RMD EXCEPTION R/O TO SAME EMPLOYER

[Rob P]

A client has decided to terminate one of their two pension plans.  They are not merging assets (403b and a 401a).  An active employee who is over age 70.5 has been deferring receipt of their RMD.  That employee has elected to rollover their benefit from the terminated plan into the continuing plan.  We are processing as a rollover and will be issuing a 1099.

Question:  Is an RMD required to be distributed from the terminating plan prior to the rollover?

If the participant were to rollover to an IRA I would say the RMD is required, but I cannot find if there are any exceptions since it’s the same sponsor.

Any input is appreciated.

[jpod]

I don't see how there would be an RMD because the employee has not reached his/her RBD.  For that reason I also question your assumption about a rollover to an IRA.  

[ESOP Guy]

I am with Jpod.  The rules say you pay RMDs when the person terminates not the plan terminates.