Biz Develop Consultant BJF Posted January 17, 2018 Report Share Posted January 17, 2018 We have a municipal pension plan that requires employees to make mandatory pre-tax contributions to the Plan. If a participant terminates prior to vesting, the mandatory contributions are paid out in the year of separation. I was told the "prior person" said the code on the 1099-R should always be 7 (normal) or 2 (exception), but no explanation was given. In reading the Form 1099-R instructions Code 2 does not seem to apply to this distribution, although intuitively it seems to, i.e. participant was automatically enrolled (mandatory contribution) and is now forced to take the withdrawal. However the section of the Code, 414(w)(1)(B), seems to only address section 401(k) Plan(s) with automatic enrollment. Thoughts? Link to comment Share on other sites More sharing options...
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