Yes. Congress intended to increase retirement savings through tax deferral and by severely restricting access to tax deferred savings during an employee's working years. By encouraging savings, Congress then mandated that the savings be used during retirement. Accordingly, all plans must begin making distributions by a specified date and once distributions begin, the payment pattern must be designed so that the plan benefits may be paid out during retirement.

To encourage a participant to follow the Congressional policy, a 50% non-deductible excise tax is imposed to the extent of a plan distribution "short fall" - on the excess of the amount which should have been distributed over the amount actually distributed. If, however, the short fall is due to a reasonable error and reasonable steps are taken to remedy the short fall, the excise tax may be waived. But first the excise tax must be paid and a tax return filed to apply for the waiver. Only then will the excise tax paid be refunded.