First of all, the participant should confirm that the employer actually considers 12/31 as the date of retirement, and not a day later as that would change the required beginning date. Usually, the last day worked is the date of retirement or separation and such things as vacation or accrued sick leave payments do not change that. Nonetheless, the 12/31 date on employer’s records should be confirmed.

That would make the RBD 4/1/2013, but it will also make 2012 an RMD distribution year (RMD due by 4/1/2013) with the 2013 RMD due by 12/31/2013. The 2012 RMD will be based on the 12/31/2011 account value, and the 2013 RMD will be based on the 12/31/2012 account value, not adjusted for the 2012 RMD not yet taken by 12/31/2012.

Also, note that the 12/31/1986 accrual amount in the plan is NOT subject to RMDs until age 75, as long as the plan has tracked that amount. If applicable the participant would subtract the 12/31/1986 value from the total plan values to calculate the RMDs.

If the plan is rolled over to an IRA, the current year RMDs must be distributed and not rolled over, and the pre 87 balance disappears. Participant can not request that only the post 86 amount is rolled over and leave behind the 12/86 value because the 12/86 values are deemed to be distributed first whenever an amount in excess of the RMD is distributed.

NOTE: If participant moves the retirement date to January it postpones all the above mentioned dates by 12 months (except the 1986 date).

• Flag as spam
• Log in to Reply