belated pension payout correction

I retired in 2001. At that time, my company offered me either an retirement annuity or a lump sum that I could roll into a TIRA. I chose to roll the lump sum into a TIRA. I turned 70 and a half in 2014 and began taking my required minimum distributions but no more than the minimum. So far so good.

A couple of weeks ago the company sent me a notice that after an audit they found that they had under paid my retirement payout. I was due an additional $ 28K and I could either be sent a check (minus withholding) or roll the money into an IRA. I rolled it into my TIRA.

Now I’m wondering what IRS consequences this may have since in retrospect, had I received the additional $28K in 2001, I would have had higher RMDS in the past 3-4 years. What are your thoughts?



When I started reading this, I thought you were going to say that they overpaid you and wanted money back. That would have created a technical mess, but in this case you have nothing to worry about. You are only expected to take RMDs based on an account balance that you have at the end of each year.  Your Form 5498 year end IRA values will not be corrected, and the plan does not file a Form 5498 or similar with the IRS. They are not saying whether the “audit” was internal or hired, or was an IRS audit. And they are not about to divulge the details, but if it was an IRS audit, they may have owe the IRS a penalty of some sort. Therefore, I would ignore all this and just complete your RMDs going forward. They will be higher due to the additional 28k balance, so the IRS will eventually get their tax revenue, but not as soon as they would have had they not made this error.

Add new comment

Log in or register to post comments