Are company pension plans subject to RMD?

Forum|Forum|6 years ago
June 4, 2019
3 replies
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Irene2805

Yes. The Required Minimum Distribution (RMD) rules apply to:

All employer-sponsored retirement plans, including profit-sharing plans, 401(k) plans, 403(b) plans, and 457(b) plans.
Traditional IRAs and IRA-based plans such as SEPs, SARSEPs, and SIMPLE IRAs.
Roth 401(k) accounts.

However, the RMD rules do not apply to Roth IRAs while the owner is alive.

For more information, see the IRS FAQ: Retirement Plan and IRA Required Minimum Distributions FAQs

jhalman

What about a defined benefit plan (a traditional pension)? Is all of the payment the RMD or is part of the payment RMD? How can I tell?

jimmarywebster

Pensions are treated like IRAs when reporting them. My pension 1099 has a box reporting the total distribution and a box for the taxable amount. Which of these amounts do I use?

JohnB5677

In the case of a defined benefit plan, the monthly distributions could be considered the RMD.

In reality the defined benefit plan does not have an RMD because there is no pool of money that you as an individual have to deplete. Depending on how you structured your plan before you retired. The benefits end when you pass. You may have put your spouse on it, but then you got a reduced benefit and the benefits end when you both pass. There will be nothing else for the IRS to tax.

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DominicT

If the Defined Benefit plan (company pension) does not have a total year end value why must i enter the part of my annual pension that is RMD when I fill in the Turbo Tax information. There is no way to calculate it. Checking the box saying the entire amount is not 100% RMD is not true but the only way to get past that screen.

macuser_22

Employee

@DominicT wrote:

If the Defined Benefit plan (company pension) does not have a total year end value why must i enter the part of my annual pension that is RMD when I fill in the Turbo Tax information. There is no way to calculate it. Checking the box saying the entire amount is not 100% RMD is not true but the only way to get past that screen.

By law, the amount of the years pension must be the RMD amount, no less and no more.

The rules that the plan administrator must use to calculate the RMD as required by §401(a)(9) are defined in § 1.401(a)(9)-6) of the Internal Revenue Code (IRC).

The question is only to be sure that you did not try to make a prohibited rollover.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

Tricuspid48

My Dad has been receiving retirement pension wages monthly from Bridgestone for 20 years. He is now 92. How do I know if I need to figure out if he has a RMD and if so how much it is? I don't know how much he has left in his plan. Its not a IRA

I'm using turbotax and it says I need to show what his RMD is I just don't know how to figure it out. Does the RMD apply to him and if so how do I figure it out. My Mom is also in a similar situation with her pension plan.

HELP!!

DoninGA

Employee

@Tricuspid48 wrote:

My Dad has been receiving retirement pension wages monthly from Bridgestone for 20 years. He is now 92. How do I know if I need to figure out if he has a RMD and if so how much it is? I don't know how much he has left in his plan. Its not a IRA

I'm using turbotax and it says I need to show what his RMD is I just don't know how to figure it out. Does the RMD apply to him and if so how do I figure it out. My Mom is also in a similar situation with her pension plan.

HELP!!

All Pension payments to someone who is age 70 1/2 or older are an RMD.