Compliance May 7, 2002

IRS Okays 2001 Distributions under 1987 Regs

July 17, 2001 (PLANSPONSOR.com) - A new rule put out by the Internal Revenue Service rubber stamps the actions of plan sponsors who made required 2001 minimum distributions to a participant under 1987 regulations.
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Many plan sponsors who had already made 2001 distributions under 1987 rules, expressed concerns about plan compliance. They can put these concerns to rest following adoption of the model amendment in Announcement 2001-82.

In Detail

The model amendment provides that if the distributions made to a participant before the date that the plan began operating under the 2001 proposed regulations are equal to or greater than the minimum distributions required under the 2001 proposed regulations, no additional distributions are required for the 2001 plan year.

Otherwise, the total required minimum distributions for the 2001 plan year will be determined under the 2001 proposed regulations.

Among other things, with the 2001 proposed regulations, the IRS aims to:

  • simplify the minimum distribution rules for qualified plans
  • provide a uniform table to determine lifetime required minimum distributions, 
  • permit a beneficiary to be determined up to the end of the year after a participant’s death, and
  • allow life expectancy at the time of death to be taken into account in the calculation of post-death minimum distributions.

Announcement 2001-82 will appear in IRS Bulletin 2001-32 on August 6 this year.

– Camilla Klein                      editors@plansponsor.com

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