When do I take my first RMD from a pension lump sum rollover to an IRA?

[miltf]

Presumably, the plan administrators never calculated any of these values.  The administrator is Fidelity,  so I would hope that they would know what they are doing.  So, assuming these values are now unknown, how, at this time, could an RMD be calculated after the fact?

[Critter]

Seek local professional assistance in this matter if the IRA & Pension trustees are not competent as the penalties for failure to take out the RMD timely are severe.

[macuser_22]

When did you actually retire and leave employment?

[miltf]

I retired and left employment with this company (Hewlett Packard) in 2008.

[miltf]

I was wondering what are the qualifications of the people in this forum that are replying to my question. (I appreciate all of your responses.)  How would I know that "local professional assistance" would be any more knowledgeable?

[macuser_22]

Posters here are other users that volunteer to answer questions in the public forum with various amounts of expertise.

Your situation is not a simple question and would probably require research and having the plan details.

Bust is seems clear that if you were vested in a pension 11 years ago then the pension was subject to a RMD in the year that you turned 70 1/2.

As Critter#2 said the penalties for failing to take a RMD can be 50% of the RMD amount.

[miltf]

ok, the distribution is finally in my Fidelity account and I can see (I think) exactly what was done.  Using the lump sum payment calculated when I requested the payout (Feb 2019) they divided by 27.4 for the age 70 RMD.  They then divided by 26.5 for the age 71 RMD.  They added these two results to achieve a total RMD for age 70 and 71.  Then they took from the RMDs 10% for Fed withholding and 1% for Calif. withholding.  The lump sum minus the RMDs went into a Fidelity IRA.  The RMDs minus the withholdings will be sent to me as check.  Technically, it seems like, the age 71 RMD should have been based on the lump sum minus the age 70 RMD, but they used the original amount.  At this point, I'm not too worried about that.

[fanfare]

this is not a regular pension but a supplementary benefit plan vested entirely to the employee alone. I had the same plan and converted it to an IRA, although I did do that before the age of 70 1/2.
I believe the second answer is correct. take an RMD in 2020.

[fanfare]

"the distribution is finally in my Fidelity account " well that answers that.

[macuser_22]

Then is sounds like you are all set then, and yes, they should have adjusted the value for the 2nd RMD, but that just means the RMD was a bit more then it should have been.

Since both the 2018 and 2019 RMD's have been satisfied then your 2020 RMD will be based on the 2019 December 31, value of all Traditional IRA accounts.

[fanfare]

@miltf how do you deduce all that by looking at the funds in your new IRA account ?

[miltf]

There was also additional information specific to the pension payout under the HP pension tab.

[dmertz]

I agree, it appears that Fidelity actually did the right thing and distributed the RMDs before rolling over the remainder despite the information that you got from someone there along the way suggested that they would not do that.

"Technically, it seems like, the age 71 RMD should have been based on the lump sum minus the age 70 RMD, but they used the original amount. "  Actually, the IRS has provided guidance that this sort of adjustment is *not* to be done when a particular year's RMD is taken in a subsequent year.  They've apparently treated the pension as having the same value on December 31, 2017 and on December 31, 2018, which is not unreasonable since it probably represented the same future value given the way the actuarial tables work.

[miltf]

Now my only concern is that the distribution didn't occur until April 5.  If the 2018 RMD needed to happen by April 1, do I need to worry about it?

[dmertz]

You'll need include Form 5329 with your 2018 tax return requesting waiver of the excess-accumulation penalty on the late-taken 2018 RMD.  If you've already filed, you should be able to file the 2018 Form 5329 stand-alone.