required beginning date (RBD)

Definition

The date by which a retirement account owner must begin distributing required minimum distribution (RMD) amounts from a Traditional, SEP or SIMPLE IRA, a qualified plan account 403(b) or 457(b) account. For IRAs, the required beginning date (RBD) is April 1 of the year following the year the individual reaches age 70 ½.

For qualified plans, 403(b) and 457(b) accounts, the RBD is April 1, following the calendar year in which the later of the following occurs:

The year the individual reaches age 70 ½ or
The year the individual retires from employment with the employer that sponsors the plan.

But see "additional helpful information ' below.

Note: For 5-percent owners, the required beginning date is April 1 of the calendar year following the calendar year in which the employee attains age 70½, even if the employee has not retired.

Additional Helpful Information

For purposes of the RMD rules, a 5-percent owner is an employee who is a 5-percent owner with respect to the plan year ending in the calendar year in which the employee attains age 70½.

A plan is permitted to provide that the RBD for all employees is April 1 of the calendar year following the calendar year in which an employee attains age 70½, regardless of whether the employee is a 5-percent owner.[Treas. Reg. 1.401(a)(9)-2, Q&A 2(e)]. That is, while the regulations do permit the plan to be designed to allow employees (other than 5% owners) to delay their RBD past age 70 ½ if they are still employed, it is an optional provision. Therefore, the plan can define the RBD for all employees as April 1 of the year, following the year they reache age 70 ½. Therefore, employees must refer to the summary plan description (SPD) or check with the plan administrator to determine the RBD that applies to their plan

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