A large company has a company funded "portable" defined benefit pension plan that allows you to withdraw the full present value for rollover into IRA or 401K if you leave the company. They recently announced that do to underfunding that, on seperation, only 50% can be withdrawn as a lump-sum the other 50% will be paid out as an immediate annuity or can paid out as a deffered annuity at some later year of your choosing ( assuming the company doesn't go bankrupt :).
In this situation, if the immediate annuity option is selected and the recipient is not of retirement age, e.g. in their 30's or 40's, are only normal federal taxes due on the payments, or will federal tax penalties be due also (as they would be for withdrawing early from an IRA or 401K)? - thanks