Required Minimum Distribution

[dmb]

Multiple (not multi) employer calendar year DB plan freezes 12/31/08. One of the employers pulls out of multiple employer and starts their own calendar year plan effective 1/1/10. Benefit Formula allows for some past service. A participant who is 75 years old in 2010 would otherwise be required to take RMD by 12/31/10, but my question is would there be an RMD from this new plan since there was no plan and/or accrued benefit at 12/31/09?? Any cite would also be appreciated. Thank you.

[david rigby]

No cite, but common sense (OK, that rarely applies to regulatory agencies or Congress) indicates that the EE had an accrued benefit, so RMD should apply.

[dmb]

No cite, but common sense (OK, that rarely applies to regulatory agencies or Congress) indicates that the EE had an accrued benefit, so RMD should apply.

So even though there was no plan at 12/31/09, the fact that there was an accrued benefit on 1/1/10 (due to past service) would suggest teh RMD would apply. Thanks.

[masteff]

I think the 12/31 of the prior year thing primarily applies if it's being treated as a distribution from an individual account plan, such as is provided for in Reg 1.401(a)(9)-6 Q&A-1(d)(1). I'm only passingly knowledgable w/ DB MRD's so I won't try to guess at which methodology you should use.

[david rigby]

So even though there was no plan at 12/31/09, ....

There was a plan at that date. The form of the plan changed, but the accrued benefit still existed.

[dmb]

So even though there was no plan at 12/31/09, ....

There was a plan at that date. The form of the plan changed, but the accrued benefit still existed.

The participant has an accrued benefit under the frozen multiple ER plan that he receives an RMD from, but should he also receive an RMD from the new single employer plan effective 1/1/10?