Required Minimum Distribution (0% Vested)

[emmetttrudy]

DB plan originally effective 1/1/2011. Son is 100% owner. Mother (100% owner by attribution) becomes a participant on 7/1/2011. Servcie prior to effective date of plan is excluded for vesting so at end of 2011 plan year Mother's hypothetical account balance is $800 but her vested hypothetical account balance is $0. Her DOB is 2/12/34. Are there any RMD considerations for 2011? Or does she actually have to have a vested accrued benefit, in ehcih case her first RMD would not be until 2013?

NRA is defined as 65/5 so that would not make her 100% vested.

[Effen]

MRD's only apply to vested benefits. If not vested, no MRD.

[emmetttrudy]

MRD's only apply to vested benefits. If not vested, no MRD.

Ok, I figured. So my next question is let's assume she works 1,000 hours (vesting requirement) in 2011, 2012 and 2013. The CB Plan has 3 year cliff vesting. Her first RMD would be due on 12/31/201, correct?

[ESOP Guy]

It has been a very long time since I have had one of these and it was in a DC plan, not a DB plan.

But decided what Q&A 8 means for you.

http://law.justia.com/cfr/title26/26-5.0.1.1.1.0.2.50.html

just in case the link doesn't work I am refering to

§1.401(a)(9)-5, Q&A-8,

If you have Sal's book it might help to start there on this question.

[Effen]

DB rules are NOT like DC rules anymore. DB rules say you commence the accrued benefit on the 4/1 following 70.5.

In your example, I would say that the monthly accrued benefit derived from the 12/31/13 cash balance account would need to commence on 4/1/2014.

[Tom Poje]

the corresponding DB for nonvested is 1.401(a)(9)-6 Q-6