Q-1. If an amount is distributed by one plan (distributing plan) and is
rolled over to another plan, is the required minimum distribution under
the distributing plan affected by the rollover?
A-1. No, if an amount is distributed by one plan and is rolled over to
another plan, the amount distributed is still treated as a distribution by
the distributing plan for purposes of section 401(a)(9), notwithstanding
the rollover. See A-1 of section 1.402(c)-2 for the definition of a
rollover and A-7 of section 1.402(c)-2 for rules for determining the
portion of any distribution that is not eligible for rollover because it
is a required minimum distribution.
Q-2. If an amount is distributed by one plan (distributing plan) and is
rolled over to another plan (receiving plan), how are the benefit and the
required minimum distribution under the receiving plan affected?
A-2. If an amount is distributed by one plan (distributing plan) and is
rolled over to another plan (receiving plan), the benefit of the employee
under the receiving plan is increased by the amount rolled over for
purposes of determining the required minimum distribution for the calendar
year immediately following the calendar year in which the amount rolled
over is distributed. If the amount rolled over is received after the last
valuation date in the calendar year under the receiving plan, the benefit
of the employee as of such valuation date, adjusted in accordance with A-3
of section 1.401(a)(9)-5, will be increased by the rollover amount valued
as of the date of receipt. In addition, if the amount rolled over is
received in a different calendar year from the calendar year in which it
is distributed, the amount rolled over is deemed to have been received by
the receiving plan in the calendar year in which it was distributed.
Q-3. In the case of a transfer of an amount of an employee's benefit
from one plan (transferor plan) to another plan (transferee plan), are
there any special rules for satisfying section 401(a)(9) or determining
the employee's benefit under the transferor plan?
A-3.
(a) In the case of a transfer of an amount of an employee's benefit from
one plan (transferor plan) to another (transferee plan), the transfer is
not treated as a distribution by the transferor plan for purposes of
section 401(a)(9). Instead, the benefit of the employee under the
transferor plan is decreased by the amount transferred. However, if any
portion of an employee's benefit is transferred in a distribution calendar
year with respect to that employee, in order to satisfy section 401(a)(9),
the transferor plan must determine the amount of the required minimum
distribution with respect to that employee for the calendar year of the
transfer using the employee's benefit under the transferor plan before the
transfer. Additionally, if any portion of an employee's benefit is
transferred in the employee's second distribution calendar year but on or
before the employee's required beginning date, in order to satisfy section
401(a)(9), the transferor plan must determine the amount of the minimum
distribution requirement for the employee's first distribution calendar
year based on the employee's benefit under the transferor plan before the
transfer. The transferor plan may satisfy the minimum distribution
requirement for the calendar year of the transfer (and the prior year if
applicable) by segregating the amount which must be distributed from the
employee's benefit and not transferring that amount. Such amount may be
retained by the transferor plan and must be distributed on or before the
date required under section 401(a)(9).
(b) For purposes of determining any required minimum distribution for the
calendar year immediately following the calendar year in which the
transfer occurs, in the case of a transfer after the last valuation date
for the calendar year of the transfer under the transferor plan, the
benefit of the employee as of such valuation date, adjusted in accordance
with A-3 of section 1.401(a)(9)-5, will be decreased by the amount
transferred, valued as of the date of the transfer.
Q-4. If an amount of an employee's benefit is transferred from one plan
(transferor plan) to another plan (transferee plan), how are the benefit
and the required minimum distribution under the transferee plan affected?
A-4. In the case of a transfer from one plan (transferor plan) to
another (transferee plan), the benefit of the employee under the
transferee plan is increased by the amount transferred in the same manner
as if it were a plan receiving a rollover contribution under A-2 of this
section.
Q-5. How is a spinoff, merger or consolidation (as defined in section
1.414(l)-1) treated for purposes of determining an employee's benefit and
required minimum distribution under section 401(a)(9)?
A-5. For purposes of determining an employee's benefit and required
minimum distribution under section 401(a)(9), a spinoff, a merger, or a
consolidation (as defined in section 1.414(l)-1) will be treated as a
transfer of the benefits of the employees involved. Consequently, the
benefit and required minimum distribution of each employee involved under
the transferor and transferee plans will be determined in accordance with
A-3 and A-4 of this section.
[Added by TD 8987, 67 FR 18987, April 17, 2002]
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