IRS Issues Updated Rollover Notices: What Plan Sponsors Need to Do

By: Anne M. Meyer

The IRS issued updated safe harbor explanations for the Section 402(f) rollover notice in Notice 2026-13, replacing Notice 2020-62. The guidance includes separate model notices for distributions from non-Roth accounts and designated Roth accounts, reflecting statutory changes since 2020. Plan administrators of qualified plans, Section 403(a) annuities, Section 403(b) plans, and governmental Section 457(b) plans may rely on the new models to satisfy the Section 402(f) requirement.

The updates are largely driven by SECURE 2.0 and related guidance. The revised notices reflect new or expanded exceptions to the 10% early distribution tax, including distributions for emergency personal expenses, domestic abuse victims, terminal illness, qualified disaster recovery, certain public safety employees and firefighters, and qualified long-term care distributions (effective for distributions after December 29, 2025).

The models also reflect other recent changes, including higher required minimum distribution (RMD) starting ages, elimination of RMDs for designated Roth accounts in plans, new surviving spouse RMD elections, increased small-sum cash-out limits ($7,000), revised public safety officer health and long-term care premium rules, special rules for pension-linked emergency savings accounts (PLESAs), and clarification that deemed distributions of collectibles are not eligible rollover distributions.

Action item: Plan administrators should coordinate with their recordkeepers and legal counsel to promptly replace legacy 402(f) notices with the new models, selecting the appropriate version based on the participant’s account sources and removing provisions that do not apply to their plans. The new model notices are effective immediately and should be used now in place of prior notices to meet the Section 402(f) notice requirement.