Partic dies in year of first RMD

[BG5150]

Participant turned 70 1/2 this year and died in late November.  His RBD is 4/1/19.  Spouse wants to roll over the entireaccount now.

I believe the RMD must be taken first.  Others in my office are sticking to the RBD of 4/1 and she can roll out the entire amount.

Who is correct?  Cites?

[ESOP Guy]

I have always understood the answer to be the RMD has to be paid this year if the beneficiary is being paid this year. 

I believe if you read very carefully the plan document it will get you to that point as the document simply repeats the law on this subject. 

[Tom Poje]

the ERISA Outline Book has

Chapter 6 Section VII  Part A

3.a.Different rule for participants who die before RBD. If a participant dies before the RBD, the first distribution calendar year is generally the calendar year that immediately follows the year of the participant's death, unless a five-year rule is used to satisfy the minimum distribution obligation. For more details on death before the RBD, see Part F of this section.

 

you could look at 1.401(a)(9)-3 Which has the title

Death before required beginning date

[BG5150]

So, no 2018 RMD it seems.

[Larry Starr]

6 hours ago, BG5150 said:

Participant turned 70 1/2 this year and died in late November.  His RBD is 4/1/19.  Spouse wants to roll over the entireaccount now.

I believe the RMD must be taken first.  Others in my office are sticking to the RBD of 4/1 and she can roll out the entire amount.

Who is correct?  Cites?

Natalie says (and Natalie is ALWAYS right!) NO RMD (and you have all the cites!).  See last  paragraph for summary.

[Appleby]

On 12/6/2018 at 1:38 PM, BG5150 said:

So, no 2018 RMD it seems.

No RMD, because death occurred before the RBD.

[Appleby]

On 12/6/2018 at 4:53 PM, Larry Starr said:

Natalie says (and Natalie is ALWAYS right!) NO RMD (and you have all the cites!).  See last  paragraph for summary.

Agree. And agree about Natalie.

[jsample]

Would the answer remain the same if a 401(k) plan terminated rather than if the participant died?

401(k) plan terminated 11/1/2018.  The first RMD for a participant was 4/1/2019.  She  requested a rollover of her entire balance into an IRA before 12/31/2018.  My research in this scenario had me believe that the RMD had to come out prior to rollover into IRA, even though her first date, if the plan was still in existance, was 4/1/2019.

.

[Mike Preston]

You are correct.

[Larry Starr]

34 minutes ago, Mike Preston said:

You are correct.

Yes indeed; it is a completely different scenario with a completely different result.

[jsample]

Thank you.