RMD for off-calendar, pooled plan--what balance to use?

[BG5150]

For the first time ever, I have an off-calendar, pooled profit sharing plan.  PY is 4/1 to 3/31.

We need to do some RMDs.

No contributions.  Only withdrawals and earnings.

What val date do I use for the 2026 RMDs?  3/31/25?  OR 3/31/2026?

[Peter Gulia]

The Treasury’s rule to interpret and implement Internal Revenue Code § 401(a)(9) includes this:

(b)   Determination of account balance —

(1) General rule. In the case of an individual account under a defined contribution plan, the benefit used in determining the required minimum distribution for a distribution calendar year is the account balance as of the last valuation date in the calendar year preceding that distribution calendar year (valuation calendar year) adjusted in accordance with this paragraph (b). For this purpose, all of [a participant’s] accounts under the plan are aggregated. Thus, all separate accounts, including a separate account for employee contributions under section 72(d)(2), [but not a designated Roth account, and not the value of a qualifying longevity annuity contract] are aggregated for purposes of this section [26 C.F.R. § 1.401(a)(9)-5].

(2) Adjustment for subsequent allocations and distributions —

(i) Subsequent allocations. The account balance is increased by the amount of any contributions or forfeitures allocated to the account balance as of dates in the valuation calendar year after the valuation date. For this purpose, contributions that are allocated to the account balance as of dates in the valuation calendar year after the valuation date, but that are not actually made during the valuation calendar year, may be excluded.

(ii) Subsequent distributions. The account balance is decreased by distributions made in the valuation calendar year after the valuation date.

26 C.F.R. § 1.401(a)(9)-5(b) https://www.ecfr.gov/current/title-26/part-1/section-1.401(a)(9)-5#p-1.401(a)(9)-5(b).

If a plan’s administrator follows that rule:

If the plan has only one valuation date in each year, that date is each March 31, and 2026 is the distribution calendar year for which one calculates a minimum distribution:

March 31, 2025 balance

plus contributions and forfeitures allocated (or allocated and made) April 1 through December 31, 2025

minus distributions made April 1 through December 31, 2025

equals account balance to determine the 2026 minimum distribution.

This is not advice to anyone.

[Bill Presson]

Peter is spot on.