Q&A 7 and 8 of 98-1 only reference the age-adjusted dollar limit and the high 3-year average pay in determining the 415(B) maximum benefit, and the maximum lump sum in Q&A 9. Does this mean that a participant whose high 3-year average is less than $10,000 but whose plan benefit is the $10,000 minimum of 415(B)(4) can only be paid a lump sum based on his high 3?

IRC 415(B)(1) states the maximum benefit as the lesser of the 100% of high 3 year average or $X (now $160K, indexed). IRC 415(B)(4) states "notwithstanding the preceding provisions of this subsection, the benefits payable... shall be deemed not to exceed the limitations ... if the reitement benefits ... do not exceed $10,000..."

Note that
- "subsection" refers to 415(B),
- the $10K is not indexed.

Also note subsection (4)(B): the employer cannot at any time have maintained a DC plan covering this participant.

In other words, you are correct that you cannot take the deminimus benefit as a lump sum without the necessary compensation to support a 415 limit that is greater.