What was the father’s age at his death with respect to his required beginning date for the plan. This would depend on whether he was still working for the company and the plan provisions.

Despite the PPA, a plan still has the option to NOT offer the transfer to a non spouse inherited IRA, although sometimes this can be waited out as more plans decide to adopt this option.

But if father just passed, you are asking what his options will be 5 years from now. Under current law, if the plan does not offer the transfer OR if the transfer is NOT made for any reason by the end of the year following the year of employee’s death, any resulting IRA transfer must follow the PLAN rules for RMDs, not IRA rules.

So – more info is needed.

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Bruce,
In this case, the statutory RBD is actually the year following retirement, and not the year following age 70.5, so generally there is no IRS reason for the 5 year rule to be forfeited. While a different case than the one you posted, the following copied from Natalie Choate’s site does provide some interesting guidance regarding the actual statutory RBD and a surprising conclusion regarding the rollover:
>>>>>> >>>>>>>>

When is an MRD not an MRD? Answer: When a qualified plan (QRP) requires all
employees to start distributions by April 1 of the year following the year they reach 70½, even if still
working and not a 5% owner. When a non-5% owner who is still working after the plan’s RBD, but
who has not reached the statutory RBD, receives an MRD from the plan, the money IS an MRD
when it leaves the plan, but he can roll it over because it’s NOT an MRD when the check arrives in
his mailbox! See ¶ 1.4.05.
>>>>>> >>>>>>>>>

Getting back to your inquiry where the statutory RBD and the plan RBD are the same, the actual outcome depends on the plan provisions regarding both options and election deadlines when the employee passes prior to that RBD. This is copied from the IRS Regs 1.401(a)(9)(3) Q&A 4:

>>>>>>>>>>>>>>>
Q–4. How is it determined whether the 5-year rule in section 401(a)(9)(B)(ii) or the life expectancy rule in section 401(a)(9)(B)(iii) and (iv) applies to a distribution?

A–4. (a) No plan provision. If a plan does not adopt an optional provision described in paragraph (b) or (c) of this A–4 specifying the method of distribution after the death of an employee, distribution must be made as follows:

(1) If the employee has a designated beneficiary, as determined under §1.401(a)(9)–4, distributions are to be made in accordance with the life expectancy rule in section 401(a)(9)(B)(iii) and (iv).

(2) If the employee has no designated beneficiary, distributions are to be made in accordance with the 5-year rule in section 401(a)(9)(B)(ii).

(b) Optional plan provisions. A plan may adopt a provision specifying either that the 5-year rule in section 401(a)(9)(B)(ii) will apply to certain distributions after the death of an employee even if the employee has a designated beneficiary or that distribution in every case will be made in accordance with the 5-year rule in section 401(a)(9)(B)(ii). Further, a plan need not have the same method of distribution for the benefits of all employees in order to satisfy section 401(a)(9).

(c) Elections. A plan may adopt a provision that permits employees (or beneficiaries) to elect on an individual basis whether the 5-year rule in section 401(a)(9)(B)(ii) or the life expectancy rule in section 401(a)(9)(B)(iii) and (iv) applies to distributions after the death of an employee who has a designated beneficiary. Such an election must be made no later than the earlier of the end of the calendar year in which distribution would be required to commence in order to satisfy the requirements for the life expectancy rule in section 401(a)(9)(B)(iii) and (iv) (see A–3 of this section for the determination of such calendar year) or the end of the calendar year which contains the fifth anniversary of the date of death of the employee. As of the last date the election may be made, the election must be irrevocable with respect to the beneficiary (and all subsequent beneficiaries) and must apply to all subsequent calendar years. If a plan provides for the election, the plan may also specify the method of distribution that applies if neither the employee nor the beneficiary makes the election. If neither the employee nor the beneficiary elects a method and the plan does not specify which method applies, distribution must be made in accordance with paragraph (a) of this A–4.
>>>>>>> >>>>>>>

The above is material when the plan would NOT allow the transfer to a beneficiary IRA. If the plan will offer the transfer, then the above becomes immaterial if the transfer is done on time, but would come back into play if the transfer was NOT done by the deadline, because the plan provision would then be superimposed on the beneficiary IRA as per Notice 2007-7.

This is rather convoluted, does it make sense?

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