RMDs for < 5% Owner still Working-401k Plan

Is there an additional requirement that if an Owner who is LESS than a 5% owner, over age 70 1/2 and is still employed MUST take RMDs because they are in a "position of control" with the Plan Sponsor/Employer?  The TPA is stating this to our client, but I haven't been able to easily find anything requirement this by the IRS.  Perhaps it's a Plan Document requirement?  Trying to find an answer for the Owner/Employee.  They actually serve as the "Chairman of the Board".  Not really sure how much "control" they really have.  

Your help is greatly appreciated!

Of course check the plan document, but that seems unlikely.  Your either fish (a 5% owner) or foul (not a 5% owner); that one may be in a "position of control" is of no consequence.  I assume you've run through the various ownership attribution rules and concluded that the individual is not a 5% owner by attribution.

Yes, NO attribution.  Very Very Large Law firm...of course!

Date of birth please. 

Sept 14, 1945

Were they formerly a 5% owner? If they were a 5% owner during 2016 (since that was the year they turned 70.5) then they have to continue taking RMDs, even if they later became a non-5% owner.

19 minutes ago, ERISAGal said:

Sept 14, 1945

Were they a five percent owner at any time during 2016?

Never were a 5% owner

4 minutes ago, ERISAGal said:

Never were a 5% owner

Then no RMD'S. A document can be drafted to require distributions that are similar. 

Could the document have been drafted to now require this stricter language (ie-primary control person required to receive RMDs)?  We are requesting it...Would the IRS allow for this type of language?

Yes. Sure. 

Ask the law firm  TPA to cite their reason.

Simple answer: the TPA is wrong (it wasn't a law firm that said this, but that wouldn't make an iota of difference). 

From Book of Mormon, there is a song that covers this: "You're making things up again, Arnold, you're taking the holy book and adding fiction!".

Yup, that's what they are doing. Tell them they are wrong. Ask them to prove they are right (they can't).

Larry.

Quote

 

I'm sure Larry is right. Most likely they assumed he was 5% or didn't understand how hard it is to "retire" for this purpose, and now are not admitting they made a mistake.

23 hours ago, Larry Starr said:

Simple answer: the TPA is wrong (it wasn't a law firm that said this, but that wouldn't make an iota of difference).

 

My bad.  fix'd my post.

On ‎8‎/‎29‎/‎2019 at 4:29 PM, Larry Starr said:

From Book of Mormon, there is a song that covers this: "You're making things up again, Arnold, you're taking the holy book and adding fiction!".

Larry.

You really had me confused for a short while.  In all my comparative religions class I don't recall reading that line in the Book of Mormon and the language was too modern.  I had to Google it.  It is from the play not the actual book.  Never seen the play so that explains why I didn't recognize it.   Now my mind is  a little less twisted.  

I know Larry's a stage buff, his allusion might not transcend to everyone 

Showing my ignorance here: does the actual Book of Mormon have *any* songs?

39 minutes ago, Mike Preston said:

Showing my ignorance here: does the actual Book of Mormon have *any* songs?

It quotes the Book of Psalms from the Old Testament.  Almost all of them were ancient Hebrew songs.  

On 8/30/2019 at 5:06 PM, Mike Preston said:

Showing my ignorance here: does the actual Book of Mormon have *any* songs?

It is from the play Book of Mormon

https://bookofmormonbroadway.com/tickets

I'm not big fan of people who make fun of religion or religious beliefs, but that play was HILARIOUS!

As was alluded to, I am a big broadway fan. Actually, I am an investor in a number of shows.  In the last two years, two of my shows have won Tony's for Best Musical Revival (Once On This Island, 2 years ago) and this year, best musical (Hadestown).  And we've got FIVE new ones in "pre-production", including the one I am most excited about (maybe we'll make money on this one!) which is we have the rights to Neil Diamond.  I'm hoping it will be our Jersey Boys.

Now, the LDS (the Mormon Church is the Church of Latter Day Saints), was very smart. Back when Book of Mormon was early in its run, the LDS took out full page ad in the Playbill:  "Now that you've seen the show, read the book".  Very smart of them I think.

For those who don't know, the show is NOT really a knock of Mormonism, it's a knock on ALL religions, but what else would you expect from the guys who do South Park and Avenue Q (another clever musical).  Here's a useful line from the Wikipedia entry for the musical:

The Book of Mormon is a musical comedy. First staged in 2011, the play is a satirical examination of Mormon beliefs and practices that ultimately endorses the positive power of love and service.^[1] The script, lyrics, and music were written by Trey Parker, Robert Lopez, and Matt Stone. Parker and Stone were best known for creating the animated comedy South Park; Lopez had co-written the music for the musical Avenue Q.

26 minutes ago, Larry Starr said:

Now, the LDS (the Mormon Church is the Church of Latter Day Saints)

Simply as a point of clarification, the name of the church is The Church of Jesus Christ of Latter-Day Saints.