Pension rollover and RMD
Owner of an IRA also has a pension from which she is receiving monthly payments of $754.16, which was inherited from her husband. She is offered the opportunity for a lump sum rollover and does so receiving her rollover check in September totaling $57,549.63. This was deposited into your own IRA. Prior to the rollover check, the total amount withdrawn from the pension this year was $6,033.28, so will she also be required to take an RMD by the end of this year on that pension rollover since it is now in an IRA? She has already satisfied her RMD on the IRA balance prior to the pension deposit. It would seem the $6,033.28 taken from the pension in January through August would satisfy any requirement against the pension amount, but just wanted to be sure there’s not some IRS requirement when rolling a pension into an IRA at an RMD age when money has already been removed. Thanks.
Permalink Submitted by Alan - IRA critic on Fri, 2021-12-24 18:23
There are two options for the plan to choose from for determining if the amount already distributed meets the RMD for the single sum distribution year. If there was a remaining RMD, the plan should have distributed it and not included it in the rollover. The spousal beneficiary has no way of knowing whether the plan calculated this correctly or not, but if it later turns out that the plan made an error and she receives notification, any remaining RMD will have to be treated as an excess contribution to her IRA and corrected . The rollover will not affect the 2021 IRA RMD, but the added IRA balance will increase the 2022 IRA RMD.