Question

16. Which of the following is true regarding minimum distribution rules?

A. If the employee owns more than 10 percent of the company, deferral to the actual retirement date is not permitted.

B. Minimum distributions must be cashed out by the employee and spent.

C. If the annual distribution is less than the minimum amount required, there is a penalty of 20 percent of the amount not distributed.

D. Code Section 401(a)(9) requires plan distributions begin no later than April 1 of the calendar year following the later of the year in which the employee attains age 70 1⁄2 or the year of actual retirement.

Answer 1

The correct answer is option D

Code Section 401(a)(9) requires plan distributions begin no later than April 1 of the calendar year following the later of the year in which the employee attains age 70 1⁄2 or the year of actual retirement

As per IRC 401(a)(9)

Required beginning date means

April 1 of the calendar year following the later of (I) Calendar year in which the employee attains 701/2 age or (II) Calendar year in which employee retires