Leaderboard

First you have to be very sure about when they are entitled to a distribution - almost any new plan we write will say after the end of the year. If, in the scenario you describe, the person term'd on 2/20/15 and is entitled to an immediate distribution, they would get it based on 12/31/14, the latest val date. (Setting aside issues about contributions during the year, which is why we don't like immediate distributions, especially for pooled plans.) Now, if the participant has a "large" proportion of the plan assets, it might be prudent to declare a special valuation date, in fairness to both the terminating participant and the other participants. And/or, make sure sufficient cash has been set aside to pay him/her, so you don't have to fuss about the earnings or losses on that portion. (Way back when I first started, my boss kind of arbitrarily decided that we would add 6% annualized interest to any such distribution. It seemed fair, but I eventually came to realize that while it might be fair, it wasn't right. Once I started looking to the documents for answers pension life got a lot simpler.)

You still need to review the plan documents and determine who gets full vesting at death: all participants or only employed participants. Like most of the other people commenting I suspect it applies only to employed participants, but you need to check.