IRS updates retirement rollover notices

The Department of the Treasury and the Internal Revenue Service (IRS) have released new guidance aimed at helping retirement plan administrators fulfill their legal obligations when participants receive eligible rollover distributions.

The guidance, published as Notice 2026-13, updates the safe harbor explanations plan administrators can use when issuing written notices to participants about retirement plan distribution options and associated tax consequences under Internal Revenue Code section 402(f). 

Under federal law, these written explanations must be provided to participants before an eligible rollover distribution is made, informing them of their ability to roll savings into another employer-sponsored plan or an individual retirement account, and of the potential tax withholding implications if they choose not to roll over funds. 

Notice 2026-13 includes two safe harbor templates: one for distributions from non-Roth accounts and another specifically for designated Roth accounts. Plan administrators can use these templates as provided — or customize them to reflect specific features of their plans, such as omitting sections that don’t apply (for example, if the plan does not hold after-tax employee contributions).

Reflecting recent tax law changes

The updated safe harbor explanations incorporate legislative changes enacted since Aug. 6, 2020, particularly those from the SECURE 2.0 Act of 2022, as well as a recommendation from the U.S. Government Accountability Office to improve the clarity and usefulness of rollover notices for participants. 

Highlights of the changes reflected in the updated guidance include:

• Expanded exceptions to the 10% additional tax on early withdrawals. New exemptions — such as distributions for emergency personal expenses, to domestic abuse victims, to terminally ill individuals, and for qualified disaster recovery — are now addressed in the safe harbor explanations. Some of these distributions also affect whether they are considered eligible rollover distributions under the rollover rules. 
• Required Minimum Distribution (RMD) rule changes. The notice reflects changes in the age at which participants must begin taking RMDs, increased ages established by SECURE 2.0, and special distribution rules for surviving spouses, who may elect to use their own life expectancy for calculating required distributions. 
• Other legislative updates such as higher dollar thresholds for small lump-sum distributions, revisions to the treatment of distributions for health and long-term care insurance in governmental plans, the elimination of RMDs for designated Roth accounts in plans, and updates to rollover restrictions (including on SIMPLE IRA rollovers).

Guidance for plan administrators

The IRS stressed that plan administrators and payors may tailor the safe harbor explanation text to match their plan’s structure, provided that the resulting notice continues to satisfy section 402(f) of the tax code. 

For example, administrators can drop sections that are not relevant — such as those related to after-tax contributions when their plan does not include them — helping avoid confusion for participants and focusing only on applicable distribution rules. 

The IRS also noted that the safe harbor explanations will need future updates to stay current with law changes that occur after Jan. 15, 2026. Administrators relying on these explanations should monitor IRS guidance for additional revisions.