Life and Death Planning for Retirement Benefits

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Chapter 1: The Minimum Distribution Rules 43
This section explains the rules for participants who are taking lifetime RMDs from more
than one retirement plan. For rules applicable to beneficiaries taking distributions from inherited
plans, see instead.
If the participant has benefits in more than one qualified retirement plan (QRP), the RMD
must be calculated separately for each such plan, and each such plan must distribute the RMD
calculated for that plan. Reg. A-1. Thus if he participates in two pension plans and
a 401(k) plan, he will receive three separate RMDs (even if all the plans are provided by the same
employer).
A different rule applies for IRAs. The RMD must be calculated separately for each IRA,
but (with exceptions noted below) the participant is not required to take each IRA’s calculated
amount from that IRA. He can total up the RMDs required from all of his IRAs and then take the
total amount from one of the IRAs or from any combination of them. Reg. A-9. For
purposes of this rule, all traditional IRAs—whether contributory, rollover, SIMPLE, or SEP—are
treated the same; they may all be aggregated with each other. However, Roth IRAs may not be
aggregated with any type of traditional IRA for this purpose; see C).
This optional aggregation rule applies also to 403(b) accounts. The RMD must be
calculated separately for each 403(b) account, but (with exceptions noted below) the participant is
not required to take each 403(b) account’s calculated amount from that 403(b) account. He can
total up the RMDs required from all of his 403(b) arrangements, and then take the total amount all
from one of them or from any combination of them. Reg
Note that IRAs may be aggregated only with other IRAs, and 403(b)s may be aggregated
only with other 403(b)s.
Now for the exceptions: An individual’s IRAs held as owner may not be aggregated with
IRAs he holds as beneficiary; an individual’s 403(b) plans held as employee may not be aggregated
with such individual’s 403(b) plans held as beneficiary; and an individual’s IRAs (or 403(b) plans)
held as beneficiary of one decedent may not be aggregated with IRAs (or 403(b) plans) held as
beneficiary of another decedent. Regs. A-9; Also, if any part of an
IRA or 403(b) account has been “annuitized” (converted to an immediate annuity), the annuitized
portion becomes subject to the defined benefit plan RMD rules and cannot be aggregated with
amounts governed by the DC plan rules; see
1.3.05 Separate accounts within a single plan
A QRP may maintain multiple accounts for a particular employee on the plan books, for
example a rollover account, an employer contribution account, and an employee contribution
account. These multiple accounts within a single QRP are treated as one account for RMD
purposes during the employee’s life. Reg. A-2(a). This rule is favorable to the
employee, because he can withdraw his RMDs from his employee contribution account (which
may contain after-tax dollars) first; see D).
Though a single IRA payable to multiple beneficiaries can be divided into “separate
accounts” (each payable to a different beneficiary) for RMD purposes after the owner’s death
, separate accounts treatment is not available for RMD purposes during the participant’s
life. Thus, it is not possible to use the much-younger-spouse method to calculate the RMD for the