That argument makes no sense. The plan making the distribution is not doing it right if there is any significant additional work to the mandatory IRA. We do them all the time (we use Millennial Trust) and the system is pretty much automated. If anything, it might be less work than a cash distribution with withholding. Yes, I think there is a potential problem. However, if the employer is paying the cost (which is almost always the case in our client plans, probably 99% of the time), then who cares?