If the plan has segregated accounts and a participant invests his/her money in an annuity what are the requirements regarding the death benefit? If that participant dies does the death benefit just simply go to the beneficiary? Does the beneficiary have to be the Trust?

I've never dealt with this and want to make sure I understand the nuances and any possible problems.

Can you tell me briefly about having an annuity as investment in the PSP?

Don't.

Benefits from an annuity or insurance contract should follow the terms of the plan, which means the plan beneficiary is ultimately the beneficiary of any proceeds. But the annuity beneficiary designation should be the plan (trust), so the plan can receive the proceeds and pay them according to the plan beneficiary designation. There are several reasons for this, one being that the plan terms almost certainly dictate it, but on a practical level, you don't want to have to change the policy beneficiary designation every time a participants changes his or her plan beneficiary.

Despite Bird's excellent explanation -- the above is still the correct answer!

It is also the briefest.