Reduce Your Plan Costs and Administration Headaches with an Automated, Hassle-Free Way to Roll Over Former Employee 401(k) Balances

Benefits of the American Trust Custody
Auto Rollover IRA Solution

For TPAs, Record Keepers, Advisory Firms and Plan Sponsors:

  • Lowers retirement plan administration costs
  • Reduces fiduciary exposure
  • Ensures proper distribution of funds when participants can’t be located
  • Redirects staff’s time and resources to other business processes

For Plan Participants:

  • Protects their tax-deferred status
  • Avoids taxation and potential early withdrawal penalties
  • Increases the chances of collecting their retirement account funds

Don’t Let Abandoned Accounts Drag on Your Plans

Companies that opt to design their plans to include auto-enrollment and auto-renewal typically see a 90% employee participation rate. As a result of this increased participation, there is an unintended downside in the form of abandoned account balances. As employees change jobs — something they are doing more frequently these days — they often leave behind small balances in their employer-sponsored 401(k)s.

Such accounts can become an expensive administrative headache for the plan sponsor, as they lead to increased participant counts and thus higher plan costs, not to mention increased fiduciary liability. Relieving our current clients’ burdens from these abandoned accounts is why the American Trust Custody Auto Rollover IRA Solution was developed. It can be a vital tool for TPAs, recordkeepers, advisory firms and plan sponsors.

How the IRA Rollover Works

The Auto Rollover IRA Solution is completely automated, with the plan sponsor providing files containing the details of the plan participants who have not taken action to rollover their 401(k) to an IRA. Next, those details are uploaded for the automated setup of the registered IRA accounts in their names. Then, the funds are directly transferred from the 401(k) plan into the IRA accounts, which preserves the tax-advantaged status of the funds. At that point American Trust Custody becomes the custodian of the IRA Rollover Accounts, removing the fiduciary requirements from the TPA or plan fiduciary.

American Trust Custody makes attempts to contact the employee with details of this newly established IRA account. Once found, the account holder can keep their IRA with American Trust Custody, transfer the funds to another IRA custodian, or request a cash distribution. American Trust Custody will handle all withdrawals and tax reporting when required.

Your Participants Will
Be in Good Hands  
 

American Trust Custody is a non-depository state-chartered trust company and a part of AmericanTCS. For almost 50 years, the businesses that comprise AmericanTCS have supported investment professionals and financial organizations with tools to help attract, grow, and retain assets. AmericanTCS companies provide a broad array of sophisticated financial products, technology and support services to registered representatives, investment advisors, and other financial intermediaries including retirement plan TPAs, bank trust departments, independent broker-dealers, and insurance companies.

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