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

General

Rollover and Contribution 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 individuals have left an employer or when an employer terminates a retirement plan (Plan Term IRA) and the participant did not make an election of benefits for the funds in their employer-sponsored retirement plan. Funds in your Safe Harbor or Plan Term IRA are protected by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000 per depositor. Principal Bank pays interest on these accounts. The current rate is 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 $1000 or more be automatically rolled into an IRA instead of being paid out in cash, unless the participant elects otherwise. So 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, they 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 several forms that may require your signature.

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Are there any bank fees?

A $15 annual fee per IRA plan is charged. Additional fees may apply. See Schedule of Fees (PDF: 151 KB) for more information.

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Rollover and Contributions Options

What can I do with my Safe Harbor or Plan Term IRA to avoid the withdrawal penalties?

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
  • Transfer funds to another financial institution:
    • We suggest contacting your financial institution so you may comply with their process.
    • Complete our IRA Distribution Form.
    • Complete IRA Signature Card and Affidavit of Identity.
  • 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.
    • Complete our IRA Distribution Form. Be sure to check the box for "Direct Rollover to an employer-sponsored plan".
    • Complete IRA Signature Card and Affidavit of Identity.

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Can I make additional deposits into this account?

Yes! See the Principal Bank IRA contribution form.

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

Please sign and return the Safe Harbor or Plan Term IRA signature card along with a completed IRA distribution form (available by logging into the bank secure site). An Affidavit of Identity may also be required.

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Forms

What is the Safe Harbor or Plan Term IRA signature card?

The Safe Harbor or Plan Term IRA signature card serves two purposes:

  • 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.

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Why did I receive both a Safe Harbor or Plan Term 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 or Plan Term IRA.

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

Safe Harbor or Plan Term 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 or Plan Term 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.

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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 on the signature card.

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

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, included in your Welcome Kit, or by logging into Principal Bank's 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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How can I obtain forms needed to withdraw the Safe Harbor or Plan Term IRA?

You can access them and print them from the Safe Harbor IRA forms page, or you may contact a Personal Banker between 7 AM to 9 PM (Central Time), Monday through Friday, excluding holidays at 1.877.884.7236. The forms can be mailed, faxed or emailed to you.

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If you have other questions, please call us between 7 AM to 9 PM (Central Time), Monday through Friday, at 1.877.884.7236.

Related Links

Stretching your IRA
Discover how your IRA assets can create significant income for your loved ones over time.

Go to Stretch IRA

Safe Harbor IRA Forms
Find the forms you need to open your Safe Harbor IRA here.

Go to Safe Harbor IRA Forms

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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