Minimus Bal. EE Doesn't have to process RMD

[MWeddell]

Not only is there not a de minimus rule for minimum required distributions, but the IRS has rather specifically said that's there no de minimus amount. See the last sentence of Q&A A-5 in Prop. Treas. Reg. 1.401(a)(9)-1.

There may be other ways to resolve your dilemma. If the vested account balance never exceeded $5,000 as of the time of any prior distribution, the plan document may require a lump sum payment. Starting March 22, 1999, a plan may provide that the participant be cashed out unless the vested account balance exceeded $5,000 at the time of the first age 70-1/2 payment.

Another possibility is to make the 70-1/2 withdrawal permissive, not mandatory, for current employees who aren't 5% owners or to eliminate it altogether if the plan has a 59-1/2 withdrawal option that permits partial withdrawals at least annually.

[Guest Matt Young]

Is there a minimus balance of a participant that allows an employer to NOT have to process a 70 1/2 RMD for? I have not found any info on this. It would seem insignificant to calc RMD for a bal of $3.39 for example.