TIAA-CREF is telling its clients that they still have to take the RMD in 2009, but then return the amount they wish to suspend. They also say that the amount to be suspended must be returned within 60 days of receiving the distribution.
This sounds like a bookkeeping nightmare.
Is this really the way the suspension will work?
Absolutely not. Since today is only Jan 1, I'm pretty sure they'll get their story straight shortly.
Joe
Just when you think you'd heard it all; along comes this from TIAA Creef, whoever they are. Sounds like the writer of that blurb was imbibing too liberally on the eggnog before Christmas.
However; we all need to get word to our clients ASAP about this important item because some are already set up on "automatic" withdrawals.
ChEAr$, Harlan Lunsford, EA n LA
I have no idea where you may have received your information. Here is the TIAA-CREF Qs&As on the 2009 RMD. They are correct as written.
Can I defer required minimum distributions in 2009?
President Bush signed into law new legislation that allows individuals who are subject to required minimum distribution rules to suspend required minimum distributions from their retirement plan or Individual Retirement Accounts in 2009 without penalty.
The law is intended to provide relief to people concerned about the potential impact of ongoing financial market volatility on their retirement accounts.
If you expect to receive a required minimum distribution in 2009 that you would like to suspend, you will need to contact TIAA-CREF at 1 800 842-2776 to request a voluntary suspension.
The relief treats equally individuals who usually take the "required distribution" amount monthly and those who take a lump sum amount at the end of the year.
Will suspensions be available for beneficiaries (such as spouses or partners), or will they be limited to the original account holder?
Account holders or their beneficiaries who are required to receive a required minimum distribution payment in 2009 may voluntarily request that the payment be suspended.
What if I receive a minimum distribution payment in 2009 that I did not want to receive?
Individuals may return any minimum distributions received in
2009, provided they do so within 60 days of the minimum distribution payment. The Minimum Distribution Statement you receive from TIAA-CREF in January will include instructions for returning your payment.Can I take a partial distribution?
Yes. You would first need to receive your 2009 minimum distribution payment and then return whatever amount you don't want to take. The Minimum Distribution Statement you receive from TIAA-CREF in January will include instructions for returning all or part of your payment.
I depend on my distribution and do not want to suspend it. What should I do?
You do not need to take any action. Participants who receive minimum distributions will continue to receive them unless you notify TIAA-CREF that you would like the payment to be suspended.
If you choose to receive your minimum distribution payment, keep in mind that since your 2009 required distribution is based on your 2008 year-end account value, the amount you receive may be less because of recent fluctuations in the stock market particularly if your allocation includes equities.
There may be a misunderstanding here.
TIAA-CREF offers a "Minimum Distribution Option" (MDO) plan which people having retirement savings in TIAA-CREF can sign up for _voluntarily_.
Once you sign up for this plan (which requires a fair amount of paperwork), each year they compute your RMD for you and automatically send it to you (by direct transfer into one of your bank accounts, if you like) each year on a date you've chosen.
I suspect they're telling people on this MDO plan that TIAA-CREF will continue to make these MDO payments in 2009, as scheduled, unless the account holder specifically tells them, before the automatic distribution date, NOT to do so.
And, I suspect that they're also saying that if someone on this MDO plan suddenly realizes, after the MDO payment has been made, that they don't want it to have been made, they'll make some provisions to reverse the transactions.
========================================= MODERATOR'S COMMENT: This explanation makes sense.
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