Inherited pension plan put into inherited IRA

[NLQ]

I inherited a pension plan from my sister.  This was divided between 3 people.  I put my share into an inherited IRA in 2026.

I am less than 10 years younger than her, however she did start taking payments from her pension plan.

Being as I am 10 years younger (which would make me an eligible designated beneficiary, but because she was taking payments, does this require me to have to take yearly RMD's?

I cannot get a balance of this at end of 12.31.2025 from her workplace as they tell me it was 0.  I didnt' take my share until 2026 to put into the IRA. 

Do I take my amount I was inherited and figure RMD's from that total?

Thank you.

[ReneV4]

Yes. Because your sister was already taking payments, you must take an annual RMD every year starting in 2026 (The year after her death).

As an eligible designated beneficiary, you have the choice of taking distributions over your own life expectancy, or follow the 10-year rule, which requires you to empty the account by December 31 of the 10th year after her death. Note: Even if you choose this method, you must still take the annual RMDs, as mentioned above.

Yes. For the balance as of 12/31/2025, use the amount that was actually deposited into your inherited IRA in 2026. Take that amount and divide it by your Single Life Expectancy factor based on your age on your birthday in 2026 - Click here to use the IRS Life Expectancy Table to help you determine your RMD.

[dmertz]

You are required to take annual beneficiary RMDs because you are an EDB, not because the decedent died after their Required Beginning Date for RMDs.

Because the decedent died after their RBD, you are not permitted to opt into the 10-year rule.

For what follows, I will assume that this inheritance was truly from an employer pension plan as you say and not from an IRA.  

Regarding the determination of your 2026 RMD, if the plan value on 12/31/2025 was zero, the distribution of your share had to have been made in 2025 and you should have received a 2025 code 4G form 1099-R reporting the distribution.  The amount in box 1 of that Form 1099-R would be the 2025 year-end value because the value change while it is not invested.

If the distribution was actually made in 2026 and will be reported on a 2026 Form 1099-R, the plan was required to pay your 2026 beneficiary RMD to you before rolling over the remainder.  If they made the distribution in 2026 and rolled the entire amount over to the inherited IRA, the inherited IRA now contains an excess contribution equal to the amount of the RMD that was not permitted to be rolled over.

(If the plan was actually an IRA-based plan, the movement of the funds to the inherited IRA is a nonreportable trustee-to-trustee transfer.  Given that the plan had a $0 balance on 12/31/2025 and the funds were deposited into the inherited IRA in 2026, implying that the transfer was in progress on 12/31/2025, the year-end value would be the value deposited since the value cannot change while not invested.)