BENEFITS DIGEST

Angela Stockbridge gets specific about the new correction program, which replaced its predecessor immediately on October 22. Her walkthrough covers the conditions for fixing eligible inadvertent failures, the correction window running to the later of the third plan-year end or 18 months after identification, and the need to document discovery and correction before an IRS examination begins. Employer-eligibility failures require stopping contributions within six months, overpayment relief carries exceptions including a $250 threshold and rollover notices, and she describes a 12-month window that applies to certain matching-contribution corrections. The separate IRA correction program opens May 1, 2027, and the earnings-floor idea tied to the Labor Department’s online calculator remains a proposal, not a current rule.

NAPA details the IRA side of the October 22 correction guidance. The new IRA program opens May 1, 2027 with corrections limited at launch to four categories. Three cover service-provider errors, a missed required minimum distribution, the wrong type of account opened, and a distribution or transfer that mishandles an inherited IRA for a nonspouse beneficiary. The fourth covers a 60-day rollover that missed its window where denying a waiver would offend equity or good conscience, including events beyond the individual’s reasonable control. Applications are filed through Pay.gov with a $3,500 fee for single filings before 2028. Rollover-deadline waivers transition out of individual IRS ruling requests, with both routes open during 2027, while the free automatic-waiver and self-certification routes stay available. Self-correction isn’t part of the IRA program at launch, and comments on both revenue procedures are due January 20, 2027.

Morgan Lewis separates what changed immediately from what arrives later in the October 22 corrections guidance. The updated Employee Plans Compliance Resolution System, the IRS program for correcting retirement-plan errors, took effect on issuance, while the IRA correction program opens May 1, 2027 and runs on applications rather than self-correction. The firm also walks through the transition for 60-day rollover-waiver requests, which move out of requests for individual IRS rulings and into the new IRA program. Sponsors and IRA custodians get a map of which procedure now governs which mistake.

Sponsors correcting certain automatic-enrollment mistakes get more time to restore missed employer matches under the [updated retirement plan correction procedure](https://www.irs.gov/pub/irs-drop/rp-26-34.pdf). The period deemed reasonable for those corrective matches increases from 6 months to 12 months after the month correct deferrals begin. The October 22 update also incorporates SECURE 2.0’s broader self-correction rules and its treatment of inadvertent overpayments, with exceptions and safeguards that still need to be checked for each error. Separately, the [new IRA correction procedure](https://www.irs.gov/pub/irs-drop/rp-26-33.pdf) opens May 1, 2027 for four specified types of failure, including certain missed required minimum distributions and rollover errors. That program requires an IRS application, generally with a $3,500 fee. Comments on both procedures are due January 20, 2027.

Moving a former employee’s small balance out of a retirement plan doesn’t ensure it will keep growing. PensionBee reports that 68% of automatic-rollover IRA holders lost value in the first year and 39% remained below their starting balance after eight years. Its $43 billion figure is a projection for 2030, not the amount currently held. PensionBee sells account consolidation, so its research comes with a commercial interest. The findings nevertheless put a concrete question before sponsors choosing a rollover provider. What happens to the balance after the transfer?

Mercer’s Brian Kearney and Margaret Berger walk through the IRS’s four proposed sample forms and five-step process for plan-to-plan rollovers, a workflow that today runs on plan-by-plan paperwork and phone trees. The proposed process starts with the participant contacting the receiving plan and encourages the two plans to communicate directly and move the money electronically. The forms are optional, and using them does not itself provide special protection against a finding of noncompliance. Existing spousal-consent and rollover-notice requirements still apply.

Morgan Lewis notes the PBGC’s October 14 announcement that 2027 premiums for multiemployer pension plans will be a flat $42 per participant, a $2 increase from 2026 and 40% above the level of a decade ago. The firm’s practical points are keeping participant records accurate and identifying deceased participants, which help prevent inflated premium counts, while permissible small-balance cash-outs can reduce the number of participants counted.

Panelists in this installment treat retirement income as a governance decision rather than a product purchase, distinguishing investments that can support optional income elections from products that lock participants into an annuity. Fees, access, portability, and participant understanding all enter the evaluation. The speakers are vendors and consultants with offerings in the space, and their framings carry that interest.

Empower’s research describes savings scattered across prior-employer plans as workers change jobs, with roughly one-third of respondents reporting they may have lost track of a retirement account and 57% saying complexity has led them to delay action. The recommended fixes are practical, clearer information at job transitions and human help when participants ask for it. The figures are survey self-reports rather than verified counts of lost accounts, and the findings arrive as the industry builds out auto-portability infrastructure aimed at the same problem.

