Pre-1987: Your pre-1987 contribution is not rolled over. It is a 100 percent non-taxable distribution paid directly to you.
Post-tax: Your post-tax contribution is rolled over as taxable, even if you have already paid taxes on it (tax basis). That amount is taxable under IRS rules and regulations. The tax will be recovered when you receive your pension from us. Basically, a portion of your pension benefit will be non-taxable until your post-tax contribution has been fully repaid to you. When your post-tax contribution has been fully recovered, the remainder of your benefit will be taxable. The post-tax contribution must be recovered over a set number of monthly payments. The IRS determines the rate of recovery.