Thank you, TomD*.
I am positive that all four of the below quoted eligibility criteria apply to our situation. There is even an explicit statement that lump sum payment do not disqualify. I don't think a tax advisor could read this in any other way - so again, thank you!
"A plan is considered an eligible Pennsylvania retirement plan if, at a minimum, the plan has four characteristics:
- The plan is reduced to writing and has been communicated to the participants;
- The plan establishes eligibility requirements for separation of service or a combination of old age or infirmity, and long-continued service;
- The plan provides for payments to be made at regularly recurring intervals after their separation from service by retirement which continues at least until death. An option for a lump sum payments or payments does not disqualify the retirement nature of the plan as long as the other provisions are provided; and
- The plan does not permit the distribution of program benefits to any employee until termination of employment except for incidental disability benefits or the return of the employee’s previously taxed contributions and income or gains if the employee is required to contribute to the pension plan."
