fb-rmd-0030
{
"person": "Employee, age 75, born in 1951, still working full-time for the employer that maintains her 401(k) plan",
"facts": "She owns no interest in the employer (she is not a 5-percent owner), and the plan uses the regulatory required-beginning-date rule rather than a uniform required beginning date. She has taken no distributions from the 401(k). An audit tool flags two years of missed required minimum distributions from the plan.",
"question_context": "Whether any required minimum distribution from this employer plan is yet due."
}Is a required minimum distribution currently due from this employee's 401(k) plan? Answer with exactly one option id.
no-not-yet-retired— No — her required beginning date is April 1 after the later of the applicable-age year or the year she retires, and she has not retiredyes-age-controls— Yes — she passed the applicable age, so plan RMDs are due regardless of employmentyes-two-years-missed— Yes — and two years of missed RMDs must be made up
no-not-yet-retired
Under 1.401(a)(9)-2(b)(1), the required beginning date for a non-5-percent owner is April 1 of the calendar year following the LATER of the applicable-age year and the year of retirement from the employer maintaining the plan. She is still employed by that employer, so the retirement prong has not occurred and her required beginning date has not arrived; no plan RMD is yet due. The audit tool applied the age prong alone.
Selects no-not-yet-retired, applying the later-of rule.
“the employee's required beginning date (within the meaning of section 401(a)(9)(C)) is April 1 of the calendar year following the later of”
“The calendar year in which the employee retires from employment with the employer maintaining the plan.”
Each quoted passage is exact-matched, after typographic normalization, against the corpus text fetched from the issuing authority (hashes in the corpus manifest). An item whose quote stops matching fails the build.
“Except as otherwise provided in this paragraph (b), the employee's required beginning date (within the meaning of section 401(a)(9)(C)) is April 1 of the calendar year following the later of— (i) The calendar year in which the employee attains the applicable age; and (ii) The calendar year in which the employee retires from employment with the employer maintaining the plan.” — cfr-1-401a9-2
The employee is not a 5-percent owner, and the plan does not use the permitted uniform required beginning date. Therefore the general later-of rule applies. Although a person born in 1951 has applicable age 73, she remains employed by the employer maintaining the plan, so the retirement year has not occurred. Her required beginning date has therefore not arrived, and the audit tool's age-only conclusion is erroneous.
“Except as otherwise provided in this paragraph (b), the employee's required beginning date (within the meaning of section 401(a)(9)(C)) is April 1 of the calendar year following the later of—” — cfr-1-401a9-2
The stipulated facts establish a non-5-percent owner who remains employed by the employer maintaining the plan, and the plan uses the general (non-uniform) RBD rule. Under (b)(1), RBD is therefore April 1 of the year after the later of the applicable-age year and the year of retirement from that employer. Because the retirement year has not occurred, RBD has not arrived and no plan RMD is due. Paragraph (b)(3) (age-only RBD) applies only to 5-percent owners; (b)(4) (uniform RBD) is stipulated not to apply. The key value and derivation match the regulation as applied to the scenario.
v1; no errata. Demonstrate a key error and the correction is published here, credited — challenge policy.