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T.C. Memo. 1994-633; see Wheeler v. Commissioner, T.C. Memo.
1993-561; see also Sites v. United States, 75 AFTR 2d 95-2504,
95-1 USTC par. 50,280 (D. Md. 1995). Thus, as a consequence of
aggregating the Retirement System and the Pension System, we have
held that a taxpayer's transfer from the Retirement System to the
Pension System allowed the taxpayer to receive the balance to his
or her credit in two parts, an initial single payment (the
Transfer Refund) and a reduced monthly annuity (based on all of
the taxpayer's years of creditable service and on the taxpayer's
salary during those years). Thus, we have held that a Transfer
Refund did not constitute a taxpayer's entire "balance to the
credit" in the Retirement and Pension Systems, and was therefore
not a lump sum distribution within the meaning of section
402(e)(4)(A).
Notwithstanding the foregoing authority, petitioners contend
that petitioner received the balance to her credit when she
received the Transfer Refund. In this regard, petitioners argue
that the Retirement System is a defined benefit plan that
contains a defined contribution component, and that the
Retirement System therefore constitutes a hybrid plan under
section 414(k). Petitioners also argue that petitioner's
mandatory contributions were held in a separate account in the
Annuity Savings Fund and that the Retirement System and Pension
System provided a benefit (the Transfer Refund) based partly on
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