(b)lines Ask the Experts – Aggregating Accounts for RMDs

November 30, 2010 (PLANSPONSOR (b)lines) – If an individual is a participant in more than one 403(b) plan or the individual is invested in multiple 403(b) contracts, can the plans and/or contracts be aggregated for purposes of making required minimum distributions? 
By PS

David Levine, Groom Law Group, answers:    

An individual who participates in multiple plans and/or contracts must have a required minimum distribution separately calculated for each contract.  However, unlike a 401(k) plan (but similar to having multiple IRAs), once an individual’s required minimum distributions are calculated, he or she may elect to receive his or her required minimum distribution from any one or more of his or her 403(b) contracts in order to satisfy the aggregate amount of required minimum distributions for a year.    

This aggregation rule is applied separately to contracts owned as a “participant” or “member” from contracts owned as beneficiary of a specific person (e.g., a spouse), and contracts owned as a beneficiary of different deceased persons have to be separately aggregated.  Lastly, a 403(b) plan participant may not elect to receive a required minimum distribution from an IRA or a 401(a), 401(k) or 457(b) plan in order to satisfy his or her 403(b) required minimum distribution obligations.    

 

NOTE: This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice. 

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