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to petitioner in March 1990.
Petitioner did not ultimately roll over the Transfer Refund
into either an individual retirement account or an individual
retirement annuity.6
At the time that petitioner transferred from the Retirement
System to the Pension System, he had attained the age of 57. If
petitioner had not transferred to the Pension System but had
remained a member of the Retirement System, he would have been
entitled to retire and receive a normal service retirement
benefit, including a regular monthly annuity, under the
Retirement System. He would not have been entitled to receive a
Transfer Refund, however, because a Transfer Refund is payable
only as a consequence of transferring from the Retirement System
to the Pension System.
Also as a consequence of transferring from the Retirement
System to the Pension System, petitioner became a member of the
Pension System. As a member of the Pension System, petitioner
became entitled to receive a retirement benefit based upon his
salary and his creditable years of service, specifically
including those years of creditable service recognized under the
6 Petitioner initially rolled over the Transfer Refund into
an individual retirement account. Thereafter, in July 1990, the
Internal Revenue Service ruled that a transfer refund
distribution did not qualify for rollover treatment. Upon
learning of the ruling, petitioner withdrew the Transfer Refund
from his IRA and invested it elsewhere. As discussed infra,
petitioner reported the Transfer Refund as ordinary income on his
1990 Federal income tax return.
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