Non-Spouse Beneficiaries
The decedent died in 11/07 after her required beginning date with an IRA and an annuity. What options are now available after PPA 2006 to the non-spouse beneficiaries? How will the RMD have to be calculated in the future for the non-spouse beneficiaries if a direct rollover is properly completed?
Permalink Submitted by Alan Spross on Fri, 2008-01-04 20:58
The IRA was not affected by the PPA, and the non spouse beneficiary can use their own life expectancy starting in the year following death.
With respect to the annuity, I assume you mean a 403b since a NQ annuity is also not affected by the PPA. A 403b can optionally provide a direct transfer to an inherited IRA for the beneficiary, and the beneficiary’s life expectancy can be used to determine RMDs. If the plan will not provide the transfer, then it must provide for direct RMDs based on the beneficiary’s life expectancy starting in the year following death, and this also applies if the transfer is completed in time.
If the beneficiary is older than the owner. the owner’s remaining non recalculated life expectancy applies.