Current through Register Vol. 63, No. 9, September 1, 2024
(1) Definitions. The following definitions
apply for the purposes of this rule:
(a)
"Designated Beneficiary" means:
(A) A natural
person designated as a beneficiary by the participant as provided in OAR
459-050-0060; who is not an eligible designated beneficiary; or
(B) If a trust is designated as a
beneficiary, the individual beneficiaries of the trust will be treated as
designated beneficiaries if the trust satisfies the requirements in section (2)
of this rule.
(C) If the
beneficiary is not a person or a trust satisfying these requirements, the
participant, alternate payee, or surviving beneficiary will be deemed to have
no designated beneficiary only for purposes of required minimum distributions
under IRC 409(a)(9), and distribution shall be made in accordance with section
(10) of this rule.
(b)
"Eligible Designated Beneficiary" means a natural person designated as
beneficiary by the participant as provided in OAR 459-050-0060 who is
determined on the date of the plan participant's death as:
(A) The surviving spouse;
(B) A child of the plan participant who has
not reached majority;
(C) Disabled
(within the meaning of section IRC 72(m)(7));
(D) A chronically ill individual within the
meaning of section IRC 7702B(c)(2); or
(E) Any other individual who is not more than
10 years younger than the plan participant.
(c) "Life Expectancy" means the length of
time a person of a given age is expected to live as set forth in Treasury
Regulation Section 1.72-9. Required minimum distributions shall be calculated
so as to satisfy the requirements of Section 401(a)(9) using the life
expectancy tables provided in Treasury regulations. Life expectancies may not
be recalculated after the initial determination, except as otherwise required
under Oregon or federal law.
(d)
"Required Beginning Date" means April 1 of the calendar year following the
later of:
(A) The calendar year in which the
participant reaches:
(i) 701/2 years of
age in 2019 or earlier;
(ii) 72
years of age in calendar years 2020 through 2022;
(iii) 73 years of age in calendar years 2023
through 2032; and
(iv) 75 years of
age beginning in 2033 and later; or
(B) The calendar year in which the
participant retires.
(e)
"Required Commencement Date" means the date that the deferred compensation plan
must begin to distribute all or part of an account to a surviving
beneficiary.
(2) A trust
as beneficiary. If a trust is designated as a beneficiary, the individual
beneficiaries of the trust will be treated as designated beneficiaries as
defined in subsection (1)(a) of this rule if by December 31 of the calendar
year following the death of a person who designated a trust as beneficiary, the
trust satisfies the following conditions:
(a)
The trust must be irrevocable, or become irrevocable by its terms at the time
of the person's death;
(b) The
trust's beneficiaries must be natural persons who are identifiable from the
trust instrument; and
(c) One of
the following must be provided to the Deferred Compensation Program:
(A) A list of all beneficiaries of the trust,
including contingent beneficiaries, along with a description of the portion to
which they are entitled and any conditions on their entitlement, all corrected
certifications of trust amendments, and a copy of the trust instrument if
requested by the Deferred Compensation Program; or
(B) A copy of the trust instrument and copies
of any amendments after they are adopted.
(3) Applicable law. Distributions under the
Deferred Compensation Program shall be made in accordance with Internal Revenue
Code (IRC) Section 401(a)(9), Treasury regulations, Internal Revenue Service
rulings and other interpretations issued, including Proposed Treasury
Regulation Section 1.401(a)(9)-2. IRC Section 401(a)(9) overrides the
provisions of this rule and any other statute or rule pertaining to the
required minimum distribution requirements and any manners of distributions, if
they are found to be inconsistent with IRC Section 401(a)(9).
(a) If a participant, alternate payee, or
surviving beneficiary has not begun distribution or elected a minimum
distribution by the beginning date or commencement date required in this rule
and IRC Section 401(a)(9), the Deferred Compensation Program shall begin
distribution of the minimum amount required as provided under OAR
459-050-0080(2)(e) or, if required, the entire account. Distribution under this
subsection is subject to the provisions of OAR 459-050-0120(5).
(b) The required minimum distribution amount
may never exceed the entire account balance on the date of
distribution.
(4) Minimum
distribution requirements for participants. Distributions must begin no later
than the participant's required beginning date.
