Account Holders

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Account Holder Information

Welcome to PenChecks Trust, the largest independent processor of outsourced retirement plan distribution services in the country. If you received an IRS Tax Form 5498 or 1099-R, see below for more information about these forms.

But first, check out this short video to see the most common reason why PenChecks Trust may have an account for you.


 

How PenChecks Trust Ended Up With An Account For You

If you’ve been directed by your retirement plan sponsor to contact PenChecks Trust about your account, you may be wondering how we came to be the custodian of your assets. This short video shows what can happen to retirement accounts when employees leave their employers, and shows how PenChecks helps, and how you can initiate the process to reclaim your retirement funds.

Form 5498 Information

What is a Form 5498?
An IRS Form 5498 reports the total annual contributions to an IRA account and identifies the type of retirement account you have, such as traditional, Roth, SEP or SIMPLE IRA. Form 5498 also tells you the fair market value of all the investments in your IRA account as of December 31st of the preceding year.
Why You Received a 5498 from PenChecks
If you received a Form 5498 from PenChecks Trust, we are holding an IRA account for you. The short video above illustrates one of the most common ways PenChecks Trust comes to be the protector of automatic rollover accounts for people with unclaimed retirement funds.

Form 1099-R Information

What is a Form 1099-R?
An IRS Form 1099-R reports retirement benefit distributions (payments) from pensions, annuities, or other retirement plans. A Form 1099-R also indicates if your distribution was taxable and/or may be subject to any penalties.
Why You Received a 1099-R from PenChecks
Each year PenChecks is engaged by plan sponsors, third party administrators, and other financial institutions to process benefit payments to their retirement plan participants. You would have received a 1099-R if you got a distribution of $10 or more from a retirement plan during the year. The name of the retirement plan (or your former employer) that initiated the distribution for you will appear below your name on the Form 1099-R.

Recipients of Both Forms (5498 and 1099-R)

Why You Received a 5498 and a 1099-R from PenChecks
If your former employer could not locate you, as illustrated in the video above, they may have engaged PenChecks Trust to process a distribution out of your old retirement plan into an automatic rollover IRA for you. If so (and your IRA was still active on December 31st), you would have received both documents from PenChecks Trust:
  • A Form 1099-R for the distribution out of your retirement plan
  • A Form 5498 reporting the value of your IRA at the end of the year
If you received both forms, please follow the directions in the next section to ensure you take the appropriate action(s) regarding these forms.

What You Should Do Now

Form 5498 Recipients
If you received a Form 5498, you have three options with respect to your IRA account at PenChecks Trust:
  1. You may leave your retirement funds in your IRA Account with PenChecks Trust. We will continue to provide custodial and record-keeping services, including the crediting of monthly interest. If you would like to diversify your investment choices from the current Federally-allowed default investments, we can assist you with this.
  2. You may request a rollover distribution of your funds and have them transferred:

    a) to another existing IRA you currently own (if you do not have another IRA and would like to establish one, PenChecks Trust can help you with this), or

    b) to a new employer’s qualified plan that accepts the rollover of retirement funds.

  3. You may request that your IRA funds be paid directly to you. If you choose this option, the funds will be subject to federal withholding and income taxes as well as state withholding taxes (if applicable).

If you choose to exercise options 2 or 3 above, you can request a distribution of your funds in one of two ways:

ONLINE

  • Go to the following secure site: www.MyBenefitElection.com/MyIRA
  • Select the “Inquiry” section
  • Enter your first and last name (exactly as they appear on the Form 5498) and your social security number
  • You will be able to enter benefit election details and submit the required information through the secure online portal

PHONE

  • Call toll-free (844) 44-MY-IRA
  • You will be able to request paper benefit election forms which may be completed and returned to us for processing.

If you have questions or would like further assistance, please contact us toll-free at (844) 44-MY-IRA or email myira@penchecks.com.

