Pioneer Investments: RMD Questions & Answers

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RMD Questions & Answers

Q. Will Pioneer help me determine my RMD?
A. Yes. Pioneer, together with your investment professional, can help you determine your required minimum distribution for the assets that are held in Pioneer plans, including Pioneer IRAs and 403(b) accounts.

Q. Will my RMD distribution be reported to the IRS?
A. Yes. Each year, Pioneer sends the IRS information regarding the amount of the annual distribution taken from your Pioneer retirement account(s). For IRAs, Pioneer reports to the IRS that you are required to take a distribution.

Q. How do I handle my RMD if I hold multiple IRA accounts?
A. The RMD is calculated separately for each IRA that you maintain. However, the required distribution may be taken from any one or more of your IRA accounts, regardless of where the assets are actually invested.

The same rule applies to 403(b) custodial accounts. However, if you hold both types of accounts, distributions taken from your IRAs will not satisfy the annual distribution requirements from your 403(b) accounts and vice versa.

Q. Can I roll over my RMD into a Roth IRA?
A. No. Your annual RMD from your traditional IRA may not be rolled over or "converted" to a Roth IRA. However, if you meet the Roth IRA conversion eligibility requirements, you may convert the remaining portion of your traditional IRA assets to a Roth IRA. Converted assets would be subject to ordinary income taxes in the year of the conversion. Your account would no longer be subject to the RMD rules for the remainder of your lifetime, and your assets could continue to grow on a tax-free basis. (Beneficiaries of inherited Roth IRAs are subject to RMDs - even though the assets may be able to be distributed tax-free.) We suggest that you contact your investment professional or qualified tax adviser before converting.

Q. What happens to my RMD if I change my beneficiary or if my beneficiary dies?
A. Changing your beneficiary will generally not increase the amount of your RMD during your lifetime. If your primary beneficiary dies before you, and you have not already named a contingent or secondary beneficiary, make sure you update your beneficiary designation to ensure that your retirement account will be left according to your wishes.

Q. What happens if my beneficiary dies after I do, but before the date that beneficiaries are determined?
A. If your beneficiary dies after you, but before September 30 following the year in which you die, your beneficiary will still continue to be considered for RMD purposes, regardless of who is listed as contingent beneficiary.

Q. Who will receive my retirement account if I do not name a beneficiary?
A. Each retirement account has different default rules if you die without naming a beneficiary. Your Pioneer retirement plan automatically provides that your beneficiary will be your surviving spouse, if living; otherwise your retirement assets will go to your estate. Naming your estate as beneficiary may result in undesirable tax consequences for your heirs. Work with your investment professional and tax adviser to make sure that your retirement plan assets are considered in your overall estate plan.

Q. When are my beneficiaries determined?
A. Under the IRS rules, your beneficiaries are determined on September 30 following the year in which you die.

Q. Can my beneficiary disclaim some or all of my retirement account?
A. Generally, a beneficiary may disclaim the right to be considered a beneficiary, provided the disclaimer occurs within nine months of the plan owner's death and satisfies certain other requirements. Check with your tax adviser for more information.

Q. When must my beneficiary begin to take payments?
A. Generally, a beneficiary must begin receiving distributions no later than December 31 of the year following the plan owner's death.

Q. Can my beneficiary also designate a beneficiary on the inherited IRA?
A. Yes. Tax rules allow this. Beneficiaries of inherited IRAs can also name beneficiaries who can take the remaining portion of the life expectancy payouts should the original beneficiary die before the account is completely paid out.

The foregoing provides general information about RMDs and how Pioneer can help you comply with IRS requirements. It is not intended to provide you with specific tax or retirement planning advice.

We suggest you contact your investment professional or a qualified tax advisor before making any decisions about how and when to begin taking your RMD.

Please contact your investment professional or Pioneer's Retirement Plans Account Information line at 1-800-622-0176, to request more information.

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