RMD for terminated participant who has rolled over her funds to an IRA

[Pammie57]

A participant terminated from a qualified plan in 2016.  She will NOT be 70 1/2 until December 2017.  When she filled out her paperwork to roll her  money to an IRA - she ask that they also distribute her RMD.  The platform rolled it all to her IRA.  The IRA provider is claiming that amount of her RMD (which no one has calculated yet) should not have been rolled and is now an excess distribution that needs to be paid out of the IRA.   She still isn't 70 1/2, but will be by year end so does that muddy the waters?

If they pay it to her - will it be considered her RMD (I guess they plan to calculate it) and can it be split between her ROTH IRA and regular IRA.  There may be more tax issues I haven't though of, but this is enough for starters.

Isn't this for the IRA to deal with  now that it is out of the plan?

[BG5150]

Qualified plans have to stand on their own when calculating and distributing RMDs (as opposed to IRAs which can be aggregated).  Was the distribution done in 2017?  If so, the plan should have paid the RMD first, then rolled the balance to the IRA.

My thoughts:  technically, the RMD (and any accrued earnings thereupon from the IRA) should be returned to the plan, and the plan should make the RMD and issue the proper (at least) two 1099-Rs.  Could the IRA pay it out?  I don't see why not, as long as the participant receives the total amount she has coming to her. 

Keep in mind, she has until 4/1/18 to take any and all RMDs.

[chc93]

Also note that it doesn't matter when in 2017 she actually attains age 70-1/2.  As long as she will attain age 70-1/2 in 2017, any distribution from the plan in 2017 will be subject to 2017 RMD.