iJoin, PenChecks Automate Force-Out IRA Processing

The firms say it can replace what has traditionally been a tedious, manual process.

iJoin and PenChecks Trust have created an automated, seamless integration to process force-out individual retirement accounts (IRAs) from 401(k)s and other qualified retirement plans.

The automated workflow identifies and confirms potential distribution candidates, performs required address verifications and notification mailings, and sweeps funds to open new force-out IRAs for individuals who did not roll over their balances or request a distribution.

The Employee Retirement Income Security Act (ERISA) provides for a force-out distribution and rollover to an IRA for terminated participants with vested balances of less than $5,000. This has traditionally been a labor-intensive and costly process for recordkeepers, iJoin and PenChecks say, and as a result, many recordkeepers have handled this task less frequently than would be optimal from a workflow or customer service perspective.

The solution is now available for iJoin users with the ACT Module enabled and that use PenChecks to perform distribution processing.

The firms say the more frequent and automated processing on recordkeeping platforms benefits:

  • Employees, who are less likely to become unreachable;
  • Employers, whose human resource (HR) departments will need to respond to fewer inquiries from former employees about reuniting them with their balances; and
  • Recordkeepers, as they replace a traditionally manual process of adjudicating and processing these requests, especially the funding of IRAs for missing participants.

“iJoin and PenChecks are two organizations that exist to innovate to make retirement plans work better for those who benefit by them, as well as those who serve them,” says Steve McCoy, CEO of iJoin. “This integration with PenChecks improves service quality by recordkeepers, while helping them maintain compliant processes and improve internal efficiency.”

PenChecks President and CEO Spiro Preovolos adds: “iJoin’s recordkeeper data integration complements our technology and enables the full automation of the force-out IRA process, from initial screening to new account funding. It’s an important component of evolving internal workflows, and we’re excited to partner with iJoin to bring this to our industry partners.”