RMDs

[jpod]

DB plan pays out Year 2's January monthly payments to retirees and surviving spouses late in December of Year 1, rather than in early January of Year 2 as would normally be the case. Consequently, they each receive 13 payments in Year 1 and only 11 payments in Year 2. Is there anything in the 401(a)(9) regulations or other guidance that says there is no RMD violation in Year 2? (Forget for the moment about whether VCP could cure this, or whether there is "reasonable cause" to avoid the excise tax, or whether IRS would really have any interest in enforcement here.)

[rcline46]

1. who thinks up these things?

2. make that person, lawyer or not, give a written opinion of why its ok or not

[Bird]

I think it is safe to say the regs do not have specific guidance on this fact pattern. But I think they are "periodic payments" where one just happened to be made a few days earlier than usual.

[mbozek]

I though there was something in the regs which required that the recurring RMD must be made at least every 12 months without specifying that it must be made every month.

[masteff]

Reg §1.401(a)(9)-6 which is specific to DBs talks to the form of the annuity and that it satisfies 401(a)(9). Nothing was altered about the form of the annuity by a few days change in the timing of the payment. Since the annuity isn't altered then it continues to satisfy 401(a)(9) so the tax year of an individual payment is moot.