Login | September 09, 2026
Solution coming for 401(k) retirement rollovers
Julie Jason
Published: September 10, 2026
If you have ever had a problem with arranging a 401(k) rollover to an IRA or the 401(k) of a new employer, help is on the way ... finally.
Improvement of the process has been discussed for years. IRS Notice 2026-49 (tinyurl.com/37thus63) cited two Government Accountability Office (GAO) reports. The 2013 GAO report "401(k) Plans: Labor and IRS Could Improve the Rollover Process for Participants" (tinyurl.com/yma264vu) indicated that the "process is inefficient because, lacking uniformity as to what they require to verify and complete rollovers, retirement plans do not have standard rollover procedures," and participants "are frequently burdened with completing the rollover."
The GAO report called for changing Treasury regulations that allow a retirement plan to mail paper checks as part of the process, saying that 1) the check could be lost or misplaced, and 2) the process could take significant time.
The 2024 GAO report "401(k) Plans: Additional Federal Actions Would Help Participants Track and Consolidate Their Retirement Savings" stated that "workers may change jobs up to 10 or more times during a 40-year career and accumulate as many retirement accounts that they would need to track and manage" (tinyurl.com/29vwjpr5).
Thankfully, a change is coming.
The Department of the Treasury and the IRS have released proposed guidance through Notice 2026-49 to simplify and standardize the rollover process using new forms for direct rollovers between retirement plans or between a retirement plan and an IRA.
The impetus for this action is the 2022 SECURE 2.0 Act. Section 324 called for the secretary of the Treasury (or the secretary's delegate) to "develop and issue guidance, in the form of sample forms" in order to "simplify, standardize, facilitate, and expedite the completion of rollovers to eligible retirement plans ... and trustee-to-trustee transfers from individual retirement plans" (tinyurl.com/39pnw52a).
The act also stated the forms must be "written in a manner calculated to be understood by the average person."
How will the process work? The proposal lays out five steps:
1. The participant securely submits a rollover request to the receiving plan.
2. The receiving plan in turn securely submits the rollover request and authorization to the distributing plan.
3. The distributing plan verifies the accuracy of the request and securely transmits information about the account to the receiving plan.
4. The receiving plan approves the request and securely transmits the selected transfer method to the distributing plan.
5. The transfer is made.
Notice 2026-49 has examples of the proposed forms, including what information will be required.
The forms will include the creation of a unique "rollover identification number" (RIN), which will be assigned by the receiving plan in step 2 and be part of all communications related to the rollover.
If you ask me, the creation of the RIN is a big deal. That's the glue that holds everything together. You send only one set of documents identified by the RIN to only the new 401(k) (or IRA) that is to receive your old 401(k). The old plan and new plan do the rest. You don't have to get in the middle trying to coordinate the effort.
Note that the forms are not intended to be used for IRA-to-IRA transfers. Notice 2026-49 states that those transfers "usually are completed through the Automated Customer Account Transfer Service," adding that the Financial Industry Regulatory Authority "has created a standard, uniform protocol for electronic transfers via ACATS that all FINRA member organizations must agree to utilize before transferring assets via ACATS."
The Treasury Department and the IRS are "considering additional guidance on rollover procedures." If you want to provide your point of view, send in comments on or before Oct. 23, 2026. They can be submitted electronically at www.Regulations.gov (use "IRS-2026-0100" in the search field to find the notice) or via mail to Internal Revenue Service, Attn: CC:PA:01:PR (Notice 2026-49), Room 5503, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044. The comments will be available for public viewing.
You'll want to keep an eye on this issue as it develops, because you could be the one using, and possibly benefiting from, the proposed system someday.
On another note: Time is running out to apply for this year's 401(k) Champion Competition. See 401kchampion.com for more details.
Seasoned investment counsel (tinyurl.com/52nus8hz) and award-winning columnist and author, Julie Jason, JD, LLM, promotes financial literacy and investor protection. Read her latest book, "The Discerning Investor: Personal Portfolio Management in Retirement for Lawyers (and Their Clients)" (tinyurl.com/4u7h9pjs), published by the American Bar Association. Write to Julie at readers@juliejason.com. While all questions cannot be answered, each email is read and reviewed and can lead to discussion in a future column.
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