Required Minimum distribution to nonspouse beneficiary

[LIBERTYKID]

A defined benefit plan permits a participant to designate a nonspouse beneficiary. The form of benefit is a life annuity. If the participant dies at age 45, the plan provides that the nonspouse beneficiary can wait until early retirement age (55) or normal retirement age(65) to commence receiving distribution. But the IRS model 401(a)(9) language appears to state that the benefit to a nonspouse beneficiary must commence by the end of the fifth year after the date of death. But I read reg. 1.401(a)(9)-6 q&a 10 to say that the five year rule can be ignored. Which is correct?

[Guest Sieve]

The reg. you refer to applies when distributions comenced prior to death, but your facts seem to indicate that distributions here had not commenced before death. In any event, the 5-year rule applies only if the plan's provisions require that distribution period to apply to a non-spouse beneficiary (which many plans do provide) or if there is no designated benficiary (very rare). But, to prevent the 5-year rule from applying, it is also necessary that the non-spouse beneficiary commence life-expectancy distributions by 12/31 of the year following the year of death.