RMDs from employer 403 (b) TSA plan

Submitted by Frank Miyamura on Wed, 2017-11-22 02:42

Is taking identical periodic monthly distribution payments for a 20 year period from an employer 403 (b) TSA plan, beginning April 1 after the year he turns 70 ½, satisfy IRS RMD rules?

For TIRAs, if one waits until April 1 of the year after turning 70 ½ to take his RMDs, he must take two RMDs in the first year. He takes one on or before April 1st and one by Dec 31st that year. Are TSA RMD rules for this example exempt it from this rule? Any help would be greatly appreciated. Frank



Submitted by Alan - IRA critic on Wed, 2017-11-22 22:07

Yes, as long as the first interval distribution (monthly) is made no later than 4/1 of the year following the year in which participant reaches 70.5, the RMD rules are satisfied. The usual interval can be followed even though in this case a total of only 8 monthly payments will be made by the end of the year containing the RBD. The 20 year period certain is also permitted as it does not exceed the permitted time limit of the period certain.

Submitted by Frank Miyamura on Thu, 2017-11-23 17:20

Your thorough and concise response is much appreciated. It confirms what I was able to understand over several long calls with the insurance company’s customer service representative (outsourced to the Philipines). Sellers of annuities don’t do a good job providing owners of their annuities the information they need when they begin taking distributions. With so many kinds of annuities with so many different distribution options, every annuity is somewhat unique. Thank you so much. This is why you are so highly valued as a resource to so many of us. 

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