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Safe Harbor & Plan Term IRA Frequently Asked Questions (FAQs)

General

Rollover and Contributions Options

Forms

General

What is a Safe Harbor or Plan Term IRA?

A Safe Harbor IRA is a qualified retirement account, which has been automatically rolled over by your previous retirement plan sponsor (employer) to Principal Bank. This automatic rollover occurs when you left an employer or when an employer terminates a retirement plan (Plan Term IRA) and you did not make an election of benefits for the funds in your employer-sponsored retirement plan.

The Federal Deposit Insurance Corporation (FDIC) protects funds in your Safe Harbor or Plan Term IRA for up to $250,000 per depositor. Principal Bank pays interest on these accounts. The current rate can be found on www.principalbank.com/rates.

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I did not request that a Safe Harbor or Plan Term IRA be opened for me, why did this happen?

The law now requires that retirement plan mandatory distributions of $1,000 or more be automatically rolled into an IRA instead of being paid out in cash, unless you elect otherwise. If you recently left an employer and did not make a decision about what to do with the funds left in your employer-sponsored retirement plan, the funds were moved into a Principal Bank Safe Harbor or Plan Term IRA on your behalf.

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Will I receive something from Principal Bank notifying me about my Safe Harbor or Plan Term IRA?

A Welcome Kit was sent to the address we received from the retirement plan sponsor when the account was opened. This Welcome Kit contains account information as well as instructions for validating your identity.

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Are there any bank fees?

A $15 annual fee per IRA plan is charged. Additional fees may apply. See Terms and Conditions/Required Disclosures/Fee (PDF: 195 KB) for more information.

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My previous employer says my money has transferred to Principal Bank; however I didn't receive a Welcome Kit in the mail from Principal Bank. What should I do?

Even if you have not yet received your Welcome Kit from Principal Bank, we can still validate your identity and confirm your account is at Principal Bank. To validate your identity, go to principalbank.com/myIRA. On this website you will:

  • Enter personal information so we can validate your identity.
  • Consent to electronic delivery of disclosures.
  • Accept the Terms and Conditions/Required Disclosures/Fees associated with the account.

After completing this process, you will have access to your account.

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Why do I need to confirm my identity on the Principal Bank website?

Your IRA was originally established for you by your previous retirement plan sponsor (employer) because you did not make an election for your retirement assets at the time when you either experienced a job change or were part of a plan termination.

To open this account, we relied upon information about you that was provided by your previous plan sponsor. In order for us to accept any direction from you now, we must first confirm your identity and complete the process of opening the account. This process satisfies our legal requirement under the USA PATRIOT Act and the Bank Secrecy Act, which mandates that we are able to confirm the identity of our customers.

By doing this you are confirming your identity and simply acknowledging the terms of the IRA, and recognizing Principal Bank as the custodian of the account.

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Rollover and Contributions Options

What options do I have regarding my Safe Harbor or Plan Term IRA?

Principal Bank provides a few options on how to handle your Safe Harbor or Plan Term IRA:

  • Maintain your IRA with Principal Bank:
    • Convert your Safe Harbor IRA or Plan Term IRA into a Traditional or Roth IRA:
      • IRA Certificates of Deposit
      • IRA Money Market Account

    Please contact one of our Personal Banker at 1-800-672-3343 to obtain additional information and the necessary forms to convert your current account into a Certificate of Deposit (CD) or Money Market IRA.

  • Transfer funds to another financial institution:
    • We suggest contacting your financial institution so you may comply with their process.
    • Go to principalbank.com/myIRA to complete our web-based identity confirmation process.
    • After your identity is confirmed, to access distributions forms, go to the Account Login box in the upper left of the screen and select "Personal" from the drop-down menu to login to your account.
    • Once you've logged in, go to the Account Summary for your account and click "More Services" in the left navigation.

  • Rollover your funds to your current employer-sponsored retirement plan:
    • 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.
    • Go to principalbank.com/myIRA to complete our web-based identity confirmation process.
    • After your identity is confirmed, to access distributions forms, go to the Account Login box in the upper left of the screen and select "Personal" from the drop-down menu to login to your account.
    • Once you have logged in, go to the Account Summary for your account and click "More Services" in the left navigation. Be sure to check the box for "Direct Rollover to an employer-sponsored plan".

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Can I make additional deposits into this account?

Yes! If you have not confirmed your identity, go to principalbank.com/myIRA to complete our web-based identity confirmation process.

After your identity is confirmed, to access contribution forms, go to the Account Login box in the upper left of the screen and select "Personal" from the drop-down menu to login to your account.

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How do I withdraw some or all of my funds from the Safe Harbor or Plan Term IRA?

After your identity is confirmed, to access distributions forms, go to the Account Login box in the upper left of the screen and select "Personal" from the drop-down menu to login to your account.

Once you've logged in, go to the Account Summary for your account and click "More Services" in the left navigation.

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Forms

Why did I receive both a signature card and an Affidavit of Identity in the mail?

If you have received an Affidavit of Identity in the mail from Principal Bank, it most likely means that we were unable to verify your identity through the online process. To minimize the delays in processing transactions on your account, we ask that you complete the forms as the instructions describe and return them to Principal Bank. This will ensure we have the necessary information for your Safe Harbor or Plan Term IRA.

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I was told I need to complete an Affidavit of Identity. Why is that?

If the information provided by you on the website 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 confirm you are the true account owner.
Note: The Affidavit of Identity will need to be notarized.

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What is a W-8BEN and why do I need to complete this?

Form W-8BEN is the "Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding". This form is required if during the account authentication process you selected either "Non-resident alien" or "Foreign" under the "US Citizenship" question on our website.

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Will I have the same beneficiaries as I did with my employer sponsored plan?

No. You will need to designate new beneficiaries since the Safe Harbor or Plan Term IRA is a completely separate tax-advantaged plan from your original employer-sponsored plan. This designation of beneficiaries can be done with an IRA Designation or Change of Beneficiary Form. This form is available by logging into our secure website.
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.

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If you have other questions, please call us Monday through Friday, at 1.877.884.7236.

Related Links

Safe Harbor IRA Information
Learn about Safe Harbor IRAs: what they are, how they work, and more.

Go to Safe Harbor IRA Information

Have a question?
Contact a bank customer service representative at 1.800.672.3343 or via e-mail.

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