"If we want retirement savings to follow the worker, they shouldn't need a GPS, three passwords, and a tax advisor to get there.... Auto portability would work if it were solely within the employer plan ecosystem -- but as it's currently structured, the money must flow through an IRA. For pre-tax money? Not perfect, but manageable. For Roth money? Full stop.... A participant with both types of funds will see some money move. Other money gets stuck. Confusion increases." MORE >>
"[S]ome of the law changes included in the updated safe harbor explanations: [1] The list of distributions that qualify for an exception from the 10% early withdrawal penalty was expanded ... [2] The explanations have been updated for changes in the rules relating to Required Minimum Distributions (RMDs) ... [3] Distributions from governmental plans to eligible retired public safety officers are not includible in gross income if paid by the employee for qualified health insurance premiums for the year.... [4] The explanations now include a description of the special rules and tax treatment of PLESAs." MORE >>
"[T]he prior safe harbor Special Tax Notices outlined in Notice 2020-62 ceased to accurately reflect the applicable law as of August 6, 2020.... [P]lan administrators making eligible rollover distributions on and after August 6, 2020, were already required to update the Special Tax Notices to account for changes in applicable law.... [W]hile the updated Special Tax Notices in Notice 2026-13 are welcomed, the updates should largely reflect language that plan administrators have already been including." MORE >>
"When a transactional mistake is made with retirement plan or IRA assets, there is oftentimes a mechanism to correct the error.... [S]ome transactional mistakes have no corrective steps.... Such missteps can create massive tax bills and result in unintended penalties. Many of these 'fatal errors' involve rollovers.... [1] Non-spouse beneficiary rollovers.... [2] Spousal rollover.... [3] Exceeding the one-rollover-per-year rule. " MORE >>
"The updated models incorporate recent legislative changes ... [and] also include changes intended to make the 402(f) notice clearer and more concise.... Plan administrators may customize the updated models to [1] omit any information that does not apply to the relevant plan and/or [2] provide any additional information so long as the information is consistent with IRS rules." MORE >>
"For the 2025 Form 1040, the IRS has added new lines 4c and 5c, which mostly contain boxes to be checked instead of having to write in a code on the form. Line 4c includes a box for 'Rollover' (Box 1), another for 'QCD' (Box 2), and a blank box (Box 3).... Line 5c includes a box for 'Rollover' (Box 1), another for 'PSO' (Box 2), and a blank box (Box 3). Box 3 should be checked and a word or code should be entered next to Box 3 if another IRS instruction requires it." MORE >>
"The revised special tax notice incorporates wording recommendations in the GAO report. The GAO report took issue with the old version not clarifying to participants that one of their options was to do nothing at all. In other words, participants may leave their balance in the retirement plan. In addition, the GAO report thought it would be clearer and more concise to list the four distribution options in the beginning with a brief description of the corresponding tax consequences. Both of these changes are included in the new IRS templates." MORE >>
"The model notices are deemed to satisfy Code section 402(f) for legal changes through January 15, 2026, and they should be put into use as soon as administratively practicable.... [1] a table of contents has been added (which makes it longer); [2] various new exceptions to the early withdrawal tax are covered, including pension-linked emergency savings accounts and qualified long-term care distributions ... [3] additional references to other IRS publications have been added." MORE >>
"The explanations reflect exceptions to the 10% tax on early distributions added by the SECURE 2.0 Act ... The notices no longer expressly reference the age for determining a participant's required beginning date for RMDs ... An explanation of special rules applicable to individuals receiving payment from a PLESA has been added to the notice for rollovers from designated Roth accounts." MORE >>
"The updated model notices don't reflect SECURE 2.0 changes that haven't taken effect yet, including the law's new Saver's Match contribution and the provision excluding from income certain disability-related payments to first responders (both provisions take effect after 2026). IRS anticipates updating the models again once these provisions take effect." MORE >>
"U.S households moved an estimated $1 trillion in retirement plan rollovers in 2025 ... [O]ne in eight rollover transactions, or 16%, are over $100,000. Rollovers in new employer plans have doubled in dollars terms, at $160 billion today compared to $80 billion in 2022." MORE >>
"This notice provides two safe harbor explanations that plan administrators may use ... to provide certain information to recipients of eligible rollover distributions. One safe harbor explanation is for distributions that are not from a designated Roth account, and the other safe harbor explanation is for distributions from a designated Roth account. These safe harbor explanations modify the two safe harbor explanations provided in Notice 2020-62 ... [to] take into consideration certain legislative changes made by [SECURE 2.0] and implement a recommendation from the U.S. Government Accountability Office (GAO)." MORE >>
