New Jersey Administrative Code
Title 17 - TREASURY - GENERAL
Chapter 7 - ALTERNATE BENEFIT PROGRAM
Subchapter 12 - NEW JERSEY ADDITIONAL CONTRIBUTIONS TAX-SHELTERED PROGRAM (ACTS)
Section 17:7-12.12 - Minimum distributions

Universal Citation: NJ Admin Code 17:7-12.12

Current through Register Vol. 55, No. 48, December 18, 2023

(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.

Adopted by 50 N.J.R. 1616(a), effective 7/16/2018

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