Current through Register Vol. 56, No. 18, September 16, 2024
(a) The
ACTS shall comply with the minimum distribution requirements of IRC §
401(a)(9) and the regulations thereunder in accordance with the terms governing
each investment option, unless and to the extent otherwise permitted by law and
regulations or other rules of general applicability published by the Department
of the Treasury or the Internal Revenue Service. For purposes of applying the
distribution regulations of IRC § 401 (a)(9), each investment option is
treated as an individual retirement account (IRA) and distributions shall be
made in accordance with the provisions of Treasury Reg. § 1.408-8, except
as provided in Treasury Reg. § 1.403(b)-6(e).
1. Notwithstanding this section, and unless
otherwise provided in the investment option, a participant or beneficiary who
would have been required to receive required minimum distributions for 2009 but
for IRC § 401 (a)(9)(H) (2009 RMDs), and who would have satisfied that
requirement by receiving distributions that are equal to the 2009 RMDs or one
or more payments in a series of substantially equal distributions (that include
the 2009 RMDs) made at least annually and expected to last for the life (or
life expectancy) of the participant, the joint lives (or joint life expectancy)
of the participant and the participant's beneficiary, or for a period of at
least 10 years (extended 2009 RMDs) will receive those distributions for 2009,
unless the participant or beneficiary chooses not to receive such
distributions. Participants and beneficiaries described in this paragraph will
be given the opportunity to elect to stop receiving the distributions described
in this paragraph. In addition, solely for purposes of applying the direct
rollover provisions of N.J.A.C. 17:7-12.13, 2009 RMDs and extended 2009 RMDS
will be treated as eligible rollover distributions in 2009.
(b) The distribution requirements
in this section generally apply to a participant's entire account. However,
these requirements do not apply to the undistributed portion of a participant's
account valued as of December 31, 1986, exclusive of subsequent earnings (the
pre-1987 account balance), provided that the applicable requirements of
Treasury Reg. § 1.401(a)(9)-6(e)(6) are satisfied. In this case, a
participant's pre-1987 account balance shall be distributed in accordance with
the incidental benefit requirements of Treasury Reg. § 1.401- 1(b)(1)(i).
To the extent permitted under Treasury Reg. § 1.403(b)-6(e)(7), a
participant's investment options under the ACTS, or under the ACTS and other
IRC § 403 (b) plans in which the participant participates as an employee,
may be aggregated and the minimum distribution requirements satisfied by
distribution from any one or more of the investment options.
(c) Distribution of the participant's account
will begin no later than the first day of April following the later of the
calendar year in which the participant attains age 70 and one-half or the
calendar year in which the participant retires from employment (the required
beginning date) over the life of the participant, the lives of the participant
and beneficiary, or a period certain not extending beyond the life expectancy
of the participant or the joint and last survivor expectancy of the participant
and beneficiary.
1. If the participant's
account is not distributed as an annuity, the amount to be distributed each
year, beginning with the calendar year the participant attains age 70 and
one-half or retires and continuing through the year of death, shall not be less
than the quotient obtained by dividing the value of the account, including
outstanding rollovers and transfers, as of the end of the preceding year by the
distribution period in the Uniform Lifetime Table in Q&A- 2 of Treasury
Reg. § 1.401(a)(9)- 9, using the participant's age as of his or her
birthday in the year. However, if the participant's sole beneficiary is his or
her surviving spouse and such spouse is more than 10 years younger than the
participant, then the distribution period is determined under the Joint and
Last Survivor Table in Q&A-3 of Treasury Reg. § 1.401(a)(9)-9, using
the ages as of the participant's and spouse's birthdays in the year.
2. If the participant's account is
distributed as an annuity, the distribution periods described in (c)1 above
cannot exceed the periods specified in section Treasury Reg. §
1.401(a)(9)-6. Payments must be made in periodic payments at intervals of no
longer than one year and must be either non-increasing or they may increase
only as provided in Q&As-1 and -4 of Treasury Reg. § 1.401(a)(9)-6. In
addition, any distribution must satisfy the incidental benefit requirements
specified in Q&A-2 of Treasury Reg. § 1.401(a)(9)-6.
3. The required minimum distribution for the
year the participant attains age 70 and one-half or retires (or first required
annuity payment) can be made as late as the required beginning date. The
required minimum distribution (or required annuity payment) for any other year,
including the year that contains the required beginning date, must be made by
the end of such year.
(d) If the participant's account is
distributed as an annuity and the participant dies on or after required
payments begin, the remaining portion of the participant's interest will
continue to be distributed under the contract option chosen. If the
participant's account is not distributed as an annuity and the participant dies
on or after the required beginning date, the remaining portion of the
participant's interest will be distributed at least as rapidly as follows:
1. If the beneficiary is someone other than
the participant's surviving spouse, the remaining interest will be distributed
over the remaining life expectancy of the beneficiary, with such life
expectancy determined using the beneficiary's age as of his or her birthday in
the year following the year of the participant's death, or over the period
described in (d)2 below, if longer.
