Retirement income and "other income" are taxed the same. So, he could report it on line 21 as "Other income in box 3 of a 1099-Misc" to avoid an IRS inquiry.
I have seen this before, too, but only recently. I'm curious as to how a company sophisticated enough have a retirement plan doesn't know which form to use! One common situation, I've seen, is "retirement supplement" income, such as when the former employer provides additional money to help with health insurance. All the other answers suggest entering it as other income
