Pub 575 does not accurately paraphrase section 402(e)(4)(D) of the tax code which says:
(D)Lump-sum distribution
For purposes of this paragraph—
(i)In general
The term “lump-sum distribution” means the distribution or payment within one taxable year of the recipient of the balance to the credit of an employee which becomes payable to the recipient—
(I)on account of the employee’s death,
(II)after the employee attains age 59½,
(III)on account of the employee’s separation from service, or
(IV)after the employee has become disabled (within the meaning of section 72(m)(7)),
IRS Revenue Ruling 83-57 describes a lump sum distribution. Note that it refers to "the occurrence of certain events," those now enumerated in section 402(e)(4)(D):
A lump-sum distribution within the meaning of section 402(e)(4)(A) of the Code is given special tax treatment. A distribution will be a lump sum distribution within the meaning of section 402(e)(4)(A) if the balance to the credit of an employee becomes payable upon the occurrence of certain events and is distributed or paid within one taxable year of the recipient. One of the events is an employee's separation from service.
Reaching age 59½ is a single event, not a recurring event.
