N.J. Admin. Code § 17:1-17.2

Current through Register Vol. 56, No. 23, December 2, 2024

Section 17:1-17.2 - Compliance with 26 U.S.C. 401(a)(9) for required minimum distributions

(a) Pursuant to 43:3C-9.6, each retirement system shall pay all benefits in accordance with a reasonable and good faith interpretation of the requirements of 26 U.S.C. § 401(a)(9) Internal Revenue Code and the regulations in effect under that section, as applicable to a governmental plan within the meaning of 26 U.S.C. § 414(d). Each retirement system is subject to the following provisions:

1. If a member fails to apply for retirement benefits by the member's required beginning date as defined under 43:3C-9.6, the retirement system shall begin distribution of the monthly benefit as required by this section in the standard form.

2. Unless distributed in a lump sum, the member's entire interest must be distributed over the member's life or the lives of the member and a designated beneficiary, or over a period not extending beyond the life expectancy of the member or of the member and a designated beneficiary.

3. If a member dies after the required distribution of benefits has begun, the remaining portion of the member's interest must be distributed at least as rapidly as under the method of distribution before the member's death.

4. If a member dies before required distribution of the member's benefits has begun, the member's entire interest must be distributed within five years of his or her death, unless it is to be distributed in accordance with the following:

i. If the member's surviving spouse is the sole designated beneficiary, the member's remaining interest in the plan is distributed or begins to be distributed by December 31 of the calendar year immediately following the calendar year in which the member died or by December 31 of the calendar year in which the participant would have attained age 70 1/2, if later; or

ii. If the member's surviving spouse is not the sole designated beneficiary, the member's remaining interest is to be distributed over the life of the designated beneficiary or over a period not extending beyond the life expectancy of the designated beneficiary. Such distribution shall begin no later than December 31 of the calendar year immediately following the calendar year of the member's death.

N.J. Admin. Code § 17:1-17.2