DB 70.5 Minimum Distributions - 2006

[zimbo]

The new 401(a)(9) rules for DBs are in effect for 2006 and I see lots of unanswered questions. Some issues worthy of discussion:

1. What distribution method works best for most clients? I have come to think that term certain with a payment period equal to the "uniform lifetime method" may work best because (a) it produces a lower minimum than the normal annuity options, (2) it allows for a death benefit whereas it appears that the other annuity options only allow for whatever the option calls for (i.e., life annuity would have NO death benefit) (3) you could change payment options at any time rather than just at retirement or plan termination.

2) Is spousal waiver out of QJSA required for any payment option except QJSA? Must we give a full range of payment options or can the plan choose one method without employee selection?

3) Must the plan document, when amended to the new rules by the EGTRRA restatement date, specify the exact option?

Would welcome any feedback of this preliminary analysis