RMD and spouse is more than 10 years younger

[John Feldt ERPA CPC QPA]

A vested terminated participant has been taking RMDs the last few years from the qualified DC plan using the ULT table (the one that assumes a 10-year younger spouse). Suppose this year we are told that, all along, their spouse (and designated beneficiary) is actually 20 years younger than they are.

Does that mean the joint table (with its larger divisor factors) is required to be used for determining the RMD?

If so, was 20% mandatory withholding missed on the non-RMD portion of the amount distributed for the prior years because those amounts could have been rolled over?

[Larry Starr]

In this situation: mandatory withholding if the RMDs could have been smaller?  I have to say my answer is "who cares".  No one is going to challenge them on the RMD (that's the way it was reported on the 1099R, right?).  Taxes have been paid. Want to take less in the future, fine.  Use the longer life expectancy. Want to continue using the shorter life expectancy (if that works for them), fine. Life is too short; eat dessert first!

Larry.

 

[John Feldt ERPA CPC QPA]

I fully agree with the who cares part, but since the question came up (is the plan required to use the better table or not), thus the question.

[chc93]

At one time (for many years, actually), I thought the joint table for spouses more than 10 years younger was optional.  Recently, I thought I read somewhere that if the spouse was more than 10 years younger, the plan was required to use the joint table.  Not sure if I can find the reference again.  Recently been using the joint table.

[Kevin C]

If the spouse is the sole beneficiary and the joint table produces a larger life expectancy, the RMD is determined using the joint table. So, it is required.  See 1.401(a)(9)-5 Q&A 4(b) & Q&A 6.  That said, I also agree with "who cares" for the prior year distributions, as long as the participant paid the taxes.