First Calendar Year for purposes of RMD

IF a participant's termination date is 12/31/17 but he is employed on that date , is his first calendar year for rmd 2017 or 2018? Seems like a simple answer but we have bot opinions in the office.  PPT is 70 1/2 in 2017

I get where the other group is coming from but I have always told clients my recommendation for this is pay an RMD by 4/1/2018.  I think when an IRS agent comes in they are going to see a 2017 DOT and expect an RMD 4/1/2018.   The other answer requires you to convince an auditor you are correct. 

Like I said I get the other answer. 

If you search the board I think we have had this conversation before.  Just too late on Fri for me to do the search. 

... the term required beginning date means April 1 of the calendar year following the later of the calendar year in which the employee attains age 70½ or the calendar year in which the employee retires from employment ...

This question keeps popping up, and I think most of us (if not all) agreed that an employee "retires" on 12/31/2017.

Calavera has it right. We all should agree that the individual in this situation is NOT still employed/working on 1/1/18, so he MUST have retired in 2017.  I think it is just that simple.

Agreed. Needed a little backup for my opinion.

Thanks

FWIW, IRS agreed with this in 2004:

14. §401(a)(9) – Required Minimum Distributions and Date of Retirement

Treas. Reg. 1.401(a)(9)-2, A-2(a) provides that except in the case of a 5%-owner, the “required beginning date” is April 1 of the calendar year following the later of the calendar year in which the employee attains age 70-1/2 or the calendar year in which the employee retires from employment with the employer maintaining the plan. If December 31, 2003 is the employee’s last day at work, and the last day for which he or she is paid or entitled to payment of wages, is that the date of “retirement”. Or is January 1, 2004, the first day the employee is not employed, the retirement date? When is the employee’s required beginning date?

Proposed response:

"Retirement” is the last day worked, not the definition of retirement date in the plan. What date is an employee’s last day worked is a facts and circumstances determination. The facts and circumstances are based on the employer’s practice concerning the last day an individual is considered an employee.

IRS response:
The IRS agrees with the proposed response and noted that they have never defined “retirement.” Based on the facts in the described situation, the participant’s date of retirement would be December 31, 2003.

https://www.americanbar.org/content/dam/aba/migrated/2011_build/employee_benefits/2004_irs.authcheckdam.pdf