Individuals

A type of retirement plan that meets the requirements of Internal Revenue Code Section 401(a). Qualified plans provide an effective tool for growing retirement accounts tax-free . If you participate in a qualified retirement plan, money goes into your account pre-tax. Investment and interest earnings are not taxed as they grow. Funds in the account are not taxed until you begin receiving distributions. Since most people don’t make withdrawals until retirement age, withdrawn funds are often taxed at a lower rate. Qualified plans are highly regulated by federal law, and working with an experienced advisor can help Plan Sponsors provide their employees with a more effective retirement plan.

We provide services for many types of qualified accounts, including:

• Traditional (non-Roth) Individual Retirement Account (IRA) – A retirement savings account that allows individuals to contribute pre-tax money to the account. The money is not taxed until it is withdrawn from the account.
• Roth Individual Retirement Account (IRA) – Unlike the Traditional IRA, this type of IRA allows individuals to contribute after-tax money to the account, and account withdrawals are tax-free.
• Automatic Rollover IRA – A special type of IRA used by employers in on-going plans when they are unable to locate former employees. The employer is allowed to “roll over” the former employee’s retirement account into an IRA in order to remove it from the company-sponsored plan.
• Missing Participant IRA – Similar to the Automatic Rollover IRA, this type of IRA is used by employers when they are terminating the company’s retirement plan and can’t locate a former employee. The employer is allowed to roll over the “missing participant’s” retirement account into a Missing Participant IRA in order to terminate the plan according to Department of Labor Safe Harbor regulations.
• 401(k) – An employer-sponsored plan that allows employees to defer a percentage of their compensation to a 401(k) account under the plan. The amount deferred is usually not taxable to the employee until it is withdrawn or distributed from the plan.
• 403(b) – A tax-advantaged, defined contribution plan available only to public school, university, hospital and other non-profit employees and certain members of the clergy.
• SIMPLE (Savings Incentive Match Plan for Employees) IRA – Provides small employers with a simplified method for contributing to employees’ retirement savings. When employees make plan contributions, the employer is required to make matching or non-elective contributions.
• SEP (Simplified Employee Pension) IRA – Allows employers to contribute to traditional IRAs set up for employees. A business of any size, even self-employed, can establish a SEP.

A 1099-R is a tax form used for reporting distributions from IRAs, 401k’s, pension plans and other types of retirement plan accounts. The IRS requires anyone who receives a retirement account distribution greater than $10 to include this form with their annual tax returns. If you received a 1099-R form from PenChecks Trust, a distribution was processed on your behalf in the tax year indicated on the form. If you don’t recall receiving a distribution, please call us at 800.541.3938 for assistance.

A 5498 is an IRS form used to report contributions on IRAs (Roth and non-Roth) as well as Savings Incentive Match Plan for Employees (SIMPLE) and Simplified Employee Pension (SEP) plans. The custodian of your account is required to send this form to you if you have an account balance at the end of the calendar year. However, unlike the 1099-R form, you are not required to send in the 5498 with your annual tax returns. It is for informational purposes only.

PenChecks Trust is the largest and most trusted independent provider of fully compliant retirement plan distribution services in the country. The experts in Automatic Rollover and Missing Participant IRAs, we help Institutions, Plan Sponsors, Third-Party Administrators (TPAs) and Advisors reduce risk, lower administrative costs and increase efficiency. We also specialize in reuniting current and former employees with their retirement funds so they can make smart decisions to continue investing for their retirement.

In most cases we were selected to custody your retirement account by your employer or former employer, who has either terminated their plan or moved it to a specialized firm like PenChecks Trust as permitted by IRS and Department of Labor (DOL) regulations. Often, employers will move a participant’s account to us because they can’t locate former employees and become unable to process their account distributions. Other times, large financial institutions will transfer certain types of accounts, such as traditional IRAs or 403(b) retirement accounts to us, because they no longer wish to serve that market.

Assuming you have not reached normal retirement age (age 65 to 67 depending on what year you were born) and that you do not have an urgent need for the money, it is usually considered best not to take a lump-sum distribution. Keeping your money in some type of retirement account offers several important benefits. It provides a simple tool for continuing to save for your retirement. It preserves the tax-advantaged status of the funds in the account. And it avoids a potentially large tax payment to the IRS that is required with a lump-sum payment. We can assist you in rolling over your account into the retirement savings vehicle of your choice.

We take the security of your account very seriously. For recipients of a pending distribution, all respondents are required to authenticate their identity with secure PINs that are provided and other personal information. All individuals claiming Automatic Rollover or Missing Participant IRA accounts are required to pass USA PATRIOT Act identity verification and provide additional forms of identification to prevent fraudulent claims and ensure all funds are attributed to the correct participant.

NOTICE TO ACCOUNT HOLDERS

In accordance with Section E.8 of the PenChecks Trust Company of America Automatic Rollover and Missing Participant Individual Retirement Account Custodial Agreement or PenChecks Trust Client Services Agreement and Statement of Services and Fees, please be advised of the following change:

Beginning February 15, 2021, PenChecks Trust is improving its Express, Enhanced, and Premier IRA Programs. PenChecks Trust will continue to provide its Bank Deposit Program (“BDP”) during the first twelve (12) months that an Automatic Rollover or Missing Participant IRA is with PenChecks Trust. After the first twelve (12) months, PenChecks Trust now offers the Stable Value Program (“SVP”). The SVP allows the Participant Account Holder or Sponsor to direct PenChecks Trust to invest the Automatic Rollover and Missing Participant IRA in the Guaranteed Fixed Income Fund offered by the Standard Insurance Company pursuant to the agreement between PenChecks Trust and The Standard.

PenChecks Trust shall receive the same fee within the SVP as it receives within the Bank Deposit Program. Each month, to the extent that the Standard Guaranteed Fixed Income Fund pays interest in amounts in excess of the National FDIC Jumbo Money Market rate for the applicable month, the SVP Fee shall be equal to the lesser of (i) 1/6 of 1% of the IRA account balance as of the end of the month or (ii) 1/12 of the annualized interest rate paid by the Standard Guaranteed Fixed Income Fund for the month in excess of the National FDIC Jumbo Money Market Rate.

If you do not wish to participate in the PenChecks Trust Stable Value Program, you must claim your account within 30 days after the one-year anniversary of your PenChecks Trust Automatic Rollover or Missing Participant IRA. Participants who fail to claim their account by the aforementioned date consent to this change.

For a full copy of the PenChecks Trust Company of America Automatic Rollover and Missing Participant Individual Retirement Account Custodial Agreement or Client Services Agreement, please contact PenChecks Trust at 800.541.3938.

NOTICE TO ACCOUNT HOLDERS

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), required minimum distributions (RMDs) for 2020 have been waived for IRAs and retirement plans, including beneficiaries with inherited accounts. This waiver includes RMDs for individuals who turned age 70 ½ in 2019 and took their first RMD in 2020.

In accordance with the directive of the CARES Act and in an effort to preserve long-term retirement savings, PenChecks Trust will not be automatically processing RMDs from Automatic Rollover and Missing Participant IRA Accounts for 2020. If you previously received a Form 5498 in early 2020 that indicated an RMD was required from your account for 2020, the relief provided by the CARES Act has superseded that notice and PenChecks has accordingly suspended RMD activity on your account for the 2020 tax year.

Please Note: PenChecks Trust Automatic Rollover and Missing Participant IRA Accounts that contain Roth funds do not require withdrawals until after the death of the owner.

If you have questions about RMDs from your IRA or your account, in general, please contact PenChecks Trust at 800.541.3938.