If a DC plan has transferred MP assets (thereby requiring annuity form of distribution), if a participant requests an annuity is there a requirement in this case for the annuity contract to be held by the plan? I guess I am unclear of the logistics of this type of distribution form. If the contract is held by the participant, then aren't we just really doing a "rollover" to the annuity provider who then provides an annuity contract to the participant? If so, what is the point of saying that the plan must provide for an annuity option?
Thanks!

First, because it is money purchase funds (pension funds) that doesn't necessarily require an annuity form of payment - it may just subject it to QJSA/QOSA requirements, which can be waived with signoff and spousal consent.

But in answer to your question - yes, if there were any required spousal sign-off, then the funds could be rolled over to an IRA with an insurance carrier and annuitized. I suppose that the "advantage" (if there is one) to the plan annuity option is that a participant who isn't financially savvy could rely on the plan for an annuity payment, placing liability on the plan fiduciary rather than on the participant. This is a potential advantage to a participant, but not to the plan sponsor/fidiciary, so I would presume that most small DC plans wouldn't provide it, other than QJSA/QOSA requirements?

Our DC plans don't offer the annuity option, other than QJSA/QOSA.

Sorry to exhume this thread, but something the OP said caught my attention, and I wanted to make sure I was understanding the process.

For DC plans with QJ&SA, we provide them with an estimated annuity calculation based on their age and account balance. If a participant were to ever select this, I'd presume we'd have the broker and plan sponsor select annuity firm AF, and then send AF the check and let AF determine the exact benefit based on rates and circumstances (note that I have never actually seen this happen in 16 years!). At what point is the plan's (more specifically, the plan fiducary's) responsibility over? Do they need to compare insurance companies, review the calculations, etc.?

Thanks.

Yes, buy an annuity for whatever the lump sum will buy. Get at least 2 quotes from sound companies; they'll be pretty close anyway. We actually did one of these early last year.