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Minimum Distribution at 70-1/2

Guest Dan Gould

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Guest Dan Gould

It seems I may have been under a rock for a while. I just read that the 70-1/2 minimum distribution rule was changed back in 1996 or 1997 to the effect that as long as an employee is still in active service after 70-1/2, there is no age-driven minimum distribution required.

Does that change, if I am understanding it correctly, apply to a Governmental 401(a) plan?

If so, does the change supercede our Plan Document provision requiring that minimum distribution?

If it applies to our Plan, do we have to immediately change the Plan Document to incorporate this change in Federal statute (i.e. is that okay if we wait for some other changes to accumulate, so long as we don't enforce it?)


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  • 2 weeks later...

Yes, it applies to governmental plans. However, the minimum distribution rule imposes only the minimum which is required to be distributed, so a plan rule requiring faster distributions would not be invalidated by it. Thus, you are not required to amend your plan to comply with it. However, if your plan incorporates a distribution schedule which was based on (but did not incorporate by reference) the old 401(a)(9) rules, you could amend it if you wanted to permit longer distributions.

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The opinions of my postings are my own and do not necessarily represent my law firm's position, strategies, or opinions. The contents of my postings are offered for informational purposes only and should not be construed as legal advice. A visit to this board or an exchange of information through this board does not create an attorney-client relationship. You should consult directly with an attorney for individual advice regarding your particular situation. I am not your lawyer under any circumstances.

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