Withhold Taxes on Death Benefit?

[Fielding Mellish]

Defined benefit plan has a provision that says that if a participant dies before retirement, his/her beneficiary can elect an alternate death benefit instead of a Qualified Pre-Retirement Survivor Annuity.  The alternate death benefit is a lump sum payment of 100% of the contributions made to the Plan on the participant's behalf.

If a beneficiary chooses the alternate death benefit, is the plan's administrator required to withhold any taxes on the payment?  If so, how much?

Thanks.

[CuseFan]

The lump sum death benefit should be the present value of the survivor benefit (or the account balance if a cash balance plan) and has nothing to do with the actual contributions made to the plan to fund the benefit. Generally, the lump sum would be rollover eligible for the beneficiary and if not directly rolled over to an IRA it would be subject to mandatory 20% withholding.