Need clarification on RMD for deceased participant

[jkharvey]

I understand that the spousal beneficiary of a participant (Defined Contribution plan) who died before his RMD (he turned 70 1/2 in 2006 and the RMD is 4/1/2007) has two options for distributions, the 5 year rule or life expectancy rule. At least, I think that's correct. Anyhow, if the beneficiary chooses the life expectancy rule her distributions must start by 12/31/2006. Can she take any of this account balance and roll it into her own IRA?

If she chooses the 5 year rule can she take the entire balance and roll into her personal IRA as long as it is all done within the 5 years?

Thank you

[Bird]

IF DOD is in 2006, the first systematic RMD isn't due until 12/31/07. (The later of the year following the year of death or the year the participant would have attained age 70 1/2.)

Without thinking about it too much, I think the spouse could take all in 2006 and roll it all over to an IRA, since there's no 2006 RMD. Actually, it appears that she could wait up to 5 years and do the same thing, as you suggest - I don't see anything prohibiting this, even if it postpones the distribution beyond the participant's age 70 1/2.

[jkharvey]

Actually, DOD is 2005 so distributions will need to start by 12/31/2006, if spouse elects the life expectancy method. Does that change your opinion?

[Bird]

Sorry. The first systematic distribution would be due then in 2006 as you first said; no change to anything else.