Treasury, IRS Suggest Rules for Quicker Electronic Rollovers
Electronic transfers and standardized forms for moving retirement savings between plans would be encouraged under the proposed regulations.
The guidance, issued in IRS Notice 2026-49 under the SECURE 2.0 Act of 2022, includes standardized forms and procedures for rollovers involving workplace retirement plans and some individual retirement accounts. The goal is to make rollovers faster and more consistent across financial institutions.
Under the proposal, retirement plans would communicate more directly with one another instead of relying on participants to manage much of the process of moving an account themselves. Plan sponsors would be encouraged to use encrypted communications, a unique identification number for each rollover, and electronic fund transfers for moving assets whenever possible.
The changes are aimed in part at reducing the use of paper checks. A 2024 Government Accountability Office report cited by IRS and Treasury found that nearly one-third of participants surveyed received paper checks that they then had to send to their new retirement plan.
If an electronic transfer is not available, the proposed process calls for a check to be made payable to the receiving plan and sent directly there, rather than to the participant.
For now, use of the new forms and procedures would be voluntary. Treasury and the IRS are also considering additional rules that could further restrict paper checks and require electronic transfers when plans have the technology to complete them, according to the notice.
The agencies are accepting public comments on the proposal through October 23.