Principal Bank Safe Harbor IRA for Plan Sponsors
The Economic Growth and Tax Relief Reconciliation Act (EGTRRA) requires that retirement plan mandatory distributions between $1,000-$5,000 for active plans be automatically rolled into an IRA instead of being paid in cash, unless the participant elects otherwise. The automatic rollover requirement allows plan sponsors to reduce plan administration costs for former employees, and helps former employees save for retirement.
Principal Bank offers plan mandatory distributions for both Traditional and Roth IRA plans.
For active plans, Principal Bank's program includes the following qualified plan types: 401(k), 403(b), Defined Benefit, Governmental 457(b) plans, Non-elective church plans, and ESOPs. Principal Bank also offers a program for terminating qualifed plans (not available for Defined Benefit).
The Principal Bank Safe Harbor IRA is a qualified savings account that pays a competitive interest rate and provides access to the funds at any time. The IRA is protected by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per depositor.
When a Principal Bank Safe Harbor IRA is established, the former participant will receive a Welcome Kit from Principal Bank containing additional information, including the Traditional IRA Custodial Agreement, disclosures and postage-paid envelopes for additional contributions.
Principal Bank personal bankers are available Monday through Friday, excluding holidays to answer questions or assist customers at 1.877.884.7236.
|Principal Bank Safe Harbor IRA|
|Deposits||Automatic rollover of retirement plan mandatory small amount distributions.
The former participant may make additional contributions to this IRA.
|As needed by accessing the IRA distribution form on the Principal Bank web site, or by calling a personal banker at 1.877.884.7236.|
|Account Fee||$15 Annual Fee - No transaction fees. No plan sponsor fees.|
|Interest Rate||Current Safe Harbor IRA rates.|
|Interest Payments||Interest is accrued daily and paid to the IRA at the end of each calendar quarter.|
|Other Fees||Safe Harbor IRAs may be subject to the following Bank Fees:
Review the documents and disclosures for Principal Bank Safe Harbor IRAs.
Review the documents below for information on setting up automatic rollovers of Mandatory Distributions.
- Mandatory Distribution Rollover IRA Agreement for active plans (PDF: 95 KB)
- Terminating Plan Rollover IRA Agreement
(PDF: 23 KB)
- Safe Harbor IRA Implementation Checklist (PDF: 37 KB)
- Safe Harbor IRA Technical Specification - Comma Separate Values (CSV) Format (PDF: 118 KB)
- Safe Harbor IRA Technical Specification - XML Format (PDF: 28 KB)
- Upon termination of the plan, the plan sponsor may designate Principal Bank as the IRA provider for lost participant accounts. The terminating plan rollover agreement doesn't apply to terminating defined benefit plans. The agreement for terminating plans does not impose the $5000 limit on accounts.
Disclosures and Documents for Former Participants
These documents will be included in the welcome kit mailed to each former employee when their Safe Harbor IRA is opened and funded.