Prior to the Finance Act 1999, the only option on retirement after taking a tax free lump sum was to purchase an annuity - an income in retirement on which there was a tax liability.
Since then, ARFs are available as an alternative to certain people to either take an income from or once off drawdowns.
However, because people were just leaving the funds within the ARF, Revenue income has reduced. This is probably the main reason why the imputed distribution was introduced.
MMilken is correct in stating that you have always been subject to PAYE on any income/drawdowns from ARFs - it's just from this year you will be taxed even if you don't take any money out.
You may not even have to pay any tax on this if you apply to your local inspector of taxes for a 'tax cert' quoting your QFM's employer tax reference number. You can allocate some of your tax credit/standard rate cut off point to this particular income