RMD for someone over 70.5

[emmetttrudy]

Cash Balance Plan effective 1/1/2014.

Service prior to effective date excluded for vesting purposes.

Owner becomes vested in 2016.

When is his first RMD due?

[Effen]

When did the owner turn 70.5?

[Tom Poje]

I don't think the RMD date changes, but how things are handled..

(I can only assume you must have a 65/5 or something and you are talking about a situation where the person is 0% vested).

if it was a DC plan, then 1.401(a)(9)-4 Q 8 kicks in...if the total amount of the vested benefit is less than the required amount only the vested portion if any is required to be distributed...however the required distribution in future years must be increased by the sum of the amounts not distributed in prior years.

in other words, if the person is 0% vested the first year, yes he is due a distribution but you can't pay anything because if he quit at 0% he couldn't get anything.

how that works in the DB world I don't know, but I guess if you are allowed to treat a Cash Balance similar to a DC plan, then you keep a running total of what is due.

[emmetttrudy]

woops - my apologies I left out that important information! the owner turned 70.5 in 2013 so his required beginning date was 4/1/2014.

[Effen]

If he was vested on 12/31/15, then I would say 1/1/16. But if he was not vested on 12/31/15, then I would say 1/1/17.

1.401(a)(9)-6 Q-6. If a portion of an employee's benefit is not vested as of December 31 of a distribution calendar year, how is the determination of the required minimum distribution affected?

A-6. In the case of annuity distributions from a defined benefit plan, if any portion of the employee's benefit is not vested as of December 31 of a distribution calendar year, the portion that is not vested as of such date will be treated as not having accrued for purposes of determining the required minimum distribution for that distribution calendar year. When an additional portion of the employee's benefit becomes vested, such portion will be treated as an additional accrual. See A-5 of this section for the rules for distributing benefits which accrue under a defined benefit plan after the employee's first distribution calendar year.

[Calavera]

Generally on a 3-year 100% vesting setup, the first RMD should be due 1/1/2017