Bricker Graydon Wyatt explains how a policy that lets employees choose between cashing out PTO and keeping it can trigger constructive receipt, taxing employees on leave they retained because they could have taken cash. The firm points to IRS rulings allowing employees to make an irrevocable cash-out election before the year they earn the leave. Those rulings apply only to the taxpayers who requested them, so they do not give every employer blanket approval for that approach. State law also constrains some designs. The distinction that matters is between elective cash-outs, which raise the issue, and automatic ones, which generally do not.

Haynes Boone walks employers through contributing to Trump Accounts, which the firm describes as traditional IRAs for children under 18 that took effect earlier this year. Ordinary contributions, including qualifying employer contributions, share a $5,000 annual limit per child, with certain government, qualified general and rollover contributions excluded, and an employer program may contribute up to $2,500 per employee, counted within that shared limit rather than on top of it. Qualifying employer contributions are exempt from federal income tax but not from the employer’s Social Security and unemployment payroll taxes, and the firm describes the written-program and nondiscrimination requirements along with open administrative questions. These are accounts for employees’ children, not a new retirement account every adult employee can open, and the analysis is the firm’s reading of the underlying guidance.

October Three reviews three bills House Democrats introduced on October 1. The Employee and Retiree Access to Justice Act would replace deferential review of benefit denials with fresh judicial review and restrict arbitration. The Protecting Workers’ Benefits Act would let defined benefit participants sue on a plan’s behalf and receive a litigation incentive of 0.5% to 1.0% of the amount recovered. The Workers’ Retirement Savings Protection Act would broaden fiduciary investment advice, including rollover advice. October Three sees little near-term prospect of enactment, and the bills create no current duties.

Cerulli reports that participants who interacted with their recordkeeper’s representatives were markedly more likely to rate their satisfaction nine or ten, 46% versus 28%, and to report high retirement confidence, 35% versus 23%. Only about a third had any such contact in the past year. The differences are associations rather than proof that advice caused them, and sponsors weighing recordkeeper advice programs still need to oversee the rollover conflicts that can come with them.

Participants may trust their employer’s retirement plan without wanting to leave their money there forever. An Allspring and Defined Contribution Institutional Investment Association survey of more than 1,500 respondents found that nearly a third wanted guaranteed income benefits in their workplace plan, while 70 percent placed greater importance on access and control. Adviser use increased sharply as retirement approached, and participants working with advisers were more likely to move assets out of the plan. Allspring’s analysis urges sponsors to think explicitly about whether they want to retain retirees’ assets or help participants move into another arrangement. Low fees, useful guidance and a range of income options matter to that choice. The survey describes competing participant preferences; it doesn’t establish that an in-plan annuity or a rollover is the right answer for everyone.

December 31, 2026 is an important retirement plan amendment deadline, but it isn’t the deadline for every change. Segal explains which amendments are due this year, which follow the IRS’s separate timetable for individually designed plans, and which qualify for later deadlines. The year-end date applies to non-governmental single-employer plans, including 403(b) plans not maintained by public schools, while collectively bargained plans have until the end of 2028 and governmental plans until the end of 2029. The date matters most for the long list of discretionary features that trigger amendments only if a plan has adopted them, such as in-service distributions at 59½, emergency savings accounts, Roth treatment of employer contributions, the $7,000 cash-out limit, student loan matching and hardship self-certification. Extra time to amend the paperwork didn’t give plans extra time to follow the law. The amendments must reflect when each provision actually took effect for the plan.

Comments closed October 5 on Notice 2026-48, the IRS’s framework for delivering the Saver’s Match, the Treasury-funded 50 percent match on the first $2,000 of retirement savings that replaces the Saver’s Credit, with deposits starting in 2028 for 2027 contributions. ERIC backs the registration path, which moves the money into a worker’s plan as an ordinary rollover, arguing it lets workers benefit without forcing plans to build new tracking systems or send employee data to the government, and it warns against an automatic match path that could require real-time eligibility feeds to the IRS. NAGDCA supports a conduit IRA, asks for clear Roth-conversion procedures without withholding at conversion, and wants final regulations promptly plus good-faith transition relief. The IRS has confirmed that plans won’t be required to accept the contributions at all, which may become its own design question for sponsors.

