RMD question

[Belgarath]

Client first institutes a DB plan after attaining age 70-1/2. Has a 3-year cliff vesting schedule (to delay RMD's). Suppose the end of the 3rd year is 12/31/2017.

Must the first annuity payment commence by 4/1/2018, or 12/31/2018? My reading is that he has until 12/31/2018, but I can see an argument for 4/1. Particularly if taking an annual annuity payment, it is hard to see how it really matters, since he would receive it all in the 2018 tax year anyway, but that's a separate issue. The later date seems a bit easier administratively, since the vested accrued benefit as of 12/31 often isn't known until later in the following year anyway...

[K2]

I don't see 4/1 factoring into this at all.  He is past his RBD, the only reason he wasn't paid is that is vested AB was zero.  

[Belgarath]

Thanks - that was exactly my understanding as well. But always nicer to hear that someone agrees!

[Dougsbpc]

If the participant worked 1,000 hours per year for each of the three years then the participant would have a vested accrued benefit before December 31, 2017. Wouldn't this require an RMD by December 31, 2017?