IRS gives rollovers a common form, a five-step standard

Responding to a mandate in section 324 of the SECURE 2.0 Act, the Treasury Department and IRS have published Notice 2026-49, a voluntary common framework for direct rollovers that supplies sample forms and a five-step process for moving money from a retirement plan to an IRA. Groom Law's Benefits Brief walked through the Notice in an August 28 update.

The guidance answers a problem the Government Accountability Office has documented: rollover procedures are whatever each plan administrator and service provider decides they are, and plans' own forms and procedures vary widely and rely heavily on paper documents and checks. The GAO has attributed participant confusion, frustration, and delays to that lack of uniformity, pointing to situations where participants must deliver paper distribution checks to the receiving institution. Administrators already have broad authority to set reasonable procedures and verification requirements, so the Notice arrives as an alternative rather than a mandate: plans may keep their own forms.

The five-step process is organized around five design goals that read like a list of complaints about the current system: protect participants' personal identifying information, require coordination and communication between plans to minimize the participant's burden, use common terms throughout, require plans to ensure the rollover request is legitimate and the information accurate, and rely on electronic transactions to the maximum extent possible. Those goals shift the administrative weight of a rollover away from the participant and onto the institutions on both sides of the transfer.

The process starts with the receiving plan. Step 1 requires the participant to obtain a Rollover Request Form, labeled Form 1, from the receiving plan, complete it, and submit it with a signed Rollover Request Authorization built into the form. The receiving plan tells the participant whether the form is incomplete or whether it cannot accept the rollover, and Step 2 assigns a rollover identification number, or RIN, to the transaction.

Designed to keep Social Security numbers and other sensitive participant information out of the tracking process, the RIN lets the receiving and distributing plans identify a specific rollover transaction without including that information in every communication; the receiving plan then sends a request to the distributing plan. For an industry whose rollover paperwork has long moved by mail, the RIN represents the strongest shift away from paper.

The notice's voluntary status is what fiduciaries will weigh most carefully: nothing compels a plan to drop its own procedures, but an IRS-endorsed process gives fiduciaries a benchmark they did not have before, and benchmarks tend to become standards once a bespoke process produces a lost check or a delayed transfer. Recordkeepers who build their workflows around Form 1, the RIN, and the electronic-first principle will have an easier conversation with plan committees; the ones who stay on proprietary paper will spend the next cycle explaining the difference.

The scope is carefully drawn: direct rollovers among qualified plans, 403(b) plans, governmental 457(b) plans, traditional IRAs, SEPs and SIMPLE IRAs, but explicitly not IRA-to-IRA transfers, so custodians' proprietary transfer systems remain untouched. The IRS has offered a standard for the plan-to-IRA journey, not for movement between accounts at the same custodian.

For advisers and the plan sponsors they work with, the rollover is the moment Washington has chosen to standardize along electronic, privacy-conscious lines, and the paper-check delays the GAO flagged are the clearest evidence of why Treasury moved: a check waiting in the mail is not invested. The Notice does not ban the check, but it gives every receiving plan a better alternative.

The RIN will be the measure in coming quarters: a transaction identifier that strips Social Security numbers out of the rollover chain is a small privacy safeguard in its own right, the kind of design that tends to spread beyond the five-step process that introduced it. The first recordkeeper to put the RIN into production will define what electronic-to-the-maximum-extent means in practice.