Required Minimum Distribution Plan Amendment

[Guest sheTexasHammer]

Does anyone know if there is some sample language for amending a Plan in light of the waiver of required minimum distributions under Section 401(a)(9) for calendar year 2009?

[J Simmons]

Haven't heard of any model language for this purpose from the IRS.

[WDIK]

Has the IRS indicated that an amendment to the plan document will be required?

[Guest Sieve]

I think whether a plan must be amended will depend on plan language. Most plan specify how the MRD will be calcualted each year so that it can be distributed, so they presumably will have to be amended to suspend MRDs pursuant to the statutory suspension. If not amended, then skipping an MRD distribution would be a violation of plan provisions.

[masteff]

I think whether a plan must be amended will depend on plan language. Most plan specify how the MRD will be calcualted each year so that it can be distributed, so they presumably will have to be amended to suspend MRDs pursuant to the statutory suspension. If not amended, then skipping an MRD distribution would be a violation of plan provisions.

That was my thought.

Keep in mind that even if the plan text mandates a distribution, it's not an MRD for the participant's individual taxes, meaning the distribution could be rolled over.

[Guest Sieve]

Important point to keep in mind.

[Kevin C]

WRERA section 201©(2) allows a retroactive amendment to be adopted by the last day of the plan year starting on or after 1/1/2011 as long as the plan is operated as if the amendment were in effect during the 2009 calendar year. I imagine it will be a while before we get model language since the IRS has so many other more pressing issues to deal with.

http://benefitslink.com/boards/index.php?showtopic=41153

Don't forget that substantially equal installments over the life expectancy of the participant are not eligible for rollover. If they are voluntarily taking what would have been taken as an RMD, the calculation method makes it an installment. If they are otherwise eligible for a distribution and receive a partial or total distribution, then it would be eligible for rollover.