I have an IRA-related question that I haven't been able to find an answer to. I looked through all the resources I can find, including the IRS website, but to no avail.

When we have an IRA that is subject to a required minimum distribution, we send out the RMD notice at the beginning of the year and indicate on Form 5498 that the account is subject to a RMD. If the customer doesn't take the RMD out of the IRA, does the bank have any obligations at that point?

Right now we send out reminder letters toward the end of the year and give the customer the opportunity to send back the letter indicating their intent to take the RMD from an IRA at another institution. Are we required to document that intent? What if the customer doesn't take the RMD and we never hear back from them? Do we have any reporting obligations?

As I said, I haven't been able to find the answer to those questions and am hoping some IRA experts can point me in the right direction.

I don't have a cite for you, but my understanding has been---so long as you can document that you sent out the notices, advising the customer of the RMD, and you have properly informed the IRS that the account is subject to RMD, you have fulfilled your legal obligation with respect to the RMD.

You can not force the client to take it. If they don't it's their penalty and their problem.

That said, from a customer service standpoint, if you have one client or a small number of clients in this type of situation you may wish to make personal contact with them and discuss the potential issues involved (of course, being catious not to dispense tax or legal advice).

If you have a large number of client in this situation, you might wish to take a look at your communication pieces and the letters that are being sent out. Are they clear, understandable, and written in "plain english" (as opposed to legalize).

You might also wish to consult with your bank counsel on the matter and see what suggestions s/he may have.

Thanks for the response. I was thinking along the same lines because I couldn't find anything to the contrary, but wanted some confirmation that I wasn't missing something (and I don't even mind that the confirmation comes from someone whose Mind is Mush).