did not go into pay status at age 65.

Plan actuarial equivalence = UP84 (pre and post retirement mortality) @ 7.00%

DOB = 10/1/1933

Initial distribution year = 2004 (first RMD must be paid by 4/1/2005)

Monthly accrued benefit at 12/31/2003 = 165.93

Age at 12/31/2003 = 70.25

Present value of AB at 12/31/2003 = 165.93 x 90.5175 = $15,019.57

Applicable divisor from Uniform Life Table = 26.5 (using participant's age in 2004)

Required Minimum Distribution that must be paid by 4/1/05:

$15,019.57 / 26.5 = $566.79

Two questions:

1) Is the above calculated correctly?

2) How do you calculate the amount of the next Required Minimum Distribution (that must be paid by 12/31/2005)? (Please use actual numbers)

[MGB]

You are applying DC rules. A DB plan should pay out the monthly accrued benefit beginning with the required beginning date.

[Guest Turtle_01]

So there is no option? You have to begin payment of the full vested accrued benefit (in this case we would begin monthly payments on 4/1/2005 of his benefit calculated as of 4/1/2005)?

[WDIK]

You can find a previous discussions here.

[AndyH]

Turtle, many are still using the "account balance method" through 2005, reasonable or not. Next year is a different story.