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Automatic rollover IRA help

Automatic rollover IRA help


What you need to know about these types of IRAs.

What is an automatic rollover IRA?

An automatic rollover IRA is a retirement savings account, which was automatically rolled over by a retirement plan sponsor to Principal Bank®. This automatic rollover occurs when your former employer’s retirement plan doesn’t allow former employees with less that a specific amount (usually $5,000) to stay in the plan. Or, this can happen if an employer’s retirement plan closes.

When either occurs, you’ll receive a letter with several options for removing your retirement saving from the plan. You are given a specific timeframe to respond. If your funds are still in the plan on the response date, your savings are moved out of the retirement plan based on the plan’s provisions (this is called a distribution).

An automatic rollover IRA is designed to minimize investment risk. It’s meant to be a temporary parking spot until you decide what you want to do with your retirement savings.

I did not request that an automatic rollover IRA be opened for me, why did this happen?

The law 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 didn’t decide what to do with the funds left in your employer-sponsored retirement plan, the funds were moved into a Principal Bank® Automatic Rollover IRA on your behalf.

Or, this can happen if retirement plan closes and a decision hasn’t been made about what to do with the retirement funds as of the date the plan closes.

Will I receive something from Principal Bank notifying me about my automatic rollover IRA?

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

 What if I didn't receive a welcome letter from Principal Bank?

Even if you haven’t received your welcome letter from Principal Bank yet, we can still confirm your identity and that your account is at Principal Bank. Call 800-672-3343 . We’re available 7 a.m. – 7p.m. CT weekdays, excluding holidays to help.

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

Your IRA was originally established for you by your previous 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. 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 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.

Have a Principal Bank IRA?

You can log in to access account information online.

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Converting an Automatic Rollover IRA

Call us at 800-672-3343 to discuss converting your current account to a CD or money market IRA, and get the appropriate forms to get started.

Related Forms

Automatic Rollover IRA Terms and Conditions, Disclosures, & Fees (PDF)