Minimum Distribution Incidental Benefit Sample Clauses
The Minimum Distribution Incidental Benefit clause ensures that retirement plan distributions to participants are structured so that the primary purpose remains providing retirement income, rather than maximizing death benefits for beneficiaries. In practice, this clause limits the amount or timing of death benefits that can be paid from a retirement plan, often by requiring that distributions to a participant begin by a certain age or by restricting the payout options to beneficiaries. Its core function is to maintain the tax-qualified status of retirement plans by complying with IRS rules, thereby preventing the plan from being used primarily as a life insurance vehicle.
Minimum Distribution Incidental Benefit. 6.02(A) (6.03)
Minimum Distribution Incidental Benefit. If the Participant's spouse is not his designated Beneficiary, a method of payment to the Participant (whether by Participant election or by Advisory Committee direction) must satisfy the minimum distribution incidental benefit ("MDIB") requirement under Code (S) 401(a)(9) for distributions made on or after the Participant's RBD and before the Participant's death. To satisfy the MDIB requirement, the Advisory Committee will compute the Participant's required minimum distribution by substituting the applicable MDIB divisor for the applicable life expectancy factor, if the MDIB divisor is a lesser number. Following the Participant's death, the Advisory Committee will compute the minimum distribution required by Section 6.02(D) solely on the basis of the applicable life expectancy factor and will disregard the MDIB factor.