Definition
The party responsible for processing distributions from retirement plans and performing any required tax-withholding.
For IRAs and 403(b) plans, the payer is the financial institution which can be a bank, brokerage firm or credit union.
For qualified plans, the payer is the plan administrator or trustee. In some cases, trustees assigns the responsibility of payer to financial institutions.
Referring Cite
IRC § 3405(e) , Temp. Treas. Reg. §35.3405-1T, IRS Instructions for filing form 1099-R
Additional Helpful Information
The plan administrator may pass on the responsibly of paying and withholding to another party, such as a custodian or other financial institution. Treas. Reg. §31.3405(c)-1, Q&A-4, -5.