Required minimum distribution/installment payments

[pmacduff]

ok - I have a non-owner plan participant who turned 70 1/2 on 11/12/2011 & retired as of 12/30/2011. He has been taking monthly distributions from the Plan. A level amount of $2,000 a month for some time now. I don't believe the payments were formally set up as installment payments per se but that's bascially what they have been.

If the monthly payments do not cover the calculated RMD, does the participant have to take a lump sum equal to the difference? I know if a participant receives annuitized payments from a plan that they don't have to take the RMD above and beyond, but I wasn't sure about installment payments.

In this case the payments weren't based on anything other than an amount the participant chose to receive at the time five or so years ago when he cut his hours back. The amount has never changed.

thanks in advance.

[ETA Consulting LLC]

He would have to, at the very least, receive his calculated RMD based on his age and account balance each year. The installment exception to that works on a payout over the calculated life expectancy as opposed to an abitrary amount.

Good Luck!