RMD in first year of DB plan

[SoCalActuary]

A new pension plan started in 2004 has a 5% owner over age 74.

Assume the beginning accrued benefit is $1,000 per month payable 1/1/2009 on the fifth anniversary of entry, and that the end accrued benefit is $1,200 per month (both for the 2004 plan year)

The beginning date for minimum payments in 2004 is:

1. Nothing, since the plan was signed in December 2004, or

2. Nothing, since there was no prior accrued benefit, or

3. 4/1/2005

If so, is the minimum distribution based on the reduced actuarial equivalent of the future benefit $1,000 accrued benefit or the $1,200 accrued benefit.

Does it matter that the plan is not funded for 2004 until September 2005?

I looked at the new 401a9 regs, and they don't make clear what accrued benefit to consider, nor the required beginning date for this circumstance.

[david rigby]

Vested?

[rcline46]

RMD is -0- because it is based on PRIOR year valuation (date) and there is no prior year. The new regs did not make any change to that rule as far as can see.