participant distribution fees

[Guest Mike Kimball]

I've had a couple people tell me that a distribution fee can't be deducted from a participant's account. This is a minimal processing fee to cover the 1099 and other paperwork associated with the distribution. I've looked at 404© regs and looks to me like it would be OK. Anyone have any specific cites or rulings that would indicate otherwise?

[Wessex]

This topic is discussed on the 401(k) board at "1099R reporting" last updated on 1-26-99 and "Which fees can be charged to participants?" last updated on 1-28-99.