(a) The participant's entire account balance
shall be distributed over the participant's life expectancy or over a period
not extending beyond the participant's life expectancy without regard to the
designated beneficiary's age unless the designated beneficiary is a spouse who
is more than 10 years younger than the participant.
(b) If the designated beneficiary is a spouse
and is more than 10 years younger than the participant, the entire account
balance shall be distributed over the joint lives of the participant and the
designated beneficiary.
(c) The
participant's entire account(s) balance in the Deferred Compensation Program
shall be distributed first from the Deferred Compensation Account unless the
participant indicates otherwise.
(5) Minimum distribution requirements for
alternate payees. The minimum distribution requirements applicable to an
alternate payee are determined by whether a Qualified Domestic Relations Order
(QDRO) allocates a separate account to the alternate payee or provides that a
portion of a participant's benefit is to be paid to the alternate payee.
(a) If a separate account is established in
the name of the alternate payee under OAR 459-050-0210, required minimum
distributions to the alternate payee must begin no later than the participant's
required beginning date. The alternate payee's entire account balance shall be
distributed over the alternate payee's life expectancy or over a period not
extending beyond the alternate payee's life expectancy.
(b) If no separate account is established in
the name of the alternate payee and the alternate payee is paid a portion of a
participant's benefit, the alternate payee's portion of the benefit shall be
aggregated with the amount distributed to the participant and will be treated,
for purposes of meeting the minimum distribution requirement, as if it had been
distributed to the participant.
(6) Manners of distribution available to
surviving designated beneficiaries. A surviving designated beneficiary may
choose a manner of distribution and apply for a distribution as provided for in
OAR 459-050-0080. If the distribution to a participant has begun in accordance
with section 401(a)(9)(A)(ii) and the participant dies before the entire
account has been distributed or after distributions are required to begin under
section (4) of this rule, distributions to the surviving eligible designated
beneficiary must be made at least as rapidly as under the manner of
distribution used before the participant's death, and distribution to the
surviving designated beneficiary must be completed by December 31 of the
calendar year containing the 10th anniversary of the participant's
death.
(7)
(a) Distributions treated as having begun.
Distributions from an individual account are not treated as having begun to a
participant in accordance with section 401(a)(9)(A)(ii) until the participant's
required minimum distribution beginning date, without regard to whether
distributions from an individual account have been made before the required
beginning date.
(b) If distribution
has been made before the required beginning date in the form of an irrevocable
annuity, the distributions are treated as having begun if a participant dies
after the annuity starting date but before the required beginning date. The
annuity starting date will be deemed the required minimum distribution
beginning date.
(8)
Required commencement date for a surviving designated beneficiary. If a
participant dies before distributions are required to begin or are treated as
having begun, the entire account balance must be distributed to a designated
beneficiary or eligible designated beneficiary by December 31 of the calendar
year containing the 10th anniversary of the participant's death.
(9)
(a)
Required commencement date for a surviving spouse's beneficiary. If the
surviving spouse dies after the participant's death but before distributions to
the spouse have begun, any death benefits payable to the surviving spouse's
beneficiary will be applied as if the surviving spouse were the participant.
The date of death of the surviving spouse will be substituted for the date of
death of the participant.
(b) A
death benefit payable to the surviving spouse of the deceased participant's
surviving spouse shall be distributed as provided in section (8) of this
rule.
(10)
(a) Required commencement date if no
designated beneficiary or eligible designated beneficiary: If a participant
dies before the required beginning date with no designated beneficiary or
eligible designated beneficiary as defined in section (1) of this rule the
total account balance must be distributed by December 31 of the calendar year
containing the fifth anniversary of the participant's death.
(b) If a participant dies after the required
beginning date with no designated or eligible designated beneficiary as defined
in section (1) of this rule, the applicable distribution period must not be
longer than the participant's life expectancy.
(11) Notwithstanding any other sections of
this rule and pursuant to the Coronavirus Aid, Relief, and Economic Security
Act of 2020, required minimum distribution under IRC 401(a)(9) is waived for
calendar year 2020, including 2019 required minimum distribution that would be
made between January 1 and April 1, 2020.
Statutory/Other Authority: ORS
243.470
Statutes/Other Implemented: ORS
243.401 - 243.507 &
Pub. L. No.
116-136
