The Basics About Roll-ins and Why Plan Sponsor Should Consider Them

roll-inWith a more mobile workforce and concerns about leakage, the ability for plan participants to consolidate multiple 401k plans and even IRAs or so-called roll-ins is gaining traction. Retirement Clearing House, the leading provider of roll-in services offers a short, online tutorial on the basics and benefits of roll-ins.

What is a “Roll-In”?
Put simply, a “roll-in” occurs when a participant elects to make a rollover contribution of qualified retirement savings from a former plan or IRA, and into their current, active employer-sponsored plan.

Why are roll-ins getting attention? 

  • Policy-makers and plan sponsors have begun the realize the advantages of lifetime participation in employer-sponsored plans, and portability of retirement savings is an important element to support that.
  • Roll-ins are the best way to consolidate retirement savings, as participants change jobs.
  • Most plans accept roll-ins. PSCA’s 58th Annual Survey revealed that 98% of all responding plans indicated that they accepted roll-in contributions

What are the benefits of roll-ins?

For participants, roll-ins:

  1. Consolidate retirement savings
  2. Reduce fees from holding multiple retirement accounts
  3. Simplify retirement planning
  4. Are proven to decrease the incidence of cashouts

For plans, roll-ins:

  1. Increase average balances
  2. Enhance financial wellness metrics
  3. Can serve to reduce plan fees (through increased average balances)
  4. Improve the effectiveness of in-plan retirement income solutions

How do roll-in transactions work?

There are 3 basic elements to a roll-in transaction:

  1. Determine the receiving plan’s roll-in requirements
    • Who’s the recordkeeper of the new plan?
    • What forms & documents are required? Are they electronic or paper-based?
    • How’s the contribution check to be made payable?
  2. Distribution from the former plan
    • Contact former recordkeeper
    • Identify distribution requirements
    • Complete, sign and transmit distribution forms
    • Determine the destination of the contribution check
  3. Contribution to your current plan
    • Complete, sign & transmit contribution forms to your new recordkeeper
    • Verify receipt of the required forms, along with the roll-in contribution check

The IRS Rollover Chart

Early in the roll-in process, one particularly useful document is the IRS’s Rollover Chart, which provides a matrix indicating which types of transfers between plans are allowed.

What can go wrong with roll-ins?

In a word, a lot.   Let’s just examine some issues that can occur on the distribution side.

Distributing institutions may:

  • Have overly-complicated paperwork, including up to 10 pages of complex documents.
  • Make distribution paperwork hard to access, insisting on mailing hard copies, vs. making them available electronically
  • Require documents that are difficult to obtain, including:
    • Personalized letter of acceptance from the receiving institution
    • Personal signature of the distributing plan’s administrator
    • Transfer of Asset documentation
  • They may try to discourage the roll-in by soliciting an IRA or annuity

If you’re a plan sponsor interested in accepting roll-ins:

  1. Make sure that your plan accepts them. This should be spelled out in the plan document, in the section that addresses plan contributions.
  2. Increase awareness by communicating the roll-in feature to your plan’s participants
  3. Lastly, offer roll-in support to your participants, including providing participants with instructions and easy access to forms they’ll need for their roll-in contributions


Plan sponsors should consider a facilitated roll-in service:

A facilitated roll-in services will provide your participants with expert assistance that:

  1. Makes roll-ins quick, easy and pain-free, with end-to-end assistance throughout the transaction
  2. Fees are modest, and can be charged on a per-transaction basis, without regard to plan balance
  3. Importantly, the roll-in service fees can be structured as a permissible plan expense

Will participants be receptive to using a facilitated roll-in service? 

  • Based on the 2015 Mobile Workforce Study, the answer is a resounding “Yes” – even when they would pay for the service out of their own pocket.
  • Participants are even more receptive when the plan pays for the service, where 8 of 10 employees of all generations signaled they’d use an employer-provided, plan-paid roll-in service.
  • Even more surprising, the Mobile Workforce Study found that a large percentage of participant — but particularly Millennials — would consider rolling in IRA balances into their current plan, if the plan paid for it.

PSCA’s 58th Annual Survey also indicated that about 62% of all responding plans permit roll-ins from IRAs.

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