Employers: RMD Q&A for '09 Rule Changes
SungardRelius has posted "
Q&A: 2009 Required Minimum Distribution Rule (RMD) Changes" on its website. This technical update explains RMD rules passed as part of the Worker, Retiree, and Employer Recovery Act of 2008 (WRERA) and discusses "issues employers will face in administering plans that are making RMDs."
The Q&A addresses the following questions:
- What is the new law change affecting RMDs for 2009?
- To what types of plans does the WRERA 2009 RMD waiver apply?
- What is the purpose of the new law?
- How do RMDs affect eligible rollover distributions (ERDs) in general?
- If a plan makes a 2009-ERD, must the plan apply the rules that apply to an ERD?
- If an individual receives a 2009 distribution from a plan that has been distributing RMDs to the individual, may the individual roll over the distribution?
- If an individual receives a 2009-ERD, and decides to roll over the distribution, how long does the individual have to complete the rollover?
- If a plan suspends a participant's RMD for 2009, does the suspension affect the way the plan calculates the participant's 2010 RMD?
- Must a plan that is making RMDs to an individual notify the individual, in advance of the distribution, of the 2009 waiver provision, and give the individual an opportunity to elect not to take a 2009 distribution that, but for WRERA, would be an RMD?
- How should a plan, during 2009, treat distributions that are affected by the RMD waiver?
- Must a financial institution that is an IRA trustee send to IRA owners subject to the RMD requirements the annual notice due by January 31 regarding RMDs?
- Does the 2009 waiver apply to a death beneficiary who is receiving distributions from the account of a deceased participant?
- If an individual (whether an IRA owner or a participant who has separated from employment with the employer maintaining the plan) attained age 70-1/2 in 2008, and did not take his/her first RMD in 2008, does the RMD waiver permit the individual not to take the first RMD in 2009?
- With respect to an individual who attains age 70-1/2 during 2009, and has his or her initial RMD obligation for that year, must the individual still take his or her first RMD by April 1, 2010, since that date is after 2009, the year of the waiver?
- When must an employer amend its plan to add language reflecting the 2009 RMD waiver?