MINIMUM DISTRIBUTION INCIDENTAL BENEFIT (MDIB) Sample Clauses
The Minimum Distribution Incidental Benefit (MDIB) clause ensures that retirement plan distributions to beneficiaries, such as a spouse, do not exceed certain limits that would compromise the plan's primary purpose of providing retirement income to the participant. In practice, this clause restricts the amount and timing of benefits paid to non-participant beneficiaries, often by requiring that distributions follow specific IRS rules, such as minimum required distributions based on life expectancy tables. The core function of the MDIB clause is to maintain the tax-advantaged status of the retirement plan by preventing excessive benefits to beneficiaries, thereby ensuring compliance with federal regulations and preserving the plan's intended use.
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MINIMUM DISTRIBUTION INCIDENTAL BENEFIT (MDIB). If the Participant's spouse is not his/her designated Beneficiary, a method of payment to the Participant (whether by Participant election or by Plan Administrator direction) must satisfy the MDIB requirement under Code ss.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 Plan Administrator 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 Plan Administrator 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.