Did my former employer roll my retirement plan account to Liberty Trust Company?
If you are visiting our website you probably found our name on a form among a stack of forms you received from your former employer. Generally, this stack includes forms titled something like “Distribution Election Form”, “Special Tax Notice”, and “Notice Regarding Failure to Consent to Distribution”. There may be other forms included as well. Those forms should have given you a deadline (at least 30 days) to return the forms so that the plan could distribute your account directly to you or to an IRA of your choosing. The form titled “Notice Regarding Failure to Consent to Distribution” (or similar) probably informs you that if do not make a distribution election, your account will be rolled over to an IRA maintained by Liberty Trust Company.
How can I confirm that my funds are at Liberty Trust Company?
Call our office at 1-800-473-1977 and ask for the Automatic Rollover Department. We will check to make sure we have received your funds. Sometimes the former employer’s plan may delay sending the funds to us. In that case you may still be able to complete and return the election forms to your former employer.
What do I do next?
Once you have confirmed that we have received the funds from your former employer’s plan, you will need to claim your account and tell us what you want to do with it. To claim your account, you will need to complete an IRA Account Application. Mail the following to us:
- Signed Application (and fee agreements)
- A copy of your current, unexpired Driver License or Passport.
What can I do with my account?
- Take a cash Distribution
- Transfer to another IRA
- Do a Direct Rollover to a qualified plan
- Keep your account at Liberty Trust Company
For each IRA at Liberty Trust Company, complete a Distribution Request Form.
Please note that a cash distribution to you is a taxable event and it will be reported to the Internal Revenue Service (IRS). You may wish to consult your tax adviser regarding your non-taxable options.
Rollover to a Qualified Plan
If your current employer sponsors a qualified plan, such as a 401(k) plan, you may be able to roll over your your IRA funds to the plan. Check with your current employer to see if the plan permits rollovers from IRAs. If it does and you wish roll your funds to the plan, complete the following Request for a Direct Rollover to a Qualified Plan. Both you and the plan administrator or trustee will need to sign the form.
Transfer to Another IRA
If you want to transfer your IRA account to another IRA, you will need to contact the new custodian to obtain their transfer paperwork. We require the original of the new IRA custodian’s transfer paperwork, signed by both you and the new custodian.
Keep my account with Liberty Trust
If you wish to keep your IRA account, no additional paperwork is required once we have received your completed application and fee agreements.
What tax forms will I receive as a result of the Automatic Rollover?
By January 31 of the calendar year following the year the rollover was made, you should receive a Form 1099-R from your former employer’s plan showing the amount of the rollover in Box 1 and a “G” (or “H” if the rollover was from a Roth 401(k) account) in box 7. The “G” indicates that this was a direct rollover, which generally means it is not a taxable distribution. We will send you a Form 5498 by May 31 of the calendar year following the year we received the rollover from your former employers’s plan. The 5498 will show the amount of the rollover received by us in Box 2 and the value of your account as of December 31 in Box 5. If you choose to take a cash distribution from your IRA with Liberty Trust Company or do a Direct Rollover to a Qualified Plan, we will issue a Form 1099-R to you and report the distribution to the IRS. If you choose to transfer your IRA to another IRA custodian, the transfer will not be reported to the IRS by either custodian. If you have questions, you should contact your tax adviser.
How does this Automatic Rollover affect my personal tax return?
We do not give tax advice, but the instructions to Form 1040 indicate that distributions from qualified plans and IRAs, including direct rollovers, must be reported on your tax return. If you have questions, you should contact your tax adviser.