"Juggling multiple retirement accounts is an Olympic sport nobody signed up for.... 401(k) plans offer savers benefits that IRAs don't.... currently any Roth money will get stuck in the Roth IRA -- never making it to the new employer plan, crushing the dream of auto-portability, and potentially confusing savers ... So, what's the holdup? Why hasn't this been corrected already?" MORE >>
"Reasons to roll over ... [1] Your plan has high-cost investments.... [2] You have a trail of 401(k) accounts.... [3] You need more bond funds.... [4] You want flexibility for withdrawals.... Stick with the 401(k)? ... [1] You plan to retire early…or late.... [2] You want to invest in a Roth IRA, but you earn too much to contribute.... [3] You worry about the loss of Net Unrealized Appreciation (NUA).... [4] You're worried about lawsuits." MORE >>
"If deciding what to do with an old 401(k) plan has been on your to-do list for a while, here are the key steps you should take to get it done. [1] Check your account value. [2] Determine whether to stay within the 401(k) confines. [3] Assess the quality of your 401(k) options. [4] Find the right IRA provider. [5] Decide whether to convert your traditional 401(k) assets to Roth. [6] Execute. [7] Determine what to invest in." MORE >>
"An increasing number of states are establishing state-sponsored retirement savings programs. Like CalSavers, many programs utilize Roth IRAs as the default retirement account for employees. However, unless legislation is passed to amend the IRC, most employees who participate in these programs will face limited portability of their retirement savings." MORE >>
"28% of rollover investors stayed in cash for at least 12 months, with minimal changes after the first three months following the contribution.... The median job switcher saw a 10% increase in pay, but a 0.7 percentage point DECLINE in their retirement saving rate when they switched employers.... [O]nly an average of 15.3% gained a plan upon job change. while an average of 20% lost access to a plan via work." MORE >>
"To avoid being a landfill where small balances languish, automatic rollover IRAs -- whether 'traditional' or related to auto-portability -- should be evaluated using ... three criteria. These criteria ensure that individuals aren't charged excessive fees, earn a reasonable rate of return and have access to their money and information to make better financial decisions." MORE >>
"By 2030, U.S. retail retirement plan rollovers are expected to reach $1.15 trillion ... That would represent a 34% increase from the estimated $855 billion in retail rollovers expected in 2025 and nearly double the $612 billion in retail rollovers in 2020.... The average size of rollovers for people aged 50 to 74 more than doubled since 2007, increasing from $101,400 to an estimated $220,00[.] " MORE >>
"The Federation of Americans for Consumer Choice [FACC] will appeal a mixed ruling that keeps alive the [DOL's] fleeting attempts to reinterpret fiduciary duty.... [The district court] order vacated specific rollover-related provisions, including the rule allowing a single IRA rollover to be considered the start of an ongoing fiduciary relationship ... [but] did not dismiss the DOL's entire rule." [FACC v. DOL, No. 22-0243 (N.D. Tex. Jul. 9, 2025)] MORE >>
"Roth conversions are taxed as income. Many of the new tax breaks can be lost if taxpayers push their income up too high ... These include the $6,000 tax break for seniors, the increased SALT deduction and the breaks for tips and overtime." MORE >>
"Judge Ed Kinkeade ruled ... against sections in Prohibited Transaction Exemption 2020-02 stating that an advisor could start an 'ongoing advice relationship' with a retirement saver under [ERISA] if the advisor helped the retirement saver with even one retirement savings rollover transaction." [FACC v. DOL, No. 22-0243 (N.D. Tex. Jul. 9, 2025)] MORE >>
"[T]he notion that a rollover recommendation could be viewed as the first in a series of transactions that could constitute a 'regular basis' -- was seen as being beyond the [DOL]'s authority.... [T]his is the second federal court holding that the long-standing assessment of what constitutes a 'regular basis' would be reinstated -- and that while advice to the participant in the plan would continue to carry a fiduciary relationship to a rollover recommendation, a separate rollover recommendation by an advisor without that prior relationship will (still) be a separate matter." [FACC v. DOL, No. 22-0243 (N.D. Tex. Jul. 9, 2025)] MORE >>
"Improving individuals' plan experiences and securing their future financial outcomes is (and should be) one of our industry's top priorities. Currently, their plan experience is negatively impacted by the distribution and rollover process. Their future financial outcome is jeopardized by poor decisions without expert help. Auto-portability has limited application in fixing these critical issues. A better solution is to improve the distribution and rollover process through standardization and automation." MORE >>
"When a 401(k) account contains both pre-tax and after-tax amounts, the owner can’t later move the after-tax dollars to a Roth IRA or move the pre-tax dollars to a traditional IRA and leave the after-tax dollars alone. Any distribution from the account must contain both pre-tax and after-tax dollars in proportionate shares." MORE >>
