Term Certain Annuity and RMD

[AF2019]

If a participant in a Defined Benefit Pension Plan chooses to take a 5 year (60 month) term certain annuity, can those payments be directly rollover over to an IRA?  What if the participant is  over 70 1/2?

 

[Big Tuna]

Can't roll annuity payments. Believe that's in 402c

 

Edit: Agree with NJ Mike.

[NJ Mike]

My understanding was that the annuity exception applies to annuities over a life expectancy or for at least 10 years.  If the period is less than 10 years, each payment is an eligible rollover distribution.  See Letter Ruling 9429026.

As far as payments after age 70 1/2, if they are RMDs they are not eligible rollover distributions.

Mike

http://www.legalbitstream.com/scripts/isyswebext.dll?op=get&uri=/isysquery/irl5f20/1/doc

[Dave Baker]

NJ Mike, do you have another link to the article? The one in your message is producing a "page not found" error. Thanks!

[NJ Mike]

Try going into the Legal Stream website and type in the PLR # in the search box.

http://www.legalbitstream.com/irs_materials.asp?pl=i9

If that does not work I've attached a copy of the PLR.

Mike

PLR 9429026.docx

[AF2019]

How is the RMD calculated for this individual?

[Big Tuna]

It would be that the annuity payments are not eligible for rollover. No exception for the term less than 10 years since passed RBD. And assuming the entire vested benefit is being paid on the 5-year term certain.