Retirement Plan Aggregation Rules

Submitted by Sidney Poretsky on Tue, 2017-08-08 21:55

Individual is retiring January 2018. She will turn age 70 in February, and will begin taking RMD’s from her retirement plans accounts, which now consist of: (2) IRA’s; (1) 457 Plan; (2) 403b plans; and (3) 401a plans. It’s been recommended that she roll over all the plans to IRA’s so that they can be aggregated for purposes of calculating the RMD’s. However, she wants to keep two of the 401a plans, which are in fixed annuities.

The questions is, if she does not roll over the 401a plans to IRA’s, can the 401a plans still be aggregated with the other IRA’s, or must they be treated separately? (I did check with the November 2016 IRA Advisor but there’s no mention of 401a plans specifically. My guess is they are similar to 403b plans, but I want to be sure, so would appreciate your thoughts on this.) . Thank you.



Submitted by Alan - IRA critic on Tue, 2017-08-08 23:10

IRAs can be aggregated with other IRAs only, and 403b plans can be aggregated with other 403b plans only. All other types of retirement accounts cannot be aggregated and each such plan must satisfy it’s own RMD. Note that any accounts to be rolled over to IRAs must distribute the RMD for 2018 before the rollover is done.

Submitted by Marvin Rauchbach on Mon, 2022-06-27 17:51

if a client has two 401 (a) accounts, can she aggregate for RMD purposes as one can do for IRAs or TSas .  Or in  401(a) plans is aggregation not allowed and a seperate RMD must come from each of the two 401(a) accounts. thank you

Submitted by Alan - IRA critic on Mon, 2022-06-27 18:49

For qualified plans such as 401a or 401k, the RMD must be distributed from each account. Aggregation is not allowed.

Submitted by Marvin Rauchbach on Tue, 2022-06-28 13:16

Client has an employer 401a and a employee 401a account from same employer.  she has to take rmds from each account and can not take the rmd from the employee account to satisfy both the employee and employer accounts.thank you 

Submitted by Alan - IRA critic on Tue, 2022-06-28 14:15

This is probably a money purchase pension plan. Either they are set up as separate plans in which case the RMD would have to be separately distributed, or there is one plan with separate sub accounts, in which case the RMD could be aggregated. Since the plans structure are best understood by the employer and the employer is required to meet the RMD regulations, the client should ask this question of the plan administrators. 

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