My wife and I both receive government pensions. My wife receives a Civil Service pension from the Office of Personnel Management (OPM). OPM refers to the Civil Service pension as an Annuity, but there is actually no fund saved somewhere in my wife's name. OPM does keep track of the amount each civil servant has contributed to retirement during their career, and it may or may not also keep track of amounts that the employing agency contributed, but those amounts do not define an amount the retiree draws from during retirement. In fact, each year the retirement payment is adjusted (ordinarily upward) by an amount called the Cost of Living Allowance (COLA). If there actually were a specific fund for each retiree, the amount of such fund would need to be raised to accommodate the higher retiree payment each time a COLA is announced. The OPM does not identify an amount of any retiree's "Annuity." TurboTax asks how much of the pension amount received was a Minimum Required Distribution (MRD). Since the value of one's "Annuity" on December 31st of the prior year is unknown, it is not possible to calculate a resulting MRD. In my case, I receive Military Retired Pay. The government does not associate Military Retired Pay with any sort of retirement deposit account or fund but pays it directly from current year appropriations. There being no "account value" as of December 31st of the prior year, the standard formula would yield an MRD of zero. On the other hand, It seems IRS would take a dim view of my assertion that part of the pension I received was my MRD but that its value was zero. I both of our cases, then, it seems that the only conclusion is that the entire year's pension was our MRD. According to the formula that would mean that the implied "end-year value" of each "presumed annuity" was at least 9 times and perhaps as much as 25 times the size of each of our year's pensions, depending upon our age.
So how should I answer the questions concerning MRD treatment of each pension?
