1099R federal income tax questions

I retired this past summer and began collecting my pension in Sept.  When I entered my W2 my refund was substantial, but as soon as I added my 1099R income my refund was cut by two thirds.  What I don't understand is my 1099R had Federal taxes withdrawn - which I entered into box 4 of the Turbo Tax form for the 1099R data.  So why is this happening?

Thanks,