Democrats on House Education and Workforce introduced a three-bill retirement package. The Workers’ Retirement Savings Protection Act from Ranking Member Bobby Scott would extend ERISA fiduciary status to one-time advice, including rollover recommendations, reviving concepts from the vacated Retirement Security Rule in statutory form. The Employee and Retiree Access to Justice Act from Rep. DeSaulnier and Sen. Smith would make forced arbitration clauses, class action waivers and representation waivers unenforceable whether signed before or after a dispute, and would ban discretionary clauses outside multiemployer plans so benefit denials get a fresh look in court. The Protecting Workers’ Benefits Act would treat litigation recoveries as plan assets, add a participant incentive award of 0.5 to 1 percent of any recovery, and require consolidation of duplicative suits. The bills lay out House Democrats’ priorities, though their prospects in the current Congress are uncertain.

In Creason v. Elanco US Inc., a June decision of first impression under Indiana law, the Seventh Circuit held that an employee who accepts a roughly $84 weekly salary reduction in exchange for a fourth week of vacation has made a compensation bargain, not an assignment of wages, so Indiana’s wage-assignment formalities, written disclosures and a right to rescind, never applied. Nothing was withheld and routed to a third party; the agreed salary was simply lower, and the tax treatment matched. The court also enforced the employer’s pandemic-era rollover policy as written. Hours that the policy said would expire rather than pay out were a use-it-or-lose-it benefit, not withheld wages. The drafting lesson travels beyond Indiana. Say clearly what happens to unused time at year-end and at separation.

Fred Barstein argues that guaranteed-income options have struggled to gain ground in 401(k) plans despite 20 years of predictions. Nothing requires them, few sponsors ask for them, and advisers' financial incentives, he argues, can favor rollovers over income products offered inside a plan. He cites T. Rowe Price data that 76 percent of billion-dollar plan sponsors want to retain participant assets while more than 95 percent of smaller plans don't. He predicts adoption will arrive the way target-date funds arrived, through automatic enrollment into a default investment that includes a guaranteed income component, not through persuading participants one at a time.

Ranking Member Bobby Scott is pushing a trio of bills he says belong in any future SECURE 3.0 package. The first would require that one-time retirement advice, including rollover recommendations, be given in the saver's best interest, and would stop advisers from avoiding fiduciary status through fine print saying their advice isn't the main basis for a decision. The second would expand participants' ability to sue over pension-plan mismanagement, responding to the Supreme Court's limits on standing in its 2020 Thole decision. The third, co-sponsored with Rep. Mark DeSaulnier and Sen. Tina Smith, would bar forced arbitration and class action waivers in ERISA plans and would outlaw the plan terms that give claim administrators deferential court review of their own benefit denials. The bills have been introduced but haven't become law. They map where Democrats want the statute to go.

Standardized rollover forms could reduce paperwork, but they will not fix retirement plan transfers on their own, Tom Hawkins argues. He credits Notice 2026-49's four model forms and five-step workflow for attacking the paper-and-fax rollover process, then asks why plan-to-plan transfers stayed broken while securities transfers and payments were automated decades ago. His answer is that portability requires industrywide cooperation no single recordkeeper is paid to build, and that forms alone will not finish the job without shared systems for moving retirement money between providers.

An employee eligible for a distribution from a former employer's employee stock ownership plan can generally roll it into a 403(b) plan, the experts from Groom Law Group and CAPTRUST write, because an ESOP is a qualified plan and its eligible rollover distributions can move into a 403(b) that accepts rollovers under its terms. They add one caution. A distribution that includes employer securities can carry different tax consequences than a cash rollover, so the employee may want tax advice before moving the money. Administrators should check what the plan document actually says about which rollovers it accepts.

The IRS's August rollover guidance is optional today and a signal for tomorrow. Notice 2026-49, issued August 12, offers plans a five-step process and four sample forms for direct rollovers between plans and IRAs, as SECURE 2.0 required. Foley reads the signals in the fine print: future guidance may disallow paper checks, bar demands for Medallion signature guarantees, a bank's stamp vouching for a signature, that stall rollovers today, and let receiving plans "reasonably conclude" a sending plan is qualified, a lighter standard than the 2014 revenue ruling it would relax. Comments are due October 23.

Yes, a 457(b) plan can allow a small-account payout while an employee is still working. Groom and CAPTRUST's experts explain the conditions: the account, not counting rolled-in money, is $7,000 or less; the participant hasn't contributed for two years; and the participant hasn't taken a payout like this before. The plan can allow the participant to request the payout or make it without the participant's consent. Offering the feature is optional.

Several major benefits rules are awaiting White House review, the last stop before publication. EBSA's automatic portability exemption arrived September 14 as a final rule with a statutory deadline. Its PBM fee disclosure transparency rule has been there as a final since July 23. Treasury sent two Trump Accounts rulemakings on September 18, an interim final rule and a companion proposal under new section 530A. And Treasury's final rule on automatic enrollment under section 414A has been in review since June.

