I have a client whose spouse passed away this year. The spouse was >72 but still working and part of his employer EIRSA DB pension plan (not receiving payments). We have elected to roll the lump sum value of his pension to her IRA. The client turns 70 1/2 in late 2019.
The pension custodian has indicated that the plan provisions indicate a RMD is not required because the beneficiary spouse is not yet 70 1/2 and so they have issued a check for the full commuted value to roll into the IRA.
Is the pension plan required to calculate and issue the RMD before rollover or does the beneficiary take her first RMD in 2020 based on the 12/31/19 IRA value?
Since the spouse passed prior to the RBD, 2019 is not an RMD distribution year. The entire balance can be rolled over to client’s IRA. With respect to the IRA rollover client’s first RMD is due by 12/31/2020 using 12/31/2019 IRA value.