MRD’S and Strech Provisions Fom a TIAA- CREFF 403-B
Hello:
I just read that there may an exeption to the MRD rule; ” If you particpated in a 403b plan prior to 12/31/1986 your plan may allow you to defer taking a minimum distribution until age 75″
I am working with a client who has a 403-b with TIAA-CREF, has been retired about 10 years and is turning 70 in December.
I believe she was a particpipant before 12/31/1986
Does any one know if this exception would apply?
Also, her daughter is the beneficiary. CREFF has told her that the beneficiary can stretch distributions. My understanding is that the plan does ” Permit” it now but can ” revoke” that permission.
Does any one have any information and/or refernce material on these two matters?
Thank you
Evan
Permalink Submitted by Alan Spross on Wed, 2012-08-29 17:46
The 12/31/1986 403b account balance is not subject to the 2002 RMD Regs and distribution of that balance can be delayed to age 75. Of course, the plan must separately account for that balance. In addition, if the plan owner has taken any prior distributions, they are deemed to have come from the “old money” balance. Under this same rule, it is not possible to roll the rest of the balance to an IRA and leave the 12/31/1986 balance in the plan until age 75, since the IRA rollover would be pulled from the “old money” balance first.
If the plan were to require a more restrictive beneficiary RMD than life expectancy, the beneficiary can transfer the funds to an inherited IRA and use life expectancy from the IRA. However, this transfer must take place no later than 12/31 of the year following the year of death. The plan MUST allow this transfer to take place.