Safe Harbor IRA Frequently Asked Questions
- What is a Safe Harbor IRA?
- I did not request that a Safe Harbor IRA be opened for me, why did this happen?
- Will I receive something from Principal Bank notifying me about my Safe Harbor IRA?
- How do I withdraw my funds from the Safe Harbor IRA?
- How can I obtain these documents?
- I was told I need to complete an Affidavit of Identity. Why is that?
- Why did I receive both a Safe Harbor IRA signature card and an Affidavit of Identity?
- What is the Safe Harbor IRA signature card?
- Will I have the same beneficiaries as I did with my employer sponsored plan?
- What do I need to fill out on the Safe Harbor IRA signature card?
- What is a W-9 and why do I need to complete one?
- I want to transfer my Safe Harbor IRA to another financial institution. How do I accomplish this?
- What other investment options does Principal Bank offer for the funds in my Safe Harbor IRA?
- I want to rollover my Safe Harbor IRA to my new employer-sponsored plan. How do I accomplish this?
- It allows you to acknowledge and accept ownership of the account, including acceptance of the account Terms and Conditions (PDF: 199 KB)
- It allows you to certify your Taxpayer Identification Number (Social Security number), both of which are necessary before transfers, rollovers or distributions can occur.
- Please fill out Section 3 - Beneficiary Designation (if applicable, see Will I have the same beneficiaries as I did with my employer sponsored plan).
- Please write your Social Security Number in Section 4 - Certification and Signature. A line has been designated specifically for this information. Failure to enter your Social Security Number on this line could delay the processing of transactions on your account.
- Please sign the last page of the signature card, also located in Section 4.
What is a Safe Harbor IRA?
The Principal Bank Safe Harbor Individual Retirement Account (IRA) is a qualified retirement account that is established for individuals who leave an employer without making an election of benefits for funds in an employer-sponsored retirement plan. Funds in your Safe Harbor IRA are protected by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per depositor.
I did not request that a Safe Harbor IRA be opened for me, why did this happen?
The law now requires that retirement plan mandatory distributions of $1000 or more be automatically rolled into an IRA instead of being paid in cash, unless the participant elects otherwise. So if you recently left an employer and did not make an election for the funds left in your employer-sponsored retirement plan, they were moved into a Principal Bank Safe Harbor IRA on your behalf.
Will I receive something from Principal Bank notifying me about my Safe Harbor IRA?
Yes, a Welcome Kit was sent to the address we have on file for you once the account was opened. This Welcome Kit contains the following - a Safe Harbor IRA Signature card, a Welcome letter and a Safe Harbor IRA receipt.
How do I withdraw my funds from the Safe Harbor IRA?
Please sign and return the Safe Harbor IRA signature card along with a completed IRA distribution form.
How can I obtain these documents?
You can access them and print them from the Safe Harbor IRA forms page, or you may contact a Personal Banker 24 hours a day, 7 days a week at 800.672.3343. The forms can be mailed, faxed or emailed to you.
I was told I need to complete an Affidavit of Identity. Why is that?
Safe Harbor IRAs are opened without the required customer information verifications that are standard for other types of accounts. To ensure that we are dealing with the true owner of the account, Principal Bank has an automated verification process for all new Safe Harbor IRAs. If the information provided by you does not match the information we have on file, you will not pass our Customer Identification Process. If that occurs, an Affidavit of Identity is required to guarantee we are dealing with the true account owner.
NOTE: The Affidavit of Identity will need to be notarized.
Why did I receive both a Safe Harbor IRA signature card and an Affidavit of Identity?
In many cases, the Affidavit of Identity will not be required. To minimize the delays in processing transactions on your account, we will usually send an Affidavit of Identity with all replacement signature cards. This will ensure we have the necessary information for your Safe Harbor IRA.
What is the Safe Harbor IRA signature card?
The Safe Harbor IRA signature card serves two purposes:
Will I have the same beneficiaries as I did with my employer sponsored plan?
No. Since the Safe Harbor IRA is a completely separate qualified plan from your original employer-sponsored plan, you will need to designate new beneficiaries. This designation of beneficiaries can be done with the Safe Harbor IRA signature card or you may obtain an IRA Designation or Change of Beneficiary Form from Principal Bank's website. The form is located under Forms Library/IRA Forms (including Safe Harbor).
NOTE: If there is no beneficiary designation on file at the time of your death, or if none of the beneficiaries on file are living at the time of your death, your IRA assets will be paid to your estate.
What do I need to fill out on the Safe Harbor IRA signature card?
There are three parts of the signature card that need to be completed:
What is a W-9 and why do I need to complete one?
Form W-9 is the "Request for Taxpayer Identification Number and Certification" form. This form allows you to certify your taxpayer identification number. In most cases, the W-9 is necessary if you forget to write your Social Security Number in section 4 of the signature card (see What do I need to fill out a SAFE Harbor IRA signature card).
I want to transfer my Safe Harbor IRA to another financial institution. How do I accomplish this?
Please contact the receiving institution (your new IRA custodian). They will provide you with the paperwork necessary to transfer the funds to them. Or you may use the IRA distribution form to initiate the transfer of funds to another institution however a Letter of Acceptance from the receiving institution will be required.
What other investment options does Principal Bank offer for the funds in my Safe Harbor IRA?
There are other investment options for the your Safe Harbor IRA such as short term or longer term certificates of deposit. Please contact a Personal Banker at 800.672.3343 for more information.
I want to rollover my Safe Harbor IRA to my new employer-sponsored plan. How do I accomplish this?
You should first consult with your plan administrator to determine if the employer plan will accept additional assets and if the assets that you wish to rollover are eligible. In addition, the employer plan may require that you complete specific paperwork. To request a direct rollover you may complete an IRA distribution form (PDF: 151 KB), and check the box for "Direct Rollover to an employer-sponsored Eligible Retirement Plan". A cashier's check will be made payable to the employer plan. You may direct us to send the check to either you for delivery to your plan sponsor, or directly to the plan sponsor.
