Is RMD required?

[Jakyasar]

Hi

Owner only DB plan, wants to terminate and distribute during 2025

Already turned 73 during 2025 i.e. first RMD is due 4/1/2026.

Needs an RMD during 2025 i.e. split the distribution between rollover and RMD?

In a different scenario for the same owner, plan is overfunded but only wants to rollover the full benefit and keep the plan open as will hire others to eat up the overfunding. As this in-service distribution will happen during 2025, is it subject to RMD during 2025 i.e. before the rollover?

Thanks

[Bill Presson]

I can’t envision a circumstance where an RMD isn’t required. 

[Jakyasar]

Me too unless the rollover happened before turning 73 which is already too late.

[CuseFan]

Yes, if total lump sum distribution must split between RMD and non-RMD. I assume owner is at 415 limit, but hiring employee(s) solely for the purpose of earning pension accruals and using up the excess? Unless close friends or family members, why? 

[Artie M]

Agree on RMD.  Also, he might want to talk to his actuaries, etc. to determine if terminating the DB and transferring all (or a sufficient part) of the potential reversion to a qualified replacement plan may be able to be structured to provide more favorable outcomes.  May or may not but won't know without asking.

[Jakyasar]

9 hours ago, CuseFan said:

Yes, if total lump sum distribution must split between RMD and non-RMD. I assume owner is at 415 limit, but hiring employee(s) solely for the purpose of earning pension accruals and using up the excess? Unless close friends or family members, why? 

Of course they are family members

[Jakyasar]

6 hours ago, Artie M said:

Agree on RMD.  Also, he might want to talk to his actuaries, etc. to determine if terminating the DB and transferring all (or a sufficient part) of the potential reversion to a qualified replacement plan may be able to be structured to provide more favorable outcomes.  May or may not but won't know without asking.

Agree but dealing with different circumstances