1099-R for an annuity?

[JButtrick]

A DB plan is terminating and the particpants are being offered either a Lump Sum (which can be paid in cash or rolled over) or an annuity.

If the participant elects a Lump Sum, he gets a 1099-R with either a code 1, 2, 7 or G.

But what if he elects an annuity? My inclination is that he should get a 1099-R with a G, but the I don't see the words "annuity contract" in the code G description.

[Bird]

We had one of these a couple of years ago and I concluded that it was not reportable. It's not a rollover, it's (I think) a qualified plan distributed annuity contract.

[mming]

Couldn't the plan issue a 1099R using either codes 1,2 or 7, with the critical item being the amount reported as taxable? For example, if a plan purchasing an annuity from an insurance company to pay a participant is considered a non-taxable event, the participant would still be the recipient, zero would be shown as taxable, and the insurance company would then issue a 1099R for any taxable amounts or 1035 exchanges made afterwards, even if they're made in the same year as the initial annuity purchase.

[david rigby]

http://www.irs.gov/pub/irs-pdf/i1099r_11.pdf

Is the explanation under "Box 8" on page 12 relevant?

[Bird]

Is the explanation under "Box 8" on page 12 relevant?

I believe the key phrase there is "...part of a lump-sum distribution." But we're talking about a plan-distributed annuity, so no, I don't think it's relevant. (I'm not 100% sure about any of this but am relatively confident, FWIW.)