COLA on Comp Limit with a Lump Sum Distribution

[Guest Julie Silverstein]

A participant terminates at age 65 with a high-3 compensation limit of $4,000 per month, obviously well under the dollar limit. Because he is terminated, his $4,000 can be increased with cost of living, say to $4,100. Therefore, his monthly benefit can actually be higher than his actual high-3 year average.

Can this cost-of-living-increased 415(B)(2)(B) amount (eg $4,100) be paid out in the form of a lump sum, or would this only be payable in an annuity form?

Thanks for any input!

[Gary]

It would appear that if the annuity is within the 415 limits, then it could be paid as a lump sum. Although I myself need to do some 415 lump sum work of my own, to be up to speed.