is a minimum distribution required for a participant who is rolling hi

[MR]

ok, we're pretty sure about this one, but just want to be sure. a client hires an employee who is over age 70 1/2 and who wishes to roll his distribution into the new employer's plan. must the prior plan do a minimum distribution before rolling the balance to the new plan? what if the employee had waived the minimum with the prior plan? we think yes either way.

[pjkoehler]

Prop. Reg. Sec. 1.409(a)(9)-1, Q&A G-3 agrees with your intuition that the transferor plan has the obligation to determine the amount of the minimum distribution for the calendar year of the transfer using the employee's benefit under the transferor plan without regard to the transfer. The transferor plan may satisfy the requirement for the calendar year of the transfer by segregating the amount which must be distributed from the employee's benefit and not transferring that amount. The segregated amount may be retained by the transferor plan or paid to an escrow account with instruction to distribute the amount on or before the distribution deadline. You say that this employee elected not to receive in service distributions under the pre-SBJPA minimum distribution requirement that applies to non 5% owners on an elective basis. Therefore, the transferor plan could determine that there is no required minimum distribution for the calendar year of the transfer.