IRC 401(a)(9)(B)(II) provides that the 5 year rule applies where the employee dies before the distribution of the employee's interest has begun (no later than December 31st of the fifth year after the calendar year in which the employee died).
IRC 401(a)(9)(H) provides a special rule for "certain defined contribution plans" if an employee dies before the distribution of the employee's entire interest--
"(i) In general. --Except in the case of a beneficiary who is not a designated beneficiary, subparagraph (B)(ii)-- (I) shall be applied by substituting '10 years' for '5 years", and (II) shall apply whether or not distributions of the employee's interests have begun in accordance with subparagraph (A)."
Treasury Regulation Section 1.401(a)(9)-5--
"Required minimum distributions from defined
Q- For required minimum distributions after an employee's death, what is the applicable distribution period?
A-5. (a) Death on or after the employee's required beginning date.... the applicable distribution period ... (is) the longer of -- the remaining life expectancy of the employee's designated beneficiary and the remaining life expectancy of the employee or ... If the employee does not have a designated beneficiary ... the remaining life expectancy of the employee ...
(b) Death before an employee's required beginning date.... the applicable distribution period ... Nonspouse designated beneficiary.... the applicable distribution period measured by the beneficiary's remaining life expectancy is determined using the beneficiary's age ..."
So, a couple of simple questions which
may have simple answers that I am missing:  Is the 5 year rule optional for tax-qualified, employer-sponsored, individual account plans, like the 401(k) plan?  Does the plan have a choice of applying a 5 year or 10 year period?"