I have a different take on this.  Provided the church or qualified organization designated that retired ministers are to be provided parsonage, the 1099-R should have Box 2b checked as it is the individual's responsibility to establish the amount of rental value that may be excluded as parsonage pursuant to §107 and §1.107-1.

Retired ministers who do not render any services in exchange for parsonage are not subject to SE-tax on parsonage.  §1402(a)(8) states, in part, the following (emphasis added):  

"an individual who is a duly ordained, commissioned, or licensed minister of a church or a member of a religious order...shall not include in such net earnings from self-employment the rental value of any parsonage or any parsonage allowance (whether or not excludable under section 107) provided after the individual retires, or any other retirement benefit received by such individual from a church plan (as defined in section 414(e)) after the individual retires."

In order to exclude the rental value of parsonage, there does not need to be actual expenditure, for example, if the retired minister owns a home.  According to Pub 517, if you own your home and you receive as part of your salary a housing or rental allowance, the smallest of the following may be excluded from gross income.  In the event the minister owns a home, it may then be necessary to establish what the fair rental value is based on market data:

1. The amount actually used to provide a home;
2. The amount officially designated as a rental allowance; or
3. The fair rental value of the home, including furnishings, utilities, garage, etc.

I would also report the gross amount from Box 1 on Line 4a and the amount net of parsonage excluded on Line 4b (rather than Line 21) of F.1040.