A participant terminated in late 2009. They turn 70 1/2 in October 2010, hwoever, they would like to take a distribution now, before they have reached age 70 1/2. Must they take part of the distribution as an RMD and the remaining portion is an eligible rollover distribution? Or has the liability for the 70 1/2 RMD not been incurred yet since they are not 70 1/2, and thus no portion of it is subject to RMD? My thinking is that the RMD liability has been incurred already since the amount would actually be based on the participant balance at 12/31/2009, but have not found a definitive answer yet. Thoughts?

If a minimum distribution is required for a calendar year, the amounts distributed during that calendar year are treated as required minimum distributions under section 401(a)(9), to the extent that the total required minimum distribution under section 401(a)(9) for the calendar year has not been satisfied. 1.402(c)-(2) Q&A 7.