Surviving Spouse RMD - HELP

[Guest jvgatty]

Participant, age 78, non-5% owner, not retired up and dies in October 2013. Spouse, only beneficiary, age 76 is about to receive the distribution from the Plan. Spouse intends to do a trustee to trustee transfer into an IRA.

First, assume that her RMD is withheld from the amount eligible for distribution and direct rollover, does she need to take a second RMD prior to December 31, 2014 from her IRA.

Second, does she not take an RMD out of the distributable amount and only take one RMD after the trustee to trustee transfer of the entire amount. (We think no, because 402© prevent a rollover if the RMD is due in the same year).

Any thoughts? Help? Much appreciated.

[ETA Consulting LLC]

There is no RMD due for 2013. The surviving spouse's first RMD would be due by December 31, 2014. Keep in mind that the participant dies BEFORE his required beginning date.

Good Luck!

[ESOP Guy]

First, assume that her RMD is withheld from the amount eligible for distribution and direct rollover, does she need to take a second RMD prior to December 31, 2014 from her IRA.

Assuming the IRA the distribution went into had no other funds my understanding is there wouldn't be an RMD in 2014. My understanding is that any RMD paid in 2014 from the IRA would be based on the balance in the IRA at 12/31/2013 and that amount was zero.

[masteff]

The cite for what ERISAtoolkit said is Reg 1.401(a)(9)-3 Q&A-3(b).

Second, does she not take an RMD out of the distributable amount and only take one RMD after the trustee to trustee transfer of the entire amount. (We think no, because 402© prevent a rollover if the RMD is due in the same year).

I concur with your thinking. Reg 1.402©-2 Q&A-7.