In-service distributions and RMDs

[Guest raintrain19]

I feel as though this is a fairly straight forward question, but one for which I have found conflicting answers.

If an over 70.5 Active Participant (non-owner) takes an in-service distribution as a LS, should this LS amount contain a "non-rolloverable" portion due to the RMD rules. I realize that this person is not terminated, and therefore an RMD is not required until they terminate the plan, but it would seem that if they receive all or a portion of their benefit after the age 70.5 year, a portion of that benefit should be attributed to the RMD.

Thanks in advance for your help.

[masteff]

No, because the distribution is made before the participant's required beginning date. See Reg 1.401(a)(9)-2 Q&A-4

[Guest Sieve]

Masteff --

Your cite is to a Q&A dealing with lifetime (i.e., annuity or annuity-type) distributions. I think the Q&A which answers the OP is Treas. Reg. Section 1.401(a)(9)-5, Q&A-1(a) & (b). That basically says that a minimum distribution is required for each "distribution calendar year"--defined in this case as the year in which a non-5%-owner retires & each calendar year thereafter. So, no MRD is due at this time, because this participant's first distribution calendar eyar has not arrived.

[Guest raintrain19]

I think the Q&A which answers the OP is Treas. Reg. Section 1.401(a)(9)-5, Q&A-1(a) & (b). That basically says that a minimum distribution is required for each "distribution calendar year"--defined in this case as the year in which a non-5%-owner retires & each calendar year thereafter.

401(a)(9)-5 seems to address DC plans. This is a Cash Balance Plan. Would the same rules apply?

Thanks again,

[Guest Sieve]

For the commencement of payments, I'd say Yes.

[masteff]

Masteff --

Your cite is to a Q&A dealing with lifetime (i.e., annuity or annuity-type) distributions. I think the Q&A which answers the OP is Treas. Reg. Section 1.401(a)(9)-5, Q&A-1(a) & (b). That basically says that a minimum distribution is required for each "distribution calendar year"--defined in this case as the year in which a non-5%-owner retires & each calendar year thereafter. So, no MRD is due at this time, because this participant's first distribution calendar eyar has not arrived.

Generally I'd agree w/ you but in this case, I presumed the meaning of "lifetime" from the Reg Section's title: "Distributions commencing during an employee's lifetime"... so I took it to mean "as opposed to after the ee's death". And "such as in the form of an annuity" in the 2nd sentence is illustrative of but not limited to.