Normal retirement but Premature Distibution?

[LCP]

I'm having a tough time with a situation where a government employee is able to retire at 53 based on years of service but cashed out his "thrift plan" and is getting a 1099R from with a Code 1.

His pension is being issued with a Code 2 Non-Disability notation.

Could it be the difference between a true normal retirement and an early out program?

[jerome]

Cashing out the thrift plan does not meet any of the exceptions to the 10% penalty.

Taking periodic payments over the life expectancy from the pension plan does meet one of the exceptions.

The thrift plan should have been rolled over into an IRA.