Confirming RMDs Are Processed

The Treasury regulations indicate a participant with multiple 403(b) accounts can aggregate them to determine the required minimum distribution (RMD) amount and then take the RMD from a single account (similar to IRAs). A person has worked for two different (unrelated) non-profit organizations and participated in a 403(b) plan at each organization (let’s just say 403(b) plan X and 403(b) plan Y). This person wants to take the combined balance for Plan X and Plan Y to calculate the RMD and then distribute the total RMD from Plan X (nothing would be distributed from Plan Y).

Q. If you can aggregate across plans, what is the plan sponsor’s responsibility for confirming RMDs are processed?

A. The plan sponsor or in most cases the provider will calculate the RMD for that specific plan. If the participant is actually taking the minimum from another plan, the participant would indicate that and the name of the other 403(b) plan. Beginning with the restatement of the 403(b) plans, the RMD language will be in the provider’s annuity contract or custodial agreement, so it is the provider’s form that will probably contain the ‘checkbox’ that the RMD is being taken from the “XXXX 403(b) Plan.”