Treasury plan could speed rollovers and reduce paper checks

Retirement rollovers could become direct, encrypted, plan-to-plan transfers instead of checks that pass through a participant's hands. That is the future Treasury and IRS map out in Notice 2026-49, issued under the SECURE 2.0 Act. PLANADVISER reports the guidance lays out standardized forms and procedures for workplace retirement plans and some IRAs, with the goal of faster, more consistent rollovers across financial institutions.

Under the proposal, plan sponsors would be encouraged to use encrypted communications, assign each rollover a unique identification number, and transmit assets by electronic fund transfer whenever possible. The aim is to reduce the paper check. The agencies cite a 2024 Government Accountability Office report in which nearly one-third of surveyed participants received a check and then had to forward it to their new plan.

When an electronic transfer isn't available, the proposed process would still use a check — one made payable to the receiving plan and sent directly there, rather than to the participant. That small rule is the hinge of the proposal. It turns a rollover into an institution-to-institution transaction, and it leaves the participant nothing to hold or set aside. For an advisor taking on a new client, asset movement becomes a transfer to track instead of a step to chase.

Nothing in the proposal forces the change yet. Use of the new forms and procedures is voluntary, and Treasury and the IRS say they are weighing additional rules that could further restrict paper checks and require electronic transfers once plans have the technology. The October 23 comment deadline gives rollover-heavy firms a chance to tell the agencies how far and how fast to push.

For all its administrative language, the proposal marks a point of view: the default should be movement between institutions, not a check routed through a client's schedule. A check that never reaches the participant can't be delayed by the participant's calendar, and a transfer with its own identification number gives the advisor one clean thing to follow.