Help Your Employees Transfer Their Retirement Accounts to a New Entity

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Katie Fleming

Co-founder and COO of Owner Actions

Two professionals talk about how to transfer retirement accounts to a new entity.

Two of the moves you’ll need to take when closing your business are terminating the retirement plans you offer and helping your employees transfer the funds they hold within them. These steps won’t require much effort on your part, but the time you invest in them can help you create a smooth, simple process for everyone involved.

How do I get started?

First, contact your retirement plan provider. Ask about their process for terminating retirement plans, including how much notice you need to give to do so. Our guide, How to Terminate Employee Savings and Benefit Plans, can help you work through this important step.


Next, tell your employees that the retirement plan will be ending. Then, give them a date by which they need to transfer their holdings to a new entity. You can encourage them to talk to an advisor or to browse popular retirement plan providers’ offerings before making a move.

In some cases, your employees won’t need to remove their funds from the retirement plan. Some entities issue checks on the termination date and mail them to your employees’ address of record. Still, your employees might appreciate a reminder that their account will be close and that the withdrawal may be taxable, especially if the funds aren’t deposited into a qualified retirement savings plan within a prescribed period of time (usually 60 days from the date of withdrawal).


How can I help?

You can help your employees with the transition in the following ways:

  • Offer the contact information for your retirement plan provider.
  • Share any forms the retirement plan provider offers for making a withdrawal or transfer.
  • Inform your employees of the date by which they’ll need to withdraw or transfer their funds, and offer reminders when that date approaches.


There are also a few steps you should avoid taking:

  • Don’t recommend a specific firm, plan, or advisor to your employees, who may be able to hold you liable for your recommendation. You can, however, encourage them to seek out advisors, plans, and firms.
  • Don’t try to access or obtain employee account information from the retirement plan advisor. These accounts should be kept confidential.
  • Don’t offer to intervene, complete paperwork, or be the go-between for your employees when working with the retirement plan provider.


What’s next?

For more information on helping your employees working through the closing process, log into your owner’s portal.

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