Are company pension plans subject to RMD?

[IreneS]

Yes.  The Required Minimum Distribution (RMD) rules apply to:

• All employer-sponsored retirement plans, including profit-sharing plans, 401(k) plans, 403(b) plans, and 457(b) plans.
  
• Traditional IRAs and IRA-based plans such as SEPs, SARSEPs, and SIMPLE IRAs.
  
• Roth 401(k) accounts.
  

However, the RMD rules do not apply to Roth IRAs while the owner is alive.

For more information, see the IRS FAQ:  Retirement Plan and IRA Required Minimum Distributions FAQs

[jhalman]

What about a defined benefit plan (a traditional pension)?  Is all of the payment the RMD or is part of the payment RMD?  How can I tell?

[JohnB5677]

In the case of a defined benefit plan, the monthly distributions could be considered the RMD. 

In reality the defined benefit plan does not have an RMD because there is no pool of money that you as an individual have to deplete.  Depending on how you structured your plan before you retired.  The benefits end when you pass.  You may have put your spouse on it, but then you got a reduced benefit and the benefits end when you both pass.  There will be nothing else for the IRS to tax.

[lnabutovsky]

I'm confused. I have pension from the company which pays me monthly the same amount for life. As I understand, RMD depends on the account size and I do not have any account. All money for all participants are coming from the pool which is created with the company money and managing by the company designated  financial specialists

[MaryK4]

Yes, I understand your confusion- my best explanation is- one of the only ways you would not meet your RMD with a defined benefit plan is if for some (unknown) reason you would say "Just don't send me any of my pension." 

@lnabutovsky

[macuser_22]

Virtually all pension plans, defined contribution plans, and annuities in existence today fall under section 401 of the tax code.

Required minimum distributions for defined benefit plans and annuity contracts all require RMD's after age 70 1/2.  If you receive periodic (monthly) payments from any pension plan you can be assured that the custodian of the plan is meeting the requirements so you can safely answer "yes" to the question.

The rules that the plan administrator must use to calculate the RMD as required by §401(a)(9) are defined in § 1.401(a)(9)-6) of the Internal Revenue Code (IRC).

The answer to the question does not go on your tax return, it is simply to make sure you do not owe any penalty for not taking the RMD or use it for an ineligible rollover.

The question is just to be sure that the requirement was met.

https://ttlc.intuit.com/replies/3302117

[lnabutovsky]

If I understood you correctly as I receiving my  monthly checks  I can designate all of them as RMD on my tax return.  It does not affect the results of tax return calculations but allows me not to be hit by penalty.

[macuser_22]

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@lnabutovsky wrote:

If I understood you correctly as I receiving my  monthly checks  I can designate all of them as RMD on my tax return.  It does not affect the results of tax return calculations but allows me not to be hit by penalty.

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Correct. NOTHING about a RMD goes on  your tax return whatsoever.   Just say it was all a RMD and move on.

[Tricuspid48]

My Dad has been receiving retirement pension wages monthly from Bridgestone for 20 years. He is now 92. How do I know if I need to figure out if he has a RMD and if so how much it is? I don't know how much he has left in his plan. Its not a IRA

I'm using turbotax and it says I need to show what his RMD is I just don't know how to figure it out. Does the RMD apply to him and if so how do I figure it out. My Mom is also in a similar situation with her pension plan.

HELP!!  

[DoninGA]

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@Tricuspid48 wrote:

My Dad has been receiving retirement pension wages monthly from Bridgestone for 20 years. He is now 92. How do I know if I need to figure out if he has a RMD and if so how much it is? I don't know how much he has left in his plan. Its not a IRA

I'm using turbotax and it says I need to show what his RMD is I just don't know how to figure it out. Does the RMD apply to him and if so how do I figure it out. My Mom is also in a similar situation with her pension plan.

HELP!!  

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All Pension payments to someone who is age 70 1/2 or older are an RMD.

[jimmarywebster]

Pensions are treated like IRAs when reporting them.  My pension 1099 has a box reporting the total distribution and a box for the taxable amount. Which of these amounts do I use? 

[DoninGA]

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@jimmarywebster wrote:

Pensions are treated like IRAs when reporting them.  My pension 1099 has a box reporting the total distribution and a box for the taxable amount. Which of these amounts do I use? 

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If you are referring to an RMD then if you are age 70 1/2 or older All of the pension income is an RMD.

[ColeenD3]

@jimmarywebster

Just enter the 1099-R exactly as it appears. The program will calculate the taxable portion.

[macuser_22]

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@jimmarywebster wrote:

Pensions are treated like IRAs when reporting them.  My pension 1099 has a box reporting the total distribution and a box for the taxable amount. Which of these amounts do I use? 

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Pensions are NOT treated as IRA's at all.  ONLY if the IRA/SEP/SIMPLE box in the 1099-R is check will it be treated as an IRA, but a pension can NEVER have that box checked.

Both the box 1 and box 2a amount  are used.   Enter all 1099-R boxes just as on the form.

Enter a 1099-R here:

Federal Taxes,
Wages & Income
(I'll choose what I work on - if that screen comes up)
Retirement Plans & Social Security,
IRA, 401(k), Pension Plan Withdrawals (1099-R).

OR  Use the "Tools" menu (if online version left side) and then "Search Topics" for "1099-R" which will take you to the same place.

Be sure to choose which spouse the 1099-R is for if this is a joint tax return.
Be sure to pick the correct 1099-R type: Standard 1099-R, CSA-1099-R, CSF-1099-R, RRB-1099-R.

[NOTE: When you get to the "Your 1099-R Entries" screen where you can add another 1099-R, use "continue" to keep going as there are additional interview questions after that screen in most cases. You can always return as shown above.]