5-Year Rule

[Randy Watson]

I have a DC plan where benefits are paid in the form of a lump sum distribution. No other distribution options are available. I believe I can apply the 5-year distribution rule in every case where the participant dies prior to receiving benefits, including distributions to the surviving spouse and a designated beneficiary. Is that correct or are these categories entitled to elect the life expectancy option? Some secondary sources seem to suggest that they are entitled to elect the life expectancy option. I can't believe that we would be required to give them the life expectancy option when the only form of distribution under the plan is a lump sum. I was always under the impression that benefits could always be paid out more rapidly than the MRD rules.

[Randy Watson]

I just realized that I should have told you that it's a new plan that we are currently drafting.