[Code of Federal Regulations]
[Title 26, Volume 5]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.401(a)(9)-7]

[Page 218-219]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.401(a)(9)-7  Rollovers and transfers.

    Q-1. If an amount is distributed by one plan (distributing plan) and 
is rolled over to another plan, is the required minimum distribution 
under the distributing plan affected by the rollover?
    A-1. No, if an amount is distributed by one plan and is rolled over 
to another plan, the amount distributed is still treated as a 
distribution by the distributing plan for purposes of section 401(a)(9), 
notwithstanding the rollover. See A-1 of Sec. 1.402(c)-2 for the 
definition of a rollover and A-7 of Sec. 1.402(c)-2 for rules for 
determining the portion of any distribution that is not eligible for 
rollover because it is a required minimum distribution.
    Q-2. If an amount is distributed by one plan (distributing plan) and 
is rolled over to another plan (receiving plan), how are the benefit and 
the required minimum distribution under the receiving plan affected?
    A-2. If an amount is distributed by one plan (distributing plan) and 
is rolled over to another plan (receiving plan), the benefit of the 
employee under the receiving plan is increased by the amount rolled over 
for purposes of determining the required minimum distribution for the 
calendar year immediately following the calendar year in which the 
amount rolled over is distributed. If the amount rolled over is received 
after the last valuation date in the calendar year under the receiving 
plan, the benefit of the employee as of such valuation date, adjusted in 
accordance with A-3 of Sec. 1.401(a)(9)-5, will be increased by the 
rollover amount valued as of the date of receipt. In addition, if the 
amount rolled over is received in a different calendar year from the 
calendar year in which it is distributed, the amount rolled over is 
deemed to have been received by the receiving plan in the calendar year 
in which it was distributed.
    Q-3. In the case of a transfer of an amount of an employee's benefit 
from one plan (transferor plan) to another plan (transferee plan), are 
there any special rules for satisfying section 401(a)(9) or determining 
the employee's benefit under the transferor plan?
    A-3. (a) In the case of a transfer of an amount of an employee's 
benefit from one plan (transferor plan) to another (transferee plan), 
the transfer is not treated as a distribution by the transferor plan for 
purposes of section 401(a)(9). Instead, the benefit of the employee 
under the transferor plan is decreased by the amount transferred. 
However, if any portion of an employee's benefit is transferred in a 
distribution calendar year with respect to that employee, in order to 
satisfy section 401(a)(9), the transferor plan must determine the amount 
of the required minimum distribution with respect to that employee for 
the calendar year of the transfer using the employee's benefit under the 
transferor plan before the transfer. Additionally, if any portion of an 
employee's benefit is transferred in the employee's second distribution 
calendar year but on or before the employee's required beginning date, 
in order to satisfy section 401(a)(9), the transferor plan must 
determine the amount of the minimum distribution requirement for the 
employee's first distribution calendar year based on the employee's 
benefit under the transferor plan before the

[[Page 219]]

transfer. The transferor plan may satisfy the minimum distribution 
requirement for the calendar year of the transfer (and the prior year if 
applicable) by segregating the amount which must be distributed from the 
employee's benefit and not transferring that amount. Such amount may be 
retained by the transferor plan and must be distributed on or before the 
date required under section 401(a)(9).
    (b) For purposes of determining any required minimum distribution 
for the calendar year immediately following the calendar year in which 
the transfer occurs, in the case of a transfer after the last valuation 
date for the calendar year of the transfer under the transferor plan, 
the benefit of the employee as of such valuation date, adjusted in 
accordance with A-3 of Sec. 1.401(a)(9)-5, will be decreased by the 
amount transferred, valued as of the date of the transfer.
    Q-4. If an amount of an employee's benefit is transferred from one 
plan (transferor plan) to another plan (transferee plan), how are the 
benefit and the required minimum distribution under the transferee plan 
affected?
    A-4. In the case of a transfer from one plan (transferor plan) to 
another (transferee plan), the benefit of the employee under the 
transferee plan is increased by the amount transferred in the same 
manner as if it were a plan receiving a rollover contribution under A-2 
of this section.
    Q-5. How is a spinoff, merger or consolidation (as defined in Sec. 
1.414(l)-1) treated for purposes of determining an employee's benefit 
and required minimum distribution under section 401(a)(9)?
    A-5. For purposes of determining an employee's benefit and required 
minimum distribution under section 401(a)(9), a spinoff, a merger, or a 
consolidation (as defined in Sec. 1.414(l)-1) will be treated as a 
transfer of the benefits of the employees involved. Consequently, the 
benefit and required minimum distribution of each employee involved 
under the transferor and transferee plans will be determined in 
accordance with A-3 and A-4 of this section.

[T.D. 8987, 67 FR 18994, Apr. 17, 2002]