In service rollover and RMD
Our client is 74 and still working. He was forced to rollover his pension plan this year (2015) and now has the funds in an IRA. Is he required to take a 2015 RMD as a result of this event? I am thinking his first RMD would not be until 2016. The assets were held in a pension plan on 12/31/2014.
Thank you
Permalink Submitted by Alan - IRA critic on Wed, 2015-12-09 00:51
Why was he forced to roll over the pension plan? Was the plan terminated? Was this a cash balance plan? Assuming he is not a 5% owner, there would generally not be an RMD required for 2015 as long as he works beyond year end.
Permalink Submitted by Scott Wolters on Wed, 2015-12-09 01:20
We are not entirely clear why he was forced to roll, he did not provide that information to us. It may have been a cash balance plan. Are there particular rules for those plans?
Permalink Submitted by Alan - IRA critic on Wed, 2015-12-09 01:26
No particular rules, but a forced rollover is rare for a 401k plan unless there is a merger or acquisition. There are different possible reasons, but the plan should clarify and distribute the RMD separately if it is required. The only situation where they would not address any RMD would be if the client rolled over the balance voluntarily while still working, and then retired before year end. That would make 2015 an RMD distribution year. My guess here is that that there is no RMD this year as long as he works beyond year end, since the plan did not indicate that an RMD applied at the time of the forced rollover.