The IRS recently issued Notice 2026-13 (the “IRS Notice”), modifying two safe harbor explanations that retirement plan sponsors may use for the purpose of providing required 402(f) notices to participants, beneficiaries, and alternate payees regarding eligible rollover distributions from pre-tax and designated Roth accounts. The modifications reflect recent legislative changes, including those under the SECURE 2.0 Act, such as the new distribution exceptions to the 10% additional tax early distribution rule, updates to the required minimum distribution rules, and the increase from $5,000 to $7,000 under the mandatory cashout rule.
Plan sponsors should work with their third party administrators and outside counsel to ensure that these required plan participant notices are updated to reflect these changes.
The IRS Notice is available here.