IRS and Treasury Issue Guidance to Standardize Retirement Plan Rollovers

In August, the IRS and the Department of the Treasury issued guidance (Notice 2026-49) aimed at simplifying and standardizing the rollover process. The notice provides sample forms for individuals and plan sponsors to use, along with proposed rollover procedures and protocols. The forms cover direct rollovers between two employer retirement plans, from an employer plan to an individual retirement account (IRA), and from an IRA to an employer plan.

To help protect participants’ personally identifiable information, the forms are designed to use encrypted data transmission and a unique rollover identification number (RIN).

What Sponsors Should Know

Use of the sample forms is optional for plan administrators, and plans may modify them as necessary. However, using the forms does not currently provide a safe harbor. The Treasury and the IRS indicate that they will consider providing safe harbors in future guidance.

Rollovers touch participants, recordkeepers, and receiving institutions alike, so process changes are likely to be driven by service providers. Sponsors may wish to ask their recordkeeper whether it intends to adopt the sample forms and how any changes could affect participants who are leaving the plan or rolling assets in.

Sources:

https://www.irs.gov/pub/irs-drop/n-26-49.pdf

https://www.irs.gov/newsroom/treasury-irs-issue-guidance-on-rollovers-between-retirement-plans-and-individual-retirement-accounts

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