Automatic Rollover Employer Requirements | Qualified Retirement Plans

Employer Requirements


The Department of Labor (DOL) provides plan fiduciaries with a Fiduciary Safe Harbor under which the plan sponsor can implement automatic rollovers from their qualified retirement plan by following certain guidelines. If the requirements are met, the plan sponsor can ensure that their fiduciary responsibilities have been satisfied.

The Fiduciary Safe Harbor has five requirements.

  1. The amount of the rollover does not exceed $5,000.
  2. The IRA must be either a trust or custodial IRA. If the IRA is a custodial account, the custodian must be a bank, an insured credit union, or other corporation subject to supervision by the Commissioner of Banking.
  3. There must be a written agreement between the fiduciary and the IRA Provider.
  4. The participants must have been furnished information about the plan's automatic rollover procedures in the Summary Plan Description.
  5. The selection of the IRA may not result in a prohibited transaction.