Transferring Payouts to a Third Party

Q. The plan document of a plan that is to be terminated says the plan must continue if amounts that are deferred are not distributed. It also says that vested account balances may be distributed through the purchase of a single premium nontransferable annuity contract. Can the payout and income tax reporting obligation be transferred to a third party which will address the income tax withholding and reporting on a Form 1099-R, not a Form W-2? 

A. Given the language in the document, it is reasonable to assume that allowing a third party to hold and eventually distribute the annuity will work. If the document was written by an attorney who deals in 457(f) plans, then following such a course of action may be reasonable. So is reporting on a Form 1099R, since there would no longer be an employer to report on a W-2.