Buffalo TPA

We only administer a couple of non-governmental 457(b) Plans so i am far from an expert. in one of them a participant will be terminating soon and will be taking a lump sum withdrawal. Since the distribution is reflected on the company W2 should the funds be transferred to the company checking account and then run through payroll OR is it ok that the funds go directly to the participant and then the company just adjusts that person's W2 at the end of the year thanks