New Treasury guidance addresses the Saver's Match, retirement-plan rollovers and employer contributions to Trump Accounts.

After House Democratic leadership built an August 31 press conference around affordability—groceries, gas, healthcare—the Insured Retirement Institute wrote to argue that retirement belongs on the list. The letter distills IRI's broader agenda to four asks: an auto-IRA mandate for employers without plans plus a triennial re-enrollment safe harbor and eligibility at 18; wider guaranteed lifetime income access, including annuities inside QDIAs and expanded QLAC eligibility; collective investment trusts for 403(b) plans; and simplified rollovers with in-service distributions to individual retirement annuities at 50.

A read of the settlement agreement and supporting declaration filed September 3 fills out the picture behind the $5.55 million Russell family settlement reported yesterday. All four settlements in the case, counting the earlier deals with Denise Wyatt, Dennis Long, and Argent Trust, total $14.55 million. The parties had stipulated that the plan's direct losses from the conduct on which the Russells were found liable came to $2,998,716.55, so the family's payment alone runs to nearly twice the stipulated direct loss. The agreement certifies a mandatory non-opt-out class of 394, funds in two equal installments tied to preliminary and final approval, lets class members elect tax-qualified rollovers, and sends any unclaimable residue to a nonprofit rather than back to the defendants. The release reaches the 2016 redemption transaction, the clawback agreement, and the Siemens sale proceeds.

The Retirement Learning Center addresses what happens to outstanding 401(k) loan balances when employees arrive through a merger or acquisition, a recurring administration question in deal integration.

An opinion piece examines how frequent job changes expose participants to what the author calls plan churn, the accumulation of small accounts, cash-outs, and lost momentum that follows each move between employer plans, and argues the problem deserves more attention from plan sponsors and recordkeepers than it gets.

Under current rollover regulations, plan administrators may prescribe any reasonable procedure for a distributee to elect a direct rollover and may impose reasonable requirements for a distributee to provide information or documentation to facilitate the rollover.

Section 324 of the SECURE 2.0 Act directs Treasury to issue sample forms, procedures, and protocols that make rollovers easier to complete and more consistent across plans.

Milliman reviews the IRS's recent communications on direct rollovers for qualified DB and DC plans, with recommendations, procedures, and next steps for plan sponsors.

The IRS recently released Notice 2026-49, proposing sample forms and a standardized five-step process for rollovers to eligible retirement plans under Section 324 of the SECURE 2.0 Act.

New guide addresses a CFP professional’s fiduciary obligations when providing financial advice on whether to roll over assets from an employer plan.

Retirement plan sponsors should be aware of a new rollover process proposed by the IRS pursuant to Notice 2026-49 (the “Notice”) intended to streamline the process of direct rollovers to or from a retirement plan.

With the mandatory Roth catch-up regime live for participants who earned over $150,000 in prior-year FICA wages, Lyndsey Barnett walks through the correction framework when a high earner's catch-up contributions land pre-tax by mistake. Timing matters: errors caught before W-2 filing are fixed by transferring the funds and correcting wage reporting, later discoveries require an in-plan Roth rollover with 2026 errors corrected by December 31, 2027, and no correction is generally required if the erroneous amount is $250 or less.

PLANADVISER's take on Wednesday's rollover guidance, which led yesterday's Digest: electronic transfers and standardized forms for moving retirement savings between plans would be encouraged under the proposed procedures.

A second read on the SECURE 2.0 section 324 rollover package, with attention to the four sample forms and what recordkeepers will need to change to support direct electronic transfers.

NAPA's advisor-facing angle on the same guidance: what standardized rollover procedures would mean for plan-to-plan transfers and the participants who currently abandon rollovers midway.

relevant context for rollover conversations.

and why plan sponsors should treat cross-selling as a fiduciary-oversight item.

Implementing SECURE 2.0 section 324, the IRS proposes four optional sample forms and standardized procedures for rollovers between employer plans or between a plan and an IRA, aiming to replace today's paper-check-and-fax friction with a predictable process. Use of the forms would be optional and no safe harbor attaches yet; comments are due October 23, 2026.

PLANSPONSOR's coverage of Notice 2026-49: new guidance would encourage electronic transfers and standardized forms for moving retirement savings between plans.

Questions of portability and flexibility for both plan sponsors and participants can impede adding guaranteed retirement income offerings.

until now.

Portability Services Network’s Steve Holman separates fact from fiction by addressing five common misconceptions.

The two partners will develop a model that “can serve as a centralized channel for secure data integration and transactions,” to reduce operational hurdles