Final Final Regulations - Variable Annuity Contracts

[DTH]

I'm wondering if 1.401(a)(9)-6, Q&A 12 applies in this scenario. A DC plan uses a variable annuity contract and is considered an individual account plan that is annuitized. The contract provides for a stepped-up death benefit where a designated beneficiary will receive the greater of:

1. the participant's vested account balance

2. the participant's remaining principal (contributions - distributions)

3. the maximum anniversary value (anniversary value for each anniversary of the deceased participant's birthday prior to the participant attaining a specified age)

It appears that the contract is guaranteeing that there will be no loss of remaining principal. Has the benefit already accrued or is making up for a loss an additional accrual, thus Q&A 12 applies.

Thanks!