Death benefits in 457b top hat plan

Participant started installment payments in a 457(b) top hat plan (tax exempt employer), and then the participant died.  The beneficiary is asking about options.  Does the beneficiary need to continue the installments (assuming they meet RMD rules)?  or can they choose to take a lump sum distribution.

my concern is the language in Treas Reg 1.457-7(c)(2)(iv) since payments under the ppt's election started.  Thanks!

(iv) Election as to method of payment. An eligible plan of a tax-exempt entity may provide that an election as to the method of payment under the plan may be made at any time prior to the time the amounts are distributed in accordance with the participant or beneficiary's initial or additional election to defer commencement of distributions under paragraph (c)(2)(ii) or (iii) of this section. Where no method of payment is elected, the entire amount deferred will be includible in the gross income of the participant or beneficiary when the amounts first become made available in accordance with a participant's initial or additional elections to defer under paragraphs (c)(2)(ii) and (iii) of this section, unless the eligible plan provides for a default method of payment (in which case amounts are considered made available and taxable when paid under the terms of the default payment schedule). A method of payment means a distribution or a series of periodic distributions commencing on a date determined in accordance with paragraph (c)(2)(ii) or (iii) of this section.

Plum, the plan document should address this. I don't think what the IRS intended is clear under the regulations. They are susceptible of the interpretation that both the participant and the beneficiary have the ability to make an election, since they repeatedly refer to the participant's or beneficiary's having an election, but are also susceptible of the interpretation that the beneficiary has an election only when distributions had not commenced to the participant. The examples in the regulations that follow the section you quote do not contain any examples with beneficiaries. I have seen at least one plan document that states that if the employee has commenced installment distributions before death, those will continue to the beneficiary and he or she has no other option. I've also seen a plan document that gives the beneficiary a new election regarding whatever is left of the participant's account, by saying that the beneficiary will get a lump sum at some date more than 60 days after the date of the participant's death, but can make an election to defer payment or take installments, if exercised more than 60 days before the date when the lump sum would be paid. So I would follow the plan document, which should address one way or the other.