Tax consequences of pre-retirement death benefits.

[jlf]

Assume a non-contributory DB plan. Plan provides for a pre-retirement lump-sum death benefit equal to 3 times annual salary. Is this benefit life insurance proceeds and, therefore, not eligible for rollover treatment or is it a taxable distribution and, therefore, eligible for rollover treatment?

[Wessex]

From the limited information in the message, it would appear that the distribution would not be treated as life insurance proceeds and would be a taxable distribution from a plan. Assuming that the plan is a qualified plan, the distribution would be eligible for rollover if the beneficiary is a surviving spouse except to the extent that any portion would be a RMD. The distribution would not be eligible for rollover if the beneficiary is anyone other than a surviving spouse.