We are recordkeeper on a large quarterly-valuated 401(k) Plan that has approx 1000 employment termination distributions per quarter. The terminated participant sends their withdrawal form to us, then we instruct the trustee who to pay, and how much.

Our withdrawal form says that, if the participant is doing a rollover, the rollover must be to another qualified plan or an IRA. We are curious about our duty to make sure the rollover institution is either a qualified plan or an IRA. It is obvious when the rollover institution is, for example, Charles Schwab, or Joe Blow 401(k) Plan, but what about when it is something not obvious like "Golden American" or "Lutheran Brotherhood"? (These are two real-life examples from this quarter.) Do we have a duty to contact the participant or try to investigate this ourselves somehow to make sure these are qualified plans or IRAs?

You would at least have a 5500 coding issue.

I have in the past asked for additional information when the name of the institution was not well known. I also had a distribution issued to a small bank that was handled incorrectly by the bank. They subsequently tried to get out of issuing the 1099R. Quote from the bank "they cashed checks like this all the time."