ROBS Plan - RMD?

Hi Folks!

I know that in some cases attribution through a retirement plan trust is blocked for purposes of determining HCE and Key status. 

Is the same true for determining 5% owner status for purposes of an RMD?

If that's not the right question please let me know. 

ROBS plan - the participant turned 72 in the second half of 2022. Their account of course holds the employer stock. they are very much an active employee. 

I'm thinking the constructive ownership of §318 applies and an RMD is required. But I'm wondering if I'm missing something. 

Can anyone confirm or deny?

justanotheradmin, doesn't 318(a)(2)(B)(i) tell you not to attribute from the 401(a) plan to the participant?

One might consider these steps to follow Luke Bailey’s line of inquiry.

“For purposes of section 401(a)(9), a 5-percent owner is an employee who is a 5-percent owner (as defined in section 416)[.]” 26 C.F.R. § 1.401(a)(9)-2/Q&A-2(c).

That section defines: “For purposes of this paragraph, the term ‘5-percent owner’ means— (I) if the employer is a corporation, any person who owns (or is considered as owning within the meaning of section 318) more than 5 percent of the outstanding stock of the corporation or stock possessing more than 5 percent of the total combined voting power of all stock of the corporation[.]” Internal Revenue Code of 1986 (26 U.S.C.) § 416(i)(1)(B)(i)(I).

That section provides: “Stock owned, directly or indirectly, by or for a trust (other than an employees’ trust described in section 401(a) which is exempt from tax under section 501(a)) shall be considered as owned by its beneficiaries in proportion to the actuarial interest of such beneficiaries in such trust.” I.R.C. § 318(a)(2)(B)(i) (emphasis added).

Accord 26 C.F.R.§ 1.416-1/Q&A-17, Q&A-18.

For thoroughness, one might check whether the proposed rules to interpret and implement Internal Revenue Code § 401(a)(9) answer the question similarly or differently.