QDRO

Submitted by ShipsnGiggles on Wed, 2015-12-16 19:52

401(k) participant got a divorce.
former spouse received 50% of his account via a QDRO
Participant has since retired – rolled his account to an IRA –
Participant is now > 70.5 subject IRA RMDs

His x-spouse 67, left her account in the 401(k).
My understanding is she is not subject to RMDs until she is 70.5. Is my assumption correct?

Thank you



Submitted by Alan - IRA critic on Thu, 2015-12-17 02:47

  • There is nothing in the Regs regarding the timing of the participant’s account distribution, so it appears the required beginning date will continue to be based on the participant’s age since the alternate payee account was created as a spin off of the participant’s account. The ex spouse will therefore have an RBD of 4/1 of the year following the year the participant reached 70.5 whenever that was. The plan should have been distributing RMDs no later than this RBD. While her RMDs should have begun depending on when participant reached 70.5 or retired, the calculation would still be based on HER age. Since the Uniform Table starts at 70.5, the divisor would have to be secured from Table II (joint and survivor) using both her age and assumed beneficiary 10 years younger. This will be necessary until she reaches 70.5 when she can revert to the Uniform Table.
  • Perhaps she should do an IRA rollover now and eliminate these RMDs until 70.5. She is over 59.5 so she no longer needs the QDRO penalty exception.

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