If participant qualifies under the plan to do an in-service distribution, can he request that it be done as a direct rollover to his IRA? This would avoid the 20% (plus state tax) withholding on the distribution since he wants to put the money into an IRA anyway. He is under age 70 1/2.

Thanks.

Yes, unless the basis for the in-service distribution is financial hardship under the 401(k) rules.