Installment Payments Upon Plan Termination

Hello, 

Money purchase pension plan with an anticipated termination date in the coming months. Sole participant is taking installment payments in the amount of annual RMDs. Duration of installments is likely to blow the ability for the participant to make an eligible rollover. As a result, participant looking to take remaining installment payments in a lump sum upon plan termination. QJSA rules do not apply to the distribution. This shouldn't be a cutback issue because the plan is not removing an optional form of benefit; instead, the participant in pay status is merely wanting to change the form of distribution. The plan does not prohibit this, and the participant election to take installment distributions did not say the election was irrevocable.

I know this issue has been dealt with in some fashion on the defined benefit side, but what about on the money purchase/defined contribution side? Can someone point me in the direction of authority for whether changing installment payments to a lump sum upon termination is prohibited or allowed? I am at a loss. 

Thanks in advance.

Were the (so-called) installment payments elected irrevocably? I'm not really sure what to make of this; if we have RMDs we pay them one at a time and don't call them installment payments.  Also not sure how a MP plan would not be subject to QJSA rules.

The distributions were not elected irrevocably. Agreed about not knowing what to think of this--I am trying to clean up this plan and terminate it for the sole participant. By QJSA not applying, I mean that the participant's spouse will consent to waive QJSA, so I am in the world of installment payments (the previously taken RMDs) and lump sum distributions. Sorry for the curveball--I wouldn't have come here if it were straightforward. Thanks!

Does the plan document have language authorizing a LS upon plan termination?  Or could it be amended so?

Yes, the plan document contains lump sum plan termination distribution language.

Maybe its me, but if the installment payments were not irrevocable then they're not really installment payments.  What is the duration of the installment payments that is problematic?

Or are we talking about someone who started taking distributions before age 59 1/2 and did installments to avoid the premature distribution penalty?

Bird, I think the issue that the on going plan has no problem making installment payments but a terminated plan dissolving the trust isn't sure how it's going to pay out installment payments and may be having trouble finding someone who can.

16 hours ago, Lou S. said:

Bird, I think the issue that the on going plan has no problem making installment payments but a terminated plan dissolving the trust isn't sure how it's going to pay out installment payments and may be having trouble finding someone who can.

What is an installment payment if it is not irrevocable? Isn't it just a payment? Maybe I'm being dense but I don't understand this at all.