Documents have had an option to have an annuity contract be purchased. These plans do not elect otherwise to have an annuity form of distribution. Is this election option protected under §411(d)(6)? I suspect it is, however, in the final analysis, it seems the same as a lump sum with the Participant buying an annuity. The only difference is that with the option, the Plan would choose the annuity.
I know it can be removed for new Participants. What is the risk for current Participants? Ultimately, IMHO, it's a dumb option.
So my questions are : 1. Is it protected under §411(d)(6)?
2. Does the election serve a positive purpose?