Correction for distributions greater than Minimum Required Distributio

[John A]

The Required Minimum Distribution for an active employee in a 401(k) plan is calculated incorrectly (caluclated using single life rather than the correct joint life calculation), resulting in too large a distribution for 2 consecutive years. The plan document does not allow for in-service distributions. Must this be corrected? If so, what is the correction (follow the overpayment correction guidelines in Rev. Proc. 2000-16)? How is the 3rd year required minimum distribution calculated (using the actual prior year 12/31 balance, or the 12/31 balance that would have resulted from paying the correct amounts)? Can this be corrected by reducing the 3rd year required minimum distribution by the amounts of the overpayments (possibly adjusted for interest) in the prior 2 years?

[rcline46]

First check the in service distributions. The Corbel document has pre retirement as in service and a separate permission for post NRA distributions. I cannot speak to other documents, but it is a place to be 'saved'. Check for things like Annuity Starting Date which is almost like NRA but for this participant has been 'postponed'.

Second, if the first fails, you have a calculation error which created the supposedly larger distribution, but not in excess of account balance! I would forget about it an go forward.