Is an RMD applicable?

[Connor]

An overfunded 1-life DB plan terminated, with the final return filed for PYE 9/30/22 - all of the assets were distributed in 2022.  An RMD was paid, the assets representing the participant's remaining PVAB were rolled over into her IRA, and the excess assets were transferred to a new 1-life qualified replacement 401(k) plan whose first PYE was 9/30/22.  The excess assets were placed in a suspense account within the QRP, with only a small portion allocated to the participant by 9/30/22.  Is only her 9/30/22 balance used in calculating her 2023 RMD, or do you have to also include the amount that's still in the suspense account for this calc? 

The plan also excludes service before the 10/1/22 effective date of the plan, so she's 0% vested since there's a graded vesting schedule and NRD has the 5 YOP requirement.  I cannot recall - is it DB or DC benefits that are always considered 100% vested for RMD purposes regardless of what the vesting schedule indicates?  If the actual vesting can be used, is she not required to take a 2023 RMD?  I'm also hoping that the terminated DB plan can be disregarded for this purpose.  Has anyone been involved in such a situation?     

[C. B. Zeller]

37 minutes ago, Connor said:

only a small portion allocated to the participant by 9/30/22

Is it at least 1/7th of the amount transferred to the replacement plan?

37 minutes ago, Connor said:

Is only her 9/30/22 balance used in calculating her 2023 RMD, or do you have to also include the amount that's still in the suspense account for this calc? 

Only the balance at the last valuation date on or before 12/31/2022.

38 minutes ago, Connor said:

The plan also excludes service before the 10/1/22 effective date of the plan

The exclusion of prior service is not valid due to the termination of the DB plan which creates a predecessor plan. See 1.411(a)-5(b)(3)(v)

[Connor]

Thank you for your responses - yes, her allocation was at least 1/7th.