QJSA exemption and plan requirements

[Guest tcroscut]

Pursuant to IRC 401(a)(11)©, ESOPs are exempt from the QJSA & QPSA requirements if they satisfy the three requirements of 401(a)(11)(B)(iii). One of those requirements is that a participant's vested benefits are payable in full on the death of the participant.

Does that mean that when a participant dies, whether before or after commencement of distributions, that the beneficiary must receive the entire vested amount in one lump sum?

For instance, we have a participant that terminated service with the employer. Before the terminated participant started receiving benefits he died. According to 401(a)(11)(B)(iii) [to maintain QJSA exempt status] do we have to distribute 100% of the participant's vested benefits to the beneficiary in a lump sum, or can the beneficiary receive the benefit over the installment schedule that the participant would have received the benefits? I guess the question is what the term "in full" means?

Any assistance with this would be appreciated! Thanks.