Taxation of employee contributions distributed from DB plan

[Guest JSK]

Has anyone struggled with the taxation of employee contributions distributed from a db plan before the participant's annuity starting date?

IRS Notice 87-13, Q&A 11, provides that, in the case of a db plan, you calculate the present value of the participant's accrued benefit using the plan's factors if the plan provides for a "total distribution". Otherwise, you use the factors set forth in Reg Section 20.2031-7.

What does "total distribution" mean? An actuary friend of mine interprets this to mean that the plan provides a lump sum distribution option for the P's entire benefit. What about a lump sum distribution option for a cash out or plan termination? In othere words, could the plan specify that the factors to use under Notice 87-13 are the same as for cash-outs or plan terminations?