A one-time payment for the entire amount due, rather than breaking payments into smaller installments. Some lump-sum distributions receive special tax treatment.

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:

1. The total plan balance is distributed over the same tax year.

2. The distribution is made as a result of the employee:
- attaining age 59.5
- being deceased (applicable to beneficiaries)
- separating from service (not applicable to self-employed individuals - but applies to their common-law employees) or
- being disabled (applicable only to self-employed individuals).

3. The distribution occurs after five years of participation (this requirements is waived for beneficiaries).