If you have ever changed jobs and moved a 401(k), you may remember the strange moment when a check made out to your new provider arrived in your mailbox — and it became your job to forward it before a clock you may not have known about ran out.
Treasury and the IRS are now proposing to end that practice. Notice 2026-49, released August 12, delivers the sample rollover forms Congress ordered in Section 324 of the SECURE 2.0 Act, and it goes further: Section IV of the notice asks whether the mailed-to-participant rollover check should be eliminated outright.
Why the Check Is the Weak Point
The notice leans on two Government Accountability Office reviews. GAO's 2024 report, 401(k) Plans: Additional Federal Actions Would Help Participants Track and Consolidate Their Retirement Savings (GAO-24-103577), found that nearly one-third of participants receive paper checks that they must then send to a receiving plan themselves.
The IRS states the problem directly: mailing a check to the participant "puts the onus on the participant to transmit the check to the receiving plan, and in the process, the check may be lost or misplaced." It also notes the delay itself has a cost — time "during which a participant's retirement account does not receive interest or dividends."
The earlier 2013 GAO report was blunter, calling the practice of sending direct rollover checks to participants "archaic when communications are increasingly conducted electronically."
Scale matters here. GAO counts more than 92 million Americans with over $7 trillion in 401(k) plans, and observes that workers "may change jobs up to 10 or more times during a 40-year career and accumulate as many retirement accounts."
What the Four Forms Would Do
The notice proposes a five-step sequence built on four standardized forms:
- Form 1 — the participant's rollover request, filed with the receiving plan
- Form 2 — the receiving plan's request to the distributing plan
- Form 3 — the distributing plan's rollover certification
- Form 4 — the receiving plan's acceptance, which selects the transfer method
The design shift is the point: the two institutions talk to each other, instead of using you as the courier. Each rollover gets a rollover identification number (RIN) assigned by the receiving plan, so the plans can coordinate over encrypted transfers without passing your Social Security number back and forth. And if a check remains the only workable method, the notice says it should be payable to the receiving plan for your benefit and mailed directly to that plan, not to you.
Use of the forms is optional for plan sponsors today. Comments are due October 23, 2026.
Also Under Consideration
Section IV floats changes with real teeth: removing the regulation (§1.401(a)(31)-1, Q&A-4) that permits paper checks to participants, creating safe harbors so a receiving plan can accept a rollover without re-verifying the sending plan's qualified status, and declaring certain obstacles impermissible — explicitly naming Medallion Signature Guarantee demands and "distribution letters and other burdensome requests."
What To Do Now
Nothing here is effective yet, and the IRS acknowledges any electronic mandate would be delayed until recordkeepers can build the plumbing. Until then:
- Ask for a direct trustee-to-trustee transfer, and specifically request the check be sent to the receiving institution — not to you.
- If a check does arrive, confirm the payee. If it is payable to the new custodian "FBO" you, it is still a direct rollover. If it is payable to you personally, it is an indirect rollover: 20% is withheld, and you must deposit 100% of the original balance — replacing the withheld portion out of pocket — within 60 days.
- Push back on friction. If a plan demands a Medallion Signature Guarantee, ask whether it is genuinely required. The IRS is considering banning the practice.
- Open the receiving account first. Every proposed step begins there.
Sources: IRS Notice 2026-49 (irs.gov/pub/irs-drop/n-26-49.pdf); IRS Newsroom, "Treasury, IRS issue guidance on rollovers between retirement plans and individual retirement accounts"; GAO-24-103577 (Jan. 18, 2024); GAO-13-30 (Mar. 7, 2013); Accounting Today.