Life and Death Planning for Retirement Benefits

Chapter 1: The Minimum Distribution Rules

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 The participant’s date of birth and date of death. You can skip the “birth date” part for a Roth IRA, or if you know the participant was younger than age 70½ at death.  The identity of the participant’s beneficiary(ies). For an individual beneficiary, you need to know the beneficiary’s date of birth and whether the beneficiary is the surviving spouse of the participant. If the beneficiary is a trust, you need to know whether the trust qualifies as a see-through trust (see ¶ 6.2.03 ). See ¶ 1.7.02 for how to determine who is the participant’s “beneficiary.”  The type of plan you are dealing with: traditional IRA, Roth IRA, QRP, or 403(b) plan (see ¶ 8.3). Step 2: Gather specialized information you may need to compute the RMD in some cases:  If the participant died on or after April 1 of the year after the year in which he reached age 70½, and the plan is a QRP or 403(b) plan, you need to know whether the participant had retired prior to his death and whether (in the case of a QRP) he was a “5-percent owner” with respect to that plan. See ¶ 1.4.03 – ¶ 1.4.06 .  If the plan is a 403(b) plan, is there a “pre-1987” account balance in the plan? If so, see ¶ 1.4.05 ; this Road Map will not work for the pre-1987 balance.  If the plan is a QRP, did the participant have a TEFRA 242(b) election in effect since 1983? If so, see ¶ 1.4.08 ; this Road Map will not work for these benefits. Step 3: Determine whether the participant died before, on, or after the RBD. See ¶ 1.4. If the decedent died BEFORE his RBD, use ¶ 1.5.03 to determine post-death RMDs. If the decedent died AFTER his RBD, use ¶ 1.5.04 . Death on the RBD is treated as death after the RBD. Reg. § 1.401(a)(9)-2 , A-6(a).  If the plan is a Roth IRA , the death is always before the RBD, because Roth IRAs have no RBD. ¶ 5.2.02 (A).  If the participant died before April 1 of the year following the year in which he reached (or would have reached) age 70½ then he died BEFORE his RBD for all plans. See ¶ 1.4.07 (C).  If he died on or after that date, see ¶ 1.4 for how to determine the RBD for each of the decedent’s plans; the RBD is not always easy to determine in this case, because different types of plans have different RBDs. The participant may have died before his RBD under some of his retirement plans but after the RBD for other plans. For the most confusing situations, see: ¶ 1.4.04 , qualified plan’s RBD is earlier than statutory RBD; and ¶ 1.2.06 (C), new IRA created via rollover or transfer.  Finally, even though a participant who turned age 70½ (or retired, whichever was applicable) in 2009 did not have to take an RMD for 2009, April 1, 2010, will still