QDRO Distributions/401(a)(9)

[Christine Roberts]

How long can an alternate payee (AP) leave her share of a participant's account in a plan (presume a MPP Plan/PSP arrangement). The participant is a non-5% owner and has reached NRA and may begin drawing on his benefits while still employed. The AP wants to leave her share of his benefits in the plan longer. Can she postpone distributions until the participant would be required to take distributions under 401(a)(9)? Or must she begin receiving distributions when he does? Is the answer different if she (a) does not have segregated accounts under the plans or (B) does have segregated accounts?

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[Kirk Maldonado]

Without doing any research, I would assume that the alternate payee is separately subject to Section 401(a)(9), so that the alternate payee would be able to delay distributions until the alternate payee must begin receiving distributions. Similarly, I don't think that the alternate payee would get credit for purposes of the minimum distribution rules for any amounts payable to the former employee.

[Kirk Maldonado]

Without doing any research, I would assume that the alternate payee is separately subject to Section 401(a)(9), so that the alternate payee would be able to delay distributions until the alternate payee must begin receiving distributions. Similarly, I don't think that the alternate payee would get credit for purposes of the minimum distribution rules for any amounts payable to the former employee.

[Guest]

You need to read Prop. Reg. 1.401(a)(9)-1, Q&A H-4. The employee's RBD generally governs.

[Kirk Maldonado]

Upon reading that portion of the proposed regulation, I agree with Harry O.