Form 1099-R Recipients
If you received a Form 1099-R from PenChecks Trust, you need to include this information with your personal tax filing for the tax year indicated on your Form 1099-R. The code in Box 7 on your Form 1099-R will determine if your distribution is taxable. The most common Box 7 codes are 1, 7 & G.
  • Code 1 – Early Distribution: Typically a taxable distribution where the recipient is under age 59 ½ and may be subject to an additional early withdrawal tax of 10%.
  • Code 7 – Normal Distribution: Typically a taxable distribution where the recipient is over age 59 ½.
  • Code G – Direct Rollover: Regardless of age, is a distribution from a qualified plan to another eligible retirement plan. Typically there are no immediate tax consequences.

*For detailed information about all of the data contained on a 1099-R and its implications, see www.irs.gov/pub/irs-pdf/i1099r.pdf.

*Please note: You should always consult a tax professional for advice on your specific situation.

If you have questions about the distribution you received, your 1099-R from PenChecks Trust, or if you need a duplicate copy of your 1099-R, you can reach a Participant Services representative here:

Important Updates for Individual Retirement Account Holders

Update to the Automatic Rollover/Missing Participant IRA Agreement
NOTICE TO ACCOUNT HOLDERS

In accordance with Section E.8 of the PenChecks Trust Company of America Automatic Rollover and Missing Participant Individual Retirement Account Custodial Agreement or PenChecks Trust Client Services Agreement and Statement of Services and Fees, please be advised of the following change:

Beginning February 15, 2021, PenChecks Trust is improving its Express, Enhanced, and Premier IRA Programs. PenChecks Trust will continue to provide its Bank Deposit Program (“BDP”) during the first twelve (12) months that an Automatic Rollover or Missing Participant IRA is with PenChecks Trust. After the first twelve (12) months, PenChecks Trust now offers the Stable Value Program (“SVP”). The SVP allows the Participant Account Holder or Sponsor to direct PenChecks Trust to invest the Automatic Rollover and Missing Participant IRA in the Guaranteed Fixed Income Fund offered by the Standard Insurance Company pursuant to the agreement between PenChecks Trust and The Standard.

While no specific rate of return is guaranteed, the goal of this program change is to increase the retirement earnings for the individual Account Holders over the life of their IRA, while still maintaining the assets in a conservative, low-risk investment.

The administration fees in the SVP will remain the same as the administration fees in the BDP. The PenChecks SVP fee will be a maximum of 0.1667% monthly. However, there will be no SVP administration fees assessed on the Initial Program Earnings (“IPE”). The IPE is a rate equivalent to the National FDIC Jumbo Money Market rate which is set quarterly.

If you do not wish to participate in the PenChecks Trust Stable Value Program, you must claim your account by February 15, 2021. Participants who fail to claim their account by the aforementioned date consent to this change.

For a full copy of the PenChecks Trust Company of America Automatic Rollover and Missing Participant Individual Retirement Account Custodial Agreement or Client Services Agreement, please contact PenChecks Trust at 800-541-3938.
Update Regarding Required Minimum Distributions (RMDs) for 2020
NOTICE TO ACCOUNT HOLDERS

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), required minimum distributions (RMDs) for 2020 have been waived for IRAs and retirement plans, including beneficiaries with inherited accounts. This waiver includes RMDs for individuals who turned age 70 ½ in 2019 and took their first RMD in 2020.

In accordance with the directive of the CARES Act and in an effort to preserve long-term retirement savings, PenChecks Trust will not be automatically processing RMDs from Automatic Rollover and Missing Participant IRA Accounts for 2020. If you previously received a Form 5498 in early 2020 that indicated an RMD was required from your account for 2020, the relief provided by the CARES Act has superseded that notice and PenChecks has accordingly suspended RMD activity on your account for the 2020 tax year.

Please Note: PenChecks Trust Automatic Rollover and Missing Participant IRA Accounts that contain Roth funds do not require withdrawals until after the death of the owner.

If you have questions about RMDs from your IRA or your account, in general, please contact PenChecks Trust at 800-541-3938.
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