State Taxation of Pension Income Act

[401 Chaos]

Am wondering if anybody has some practical advice for administering plans in light of the State Taxation of Pension Income Act (STPIA) or Pension Source Act, etc. Specifically, small deferred comp plan administrator has distributions that stretch over 10 years and thus are arguably "retirement income" for STPIA purposes. Plan has historically only had a few participants retire and none have relocated. Plan is now facing situation where participant has retired and relocated to a new state that has no income tax. Does the company have to examine the factual situation (e.g., residency, time of move, new state's income tax requirements, etc.) and make a call as to whether or not to withhold and report state income taxes or can the company simply have a policy of withholding and remitting applicable state income taxes to the original source state (and home state of the company) and put burden on participant to seek a refund of those amounts if applicable?