Incoming rollover processing - Empower Retirement

1 Incoming rollover processing O V E R V I E W A rollover is a transaction used to transfer eligible assets from one qualified Retirement plan to another. If a plan allows Incoming rollovers , participants may generally contribute a eligible rollover from their previous employer s Retirement plan or from their Individual Retirement Account (IRA) into their current employer s Retirement plan. NOTE: Some 403(b) or 457 plans may allow contract exchanges or plan transfers. For more information on Empower s contract exchange services click the following link: Contract Exchange & Plan Transfer Whitepaper. Additional requirements vary depending on the type of Incoming rollover : Incoming rollover type Description Direct rollover Proceeds are made payable to the receiving institution for the benefit of the participant and sent either directly to the participant or to the receiving institution.

2 Direct rollovers are not considered a taxable event; taxes are not withheld from the rollover amount. Additional requirements apply for Roth-designated rollovers from other qualified plans: The date of the first Roth contribution. Cost basis (the Roth contribution amount, less earnings, that has already been reported as taxable income to the participant). Indirect rollover The distribution from the employer plan or IRA is paid directly to the participant and reported as a taxable distribution. NOTE: Any federal tax withheld from the distribution may be contributed by the participant as part of an indirect rollover . rollover assets must generally be deposited into the receiving plan no later than 60 days after the participant receives the assets from the originating plan or IRA.

3 NOTE: Assets rolled into a plan do not count towards annual IRS contribution limits. Plan provides Incoming rollover approval The plan administrator or TPA: Reviews and either approves or rejects Incoming rollover requests. Obtains missing information or supporting documentation from the participant or the originating plan in order to verify the rollover is an eligible rollover from a qualified source under terms of the plan. Provides approval by signing the completed rollover form. Empower approves Incoming rollovers Empower : Reviews Incoming rollover requests at the direction of the Plan Administrator. Requests missing information or supporting documentation from the participant or the originating plan in order to validate that the rollover is an eligible rollover under the plan s procedures.

4 Additional service fees may apply. How it works Client provides Incoming rollover approval Participant Coordinates the distribution of rollover eligible funds paid from the prior plan or IRA asset custodian. Submits an Incoming rollover /Transfer form to the employer for approval. May contact a Service Center Representative for assistance submitting a paperless Incoming rollover /Transfer request if Empower has agreed to process paperless rollover transactions. NOTE: When Empower agrees to provide asset consolidation services as a service to the plan sponsor, participants may alternatively submit a request to have a dedicated representative call at a convenient time to help move other eligible accounts into their current plan including: Collect required rollover information from the participant.

5 Call the originating institution with the participant to get additional required information. Enter all required information directly into the recordkeeping system for processing . Sends the rollover check from the originating plan or IRA to Empower . Client Reviews the Incoming rollover request. Authorized signer either approves the rollover request or rejects the request. Empower Receives approved Incoming rollover request and the funds from the originating plan or IRA. Processes the rollover proceeds according to the participant s direction. Originating Plan or IRA Provider Issues appropriate tax forms reporting the rollover eligible distribution. FOR ADVISOR/PLAN SPONSOR OR TPA USE ONLY.

6 Not for use with Plan Participants Empower provides Incoming rollover approval services Participant Submits an Incoming rollover /Transfer form to Empower for processing . May contact a Service Center Representative for assistance preparing the Incoming rollover /Transfer form when Empower provides asset consolidation services. Empower Reviews the Incoming rollover request. Processes the rollover proceeds according to the participant s direction. If the request does not meet the plan s rollover requirements, rejects the request and sends explanation for the rejection to the participant. Originating Plan or IRA Provider Issues appropriate tax forms reporting the rollover eligible distribution.

7 The non-discretionary recordkeeping and administrative services described in this Service Overview are general in nature and reflect the standard service offering. Service descriptions are not specific to any plan provision or administration practice. The recordkeeper may agree to provide an alternate service arrangement, as applicable, if separately requested by the Plan Sponsor.