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There is a lot here and it is difficult to address all the various issues you raised. 1) If the plan is being terminated, you should have been given a lot more than "a page to sign". You should have received a benefit election package which detailed your options on the distribution. Assuming the amount of your lump sum is > $5,000, it would have explained your monthly annuity options, as well as your lump sum option. It should have also provided tax information related to the distribution, and spousal consent forms. 2) You have the right to request a benefit calculation worksheet that details your benefit amount. 3) You have a right to a Summary Plan Description that explains how the the plan works and the benefits are determined. This should also define how any excess assets are allocated. 4) Regarding the allocation of the excess assets, they must be allocated in a non-discriminatory manor. Discrimination in this setting only looks at Highly Compensated Employees (owner) vs. Non-Highly Compensated Employees. (These are defined terms under the law.) Because the testing for a cash balance plan is typically done by looking at the benefits paid at Normal Retirement Age, older people often get more than younger people because younger people have longer for the money to accumulate. Often the allocation is done based on age and compensation. Older & higher paid get more $, younger & lower paid get less $. If you have a 65 year old making $200,000 and a 25 year old making $20,000. The plan can give $50,000 to the 65 year old and $191 to the 25 year old and that would not be discriminatory because each would receive 25% of pay at 65, assuming 8.5% interest. 191 * 1.085 ^ 40 = 5000/20000 = .25 50,000/200,000 = .25. This is just an example to illustrate the point that younger people will likely get less. The actual allocation is often more complex, but this illustrates the method.

If the plan compels an involuntary distribution and you have the estate’s taxpayer identification number, pay the required distribution (as ESOP Guy suggests). If the plan compels an involuntary distribution and you lack information needed for tax-information reporting, consider suggesting that the personal representative seek his or her lawyer’s advice about the representative’s personal liability for the estate’s loss that results from a failure to collect an amount due the estate and for an excise tax that could have been avoided.

Some (but not all) relevant sources include: 26 C.F.R. § 1.72-16 https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFR807fc2326e73cb3/section-1.72-16 including its (b)(1)(ii): “The proceeds of a contract described in subdivision (ii) of this subparagraph will be considered payable indirectly to a participant or beneficiary of such participant where they are payable to the trustee but under the terms of the plan the trustee is required to pay over all of such proceeds to the beneficiary.” and its (c)(2)(ii): “The portion of the proceeds paid upon the death of the insured employee which is equal to the cash value immediately before death is not excludable from gross income under section 101(a). The remaining portion, if any, of the proceeds paid to the beneficiary by reason of the death of the insured employee—that is, the amount in excess of the cash value—constitutes current insurance protection and is excludable under section 101(a).” IRC § 402(c) http://uscode.house.gov/view.xhtml?req=(title:26%20section:402%20edition:prelim)%20OR%20(granuleid:USC-prelim-title26-section402)&f=treesort&edition=prelim&num=0&jumpTo=true 26 C.F.R. § 1.402(c)-2 https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/section-1.402(c)-2 including its Q&A-3(b)(3): “An eligible rollover distribution does not include . . .: [t]he portion of any distribution that is not includible in gross income[.]”

They CAN, but in all likelihood, they WON'T. They will tell you it is CSV, over and over again. Even if you send them RP 2005-25. If only TPAs could bill the true value of their time spent messing around with this stuff...

I guess you are suggesting that this would be a conversion to Roth upon rollover; it's clearly not Roth money to begin with. The answer is that it is not eligible for rollover at all. As Luke Bailey notes, the citations might be tough to run down and connect the dots but I don't think there is any doubt about this.

Ananda, it would take me a while to run down the citations, but I'm pretty sure that the death benefit in excess of cash value is treated as if it were a direct payment from the life insurance company to the beneficiary, not as a qualified plan investment. So in your case that's 100% of the death proceeds, since term. Therefore, except for any post-death interest or earnings on the proceeds while in the plan, the distribution is not really a distribution from the plan that can be rolled over to any IRA. Again, I'm just throwin' this out there because I think that is what you will find if you research it. Maybe others can confirm or deny, or you can research further and tell us what you find.