| Lump-Sum Distribution | |
 A one time payment for the entire amount due, rather than breaking payments into smaller installments. Some lump-sum distributions receive special tax treatment. |
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 A commission check or a pension plan distribution because of the pensioner's death are two examples of lump-sum distributions. In general, distributions from qualified plans are treated as lump-sum, if the following requirements are met: The total plan balance is distributed over the same tax year. The distribution is made as a result of the employee: - attaining age 59 1/2 - being deceased (applicable to beneficiaries) - separates from service (not applicable to self-employed individuals - but applies to their common-law employees) or - being disabled (applicable only to self-employed individuals). The distribution occurs after five years of participation (this requirements is waived for beneficiaries). |
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