2. If the participant's sole beneficiary is
the participant's surviving spouse, the remaining interest will be distributed
over such spouse's life or over the period described in (d)3 below, if longer.
Any interest remaining after such spouse's death will be distributed over such
spouse's remaining life expectancy determined using the spouse's age as of his
or her birthday in the year of the spouse's death, or, if the distributions are
being made over the period described in (e) below, over such period.
3. If there is no beneficiary, or if
applicable by operation of (d)1 or 2 above, the remaining interest will be
distributed over the participant's remaining life expectancy determined in the
year of the participant's death.
4.
The amount to be distributed each year under (d)1, 2, or 3 above, beginning
with the calendar year following the calendar year of the participant's death,
is the quotient obtained by dividing the account as of the end of the preceding
year by the remaining life expectancy specified in such paragraph. Life
expectancy is determined using the Single Life Table in Q&A-1 of Treasury
Reg. § 1.401(a)(9)-9. If distributions are being made to a surviving
spouse as the sole beneficiary, such surviving spouse's remaining life
expectancy for a year is the number in the Single Life Table corresponding to
such surviving spouse's age in the year. In all other cases, remaining life
expectancy for a year is the number in the Single Life Table corresponding to
the beneficiary's or participant's age in the year specified in (d)1, 2, or 3
above and reduced by one for each subsequent year.
(e) If the participant dies before the
required beginning date (or the date required for payments to begin, in the
case of any annuity), his or her entire interest will be distributed at least
as rapidly as follows:
1. If the beneficiary
is someone other than the participant's surviving spouse, the entire interest
will be distributed, starting by the end of the calendar year following the
calendar year of the participant's death, over the remaining life expectancy of
the beneficiary, with such life expectancy determined using the age of the
beneficiary as of his or her birthday in the year following the year of the
participant's death, or, if elected, in accordance with (e)3 below.
2. If the participant's beneficiary is the
participant's surviving spouse, the entire interest will be distributed,
starting by the end of the calendar year following the calendar year of the
participant's death (or by the end of the calendar year in which the
participant would have attained age 70 and one-half, if later), over such
surviving spouse's life, or, if elected, in accordance with (e)3 below. If the
surviving spouse dies before distributions are required to begin, the remaining
interest will be distributed, starting by the end of the calendar year
following the calendar year of the surviving spouse's death, over the surviving
spouse's beneficiary's remaining life expectancy determined using such
beneficiary's age as of his or her birthday in the year following the death of
the surviving spouse, or, if elected, will be distributed in accordance with
(e)3 below. If the surviving spouse dies after distributions are required to
begin, any remaining interest will be distributed over the surviving spouse's
remaining life expectancy determined using the surviving spouse's age as of his
or her birthday in the year of the surviving spouse's death.
3. If there is no beneficiary, or if
applicable by operation of (e)1 or 2 above, the entire interest will be
distributed by the end of the calendar year containing the fifth anniversary of
the participant's death (or of the surviving spouse's death in the case of the
surviving spouse's death before distributions are required to begin under (e)2
above).
(f) Except in
the case of a distribution as an annuity, the amount to be distributed each
year under (e) above is the quotient obtained by dividing the value of the
account as of the end of the preceding year by the remaining life expectancy
specified in (e)1, 2, or 3 above. Life expectancy is determined using the
Single Life Table in Q&A-1 of Treasury Reg. § 1.401(a) (9)-9. If
distributions are being made to a surviving spouse as the beneficiary, the
surviving spouse's remaining life expectancy for a year is the number in the
Single Life Table corresponding to the surviving spouse's age in the year. In
all other cases, remaining life expectancy for a year is the number in the
Single Life Table corresponding to the beneficiary's age in the year specified
in (e) above and reduced by one for each subsequent year. The "value" of the
account or the "interest" in the annuity includes the amount of any outstanding
rollover and transfer and the actuarial value of any other benefits provided
under the annuity such as guaranteed death benefits, to the extent required
under applicable regulations.
(g)
For purposes of (d) and (e) above, required annuity payments are considered to
begin on the participant's required beginning date or, if applicable, on the
date distributions are required to begin to the surviving spouse under (e)2
above. However, if distributions start prior to the applicable date in the
preceding sentence, on an irrevocable basis (except for acceleration) under an
annuity contract meeting the requirements of Treasury Reg. §
1.401(a)(9)-6, then required annuity payments are considered to begin on the
annuity starting date.
(h) If a
participant has a separate account attributable to rollover contributions to
the ACTS, to the extent permitted by the terms governing the applicable
investment option, the participant may at any time elect to receive a
distribution of all or any portion of the amount held in the rollover
account.
