Rolling a 401(k) into a new plan or an IRA is supposed to be a bookkeeping event. In practice it is often a paper check, mailed to your house, that you are expected to forward to another financial institution before a clock runs out. On August 12, 2026, Treasury and the IRS proposed to end that — eventually.
What Notice 2026-49 Actually Does
The notice implements Section 324 of the SECURE 2.0 Act, which directed Treasury to "simplify, standardize, facilitate, and expedite" rollovers and trustee-to-trustee transfers. It delivers four sample forms and a five-step process for moving money between employer plans, or between an employer plan and an IRA.
The sequence puts the institutions in contact with each other rather than routing the transaction through you:
- Form 1 — you request the rollover and authorize the receiving plan to contact your old plan.
- Form 2 — the receiving plan requests the funds, specifies an electronic transfer method, and assigns a unique Rollover Identification Number.
- Form 3 — the distributing plan certifies its tax-qualified status and breaks the distribution into pre-tax, Roth, and after-tax components.
- Form 4 — the receiving plan confirms acceptance and supplies electronic routing details.
- Step five — assets move electronically, without you touching them.
That Form 3 component breakdown matters more than it sounds. Preserving the pre-tax versus Roth character of each dollar is where rollovers most often go wrong administratively, and a standardized certification is designed to carry that split intact.
Two limits are worth noting. The guidance covers plan-to-plan and plan-to-IRA rollovers — it does not apply to IRA-to-IRA transfers. And the forms address the movement of money, not the decision itself.
Why This Problem Was Worth Fixing
A January 2024 GAO report found that nearly one-third of surveyed participants received paper rollover checks they had to forward themselves, a practice GAO called "archaic when communications are increasingly conducted electronically." A separate GAO finding put 1 in 4 rollover attempts as running into trouble from poor communication between providers.
The cost of the delay is not theoretical. Money in transit is out of the market — earning no interest, no dividends, and no returns. Industry research cited by NAPA found that on a $100,000 rollover, an eight-week delay landing across a market swing could translate to roughly $76,882 in lost growth over 30 years. Survey data has put 42% of savers at two months or more to complete the process.
Multiply that across a career. Treasury's own analysis notes modern workers may change jobs "up to 10 or more times during a 40-year career."
The Catch: It Is Optional
This is the part savers should not miss. Use of the sample forms and procedures is entirely optional for plan sponsors. The IRS explicitly stated it is "not currently providing safe harbors based on the use of the sample forms." Your plan may adopt them, modify them, or ignore them.
Treasury signaled where it wants to go — it is considering eliminating paper checks to participants, mandating electronic transfers, creating safe harbors, and treating obstructive practices as impermissible. But that is a future rulemaking, with transition time built in. Comments on the notice are due October 23, 2026.
Until then, the default at many providers remains the check in the mail.
Practical Takeaways
- If you are rolling over now, ask both institutions directly for a direct, electronic plan-to-plan transfer before accepting any other method. Do not wait to be offered it.
- If a paper check is unavoidable, insist it be made payable to the receiving institution for your benefit and mailed directly to that institution — not to you.
- A check made payable to you triggers mandatory 20% withholding on pre-tax plan distributions and starts the 60-day clock. You would then have to replace that withheld 20% from other cash to avoid tax and penalty on it.
- Ask the distributing plan to document the pre-tax, Roth, and after-tax breakdown in writing, and confirm the receiving institution recorded it the same way.
- Track the transfer with a reference number and follow up weekly. Time out of the market is the real cost, and nobody is monitoring it for you.
- Employers, sponsors, and advisers who want the paper-check era to end have until October 23 to file comments.
Sources: IRS – Notice 2026-49, Sample Forms and Proposed Procedures for Rollovers; Journal of Accountancy – IRS provides guidance on rollovers between retirement plans and IRAs; Forbes – Moving Your 401(k)? New IRS Forms Could Make Rollovers Easier; Current Federal Tax Developments – Technical Analysis of IRS Notice 2026-49; GAO-24-107167 – 401(k) Retirement Plan Tax Notices; NAPA-Net – Study Suggests 401(k) Rollover Delays Could Cost Savers Up to $76,000; Accounting Today – IRS provides guidance on retirement plan rollovers