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Alternate Payee RMD


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the participant is 72 (already reached RBD).  ex wife does not receive her share of account pursuant to QDRO until 2017. does ex spouse have to pay her share of the 2017 RMD?  she had no account to value as of 12/31/2016 therefore i would say no RMD due from her. anyone agree or disagree?

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Agree.  Since the Alternate Payee's RMD calculation for 2017 is based on her account balance on 12/31/2016, there is no RMD for her for 2017.  Her first RMD must be made by 12/31/2018 based on her account balance on 12/31/2017.  Although a portion of the Participant's account balance was/will be transferred to the AP in 2017,  IRS PLR 9011031 appears to require the Participant's RMD calculation for 2017 to be based on his entire account balance as of 12/31/2016 with no adjustment for the transfer to the AP.

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  • 2 years later...

taking this question a step further, the alternate payee has left their transferred balance in the group plan, essentially becoming a non-contributing participant.  assets were transferred during 2018, and the alternate payee is already over 70 1/2.  does the alternate payee take a 1st RMD from the plan for 2019, by 12/31/19 or by 4/1/20?  thanks for any guidance!

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JulesInCNY, the AP is required to start taking RMDs in the year the Participant hit his required beginning date (so the RBD for the AP is based on the participant's age,  employment status, and 5% ownership status, not the AP's info). 

As far as your 4/1 question, the participant hit his RBD in the year before the QDRO split occurred, so the AP would have to take her RMDs by 12/31 of each year (i.e., no 4/1 delay since the participant's RBD occurred in an earlier year).

So, if AP received a portion of his account balance in 2017, AP should have received RMDs by 12/31/2018 and 12/31/2019 already. 

If you know the participant is still alive, the AP's RMD is determined by dividing the AP's prior year separate account balance by the Participant's uniform lifetime table factor based on his age in the year of distribution (rather than the AP's uniform lifetime table factor using her age in the year of distribution).  If you know the participant died after RBD, then the AP's RMD would be determined as if she was a surviving beneficiary of the Participant - that is, by dividing her prior year separate account balance by longer of the remaining single life expectancy of the participant (determined based on age in year of death and reduced by 1 each year since the year of death) or the single life expectancy of the AP (determined based on AP's age in current year). Hope this helps. 

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  • 2 weeks later...

thanks for this.  of course this particular situation wasn't brought to our attention until after 12/31/19, so there was nothing we could do to get the RMD paid out by then.  but this is helpful should the situation ever arise again and we can catch it in time.

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