RMD and Beneficiary is More Than 10 Years Younger

[emmetttrudy]

the RMD calc rules require a separate table of factors if the participant receiving the payout is married, their spouse is more than 10 years younger, and the spouse is the designated beneficiary.

Does anyone know of any specific exception to this rule - for example, if you are unable to acquire the beneficiary information, is it ok to just use the Uniform Life Table I?

[masteff]

Is the participant still alive?

Actually, the rule if the spouse is the sole beneficiary is to use the better of the Uniform Life Table or the joint life table (Reg 1.401(a)(9)-5 Q&A-4(b)(1)). The Uniform Life Table is equal to the joint table using a bene who is 10 years younger. If you lack the proper information to make the determination of the spouse's age, then (in my opinion) use to the Uniform Life Table as if you hadn't/couldn't determined the designated beneficary.

Also see IRS Pub 590

[emmetttrudy]

Yes, the participant is still alive. Correct, for a spouse (sole beneificary) who is 10 years younger or less than 10 years younger, the Uniform Life Table would be used. I just couldnt find anywhere in the regs that deals with the situation of not having the spouse's information. We dont normally collect it.

[masteff]

Arguably, that's a key part of the simplification that was introduced by the 2002 401(a)(9) regulations... default to the Uniform Life Table. I'd frankly put the burden on the participant if the plan sponsor hasn't otherwise collected the spouse's DOB. I certainly don't see the plan having a burden since the Uniform Life Table will result in the larger of possible distributions and thus will satisify the required distribution under all scenarios of the spouse's age.

[Bird]

So...how do you know the spouse is more than 10 years younger if you don't have that info?!

Arguably, you've failed to comply with the terms of the plan (which directly or indirectly references that rule) if you use the Uniform Life Table when the spouse is more than 10 years younger, but I don't know that I'd be too worked up over it. It does seem you need to have some kind of caveat that goes with the calcs that says "but if your spouse is more than 10 years younger than you please provide a DOB so we can make the correct calculation."