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Interesting, Bill.... We must be working in different 401(k) industries! (Sorry - I couldn't resist). I'd be interested in hearing more details on your experiences with regard to this. My current employer (a large mutual fund provider of 401(k) services) doesn't charge fees like this - on the basis of my conclusion (after discussing it with the DOL) that it would be inappropriate (even using your analysis that these distributions were "voluntary"). My former employer (a large bank provider of 401(k) services) used to charge distribution fees on "voluntary" distributions, but was stopped (and ordered to issue refunds) when audited by the DOL....

How would you think the DOL would react to charging fees on "cash outs" (under $5000 distributions, which clearly aren't voluntary. Do you think the provider could charge different fees for those who take checks, as opposed to a wire transfer to a rollover? Or even waive the fee if the rollover were into one of the service provider's own IRA products?

Most of the larger providers (where I know a fair number of the players - it is, after all, a small fraternity) also don't charge a distribution fee. It really isn't worth it (its a rather nominal source of revenue for something which is routing, and highly automated these days), and the costs of cutting checks, etc. are typically bundled in and part of the pricing model used to set the fees for any given plan.

Michael

p.s. frum won bed speler to anuder, your fergiven.....
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