RMD in years following death of participant

[thepensionmaven]

We have a sole participant DB plan, the owner died, having taken one RMD from the plan.

No distributions were taken in '05.

Is the RMD for '05 calculated on his single life expectancy or the beneficiary's? The beneficiary is under 70 1/2.

Would the beneficiary have to take a distribution prior to the rolloveer of the plan to an IRA, on whose life expectancy is it calculated, and why???

Thanks,

Steve

[ERISAnut]

Situation1: Participant Died prior to Required Beginning Date

Payment: In order for payout over the life expectancy of the beneficiary, first payment must begin by December 31 of the year following the year of death. The payment will be calculated on the beneficiary's single life expectancy for the year of first distribution (minus 1 for each subsequent year) This assumes a non-spouse beneficiary.

Situation2: Participant Died after reaching Required Beginning Date

Will not touch whether the RMD's were satisfied during the participant's life time.

The RMD for the year of death must be calculated as if the participant did not die. This RMD is distributed to the beneficiary. In subsequent years, the distributions are calculated on the beneficary's life expectancy. However, the calculation of the beneficary's life expectancy is the longer of two periods 1) the life expectancy of the participant in the year of death reduced by one for each subsequent year or 2) the life expectancy of the beneficiary in the year of 1st payment reduced by one for each subsequent year. This also assumes the beneficiary is not the spouse.

The spouse's life expectancy is always recalculated and the spouse also has additional options to delay distribution in the event the participant was not age 70 1/2.

With that said, there is a huge lack of detail in your question.

[Guest mjb]

I am not following this line of reasoning. Under the RMD regs (1.409(a)-6 A-1) DB benefits are paid to the participant as a periodic annuity (at least annually) for the employee's life or joint life of employee and bene (who usually is the spouse) in whatever amount provided under the plan, e.g, 50% J & S in the month after the part dies. If part was receiving 10k a month a 50% J &S of 5k would be paid. There is no calculation of an RMD based on part. life because those rules apply to a DC plan (unless it is was a DB plan which was granted an exemption from the RMD regs for 04 and 05. )

Q what does the plan provide as the benefit to be paid after the death of the part and when does benefit commence?

[thepensionmaven]

I thought the question was clear, obviously not, and I am sorry.

The participant died after having taken one distribution about one month prior to his death.

The beneficiary is the spouse, who is NOT 70 1/2.

But I think you answered my question when you stated that "in subsequent years, the distributions are calculated on the beneficiary's life expectancy." Do you have a cite for that?

Thanks.

[ERISAnut]

401(a)(9). Distributions after required beginning date.