The required minimum distribution is the amount the participant must withdraw each year after reaching the required beginning date. The participant can always withdraw more than the required minimum. Many defined contribution plans are reducing payment options and moving to lump sum distributions. If the plan pays only lump sum distributions, the new regulations are likely to have very little impact on the plan. Unlike prior regulations, the age of the participant's beneficiary makes no difference in calculating required distributions.
All participants now use a simplified uniform table to determine minimum distributions.
The uniform table is based on the joint life expectancy of the participant and a beneficiary who is ten years younger, regardless of whether the participant has designated a beneficiary. The only exception to using the uniform table is in the case of a participant designating his spouse as beneficiary and the spouse is more than ten years younger than the employee. In this case the IRS allows use of actual joint life expectancies of the employee and spouse. If the spouse dies before the participant, they divorce or the participant designates another beneficiary, the calculations revert back to using the uniform table. Based on the joint life expectancies of the participant and someone ten years younger.