Lump sum death benefits

[Guest Ohio City]

It seems to me somewhat unclear whether the exception to lump sum distributions as set forth in Code Section 432(f)(2)(B) included a lump sum death benefit that is less than $5,000?

[Miner88]

Ohio City,

Did you ever resolve this issue? We have the same question.

[Guest Smash]

I could be confusing this with the single employer rules, but isn't there language in the PPA regs that says something about the restriction not applying if the plan can make the distribution without an election (generally a lump sum distribution that is less than 5K)? I will try to look at this over the weekend to see if I can find it.

I could make the argument that even if it is restricted as a lump sum, it could still be paid in the form of a (very small) annuity).

[Miner88]

My issue is with the exception in 432(f)(2)(B) (relating to distributions of $5,000 or less). The language says the restriction on lump sums "shall not apply to a benefit which under section 411(a)(11) may be immediately distributed without the consent of the participant." The reguations say that the consent requirements of section 411(a)(11) do not apply after the death of the participant. So, since 411(a)(11) does not apply in the case of death benefits, does that mean the exception in 432(f)(2)(B) does not apply to death benefits?

Am I reading into this too much??!!