29 C.F.R. § 2550.404a-2

By using this site, users agree to the Terms of Use on the Welcome page.

Safe harbor for automatic rollovers to individual retirement plans.

CFR 2013 annual edition (revised as of 2013-07-01) · superseded Jul 1, 2014 · last amended by 69 FR 58028, Sept. 28, 2004

PrintCompare dates Ask AI about this section Official source ↗

(a) In general. (1) Pursuant to section 657(c) of the Economic Growth and Tax Relief Reconciliation Act of 2001, Public Law 107-16, June 7, 2001, 115 Stat. 38, this section provides a safe harbor under which a fiduciary of an employee pension benefit plan subject to Title I of the Employee Retirement Income Security Act of 1974, as amended (the Act), 29 U.S.C. 1001 et seq., will be deemed to have satisfied his or her fiduciary duties under section 404(a) of the Act in connection with an automatic rollover of a mandatory distribution described in section 401(a)(31)(B) of the Internal Revenue Code of 1986, as amended (the Code). This section also provides a safe harbor for certain other mandatory distributions not described in section 401(a)(31)(B) of the Code.

(2) The standards set forth in this section apply solely for purposes of determining whether a fiduciary meets the requirements of this safe harbor. Such standards are not intended to be the exclusive means by which a fiduciary might satisfy his or her responsibilities under the Act with respect to rollovers of mandatory distributions described in paragraphs (c) and (d) of this section.

(b) Safe harbor. A fiduciary that meets the conditions of paragraph (c) or paragraph (d) of this section is deemed to have satisfied his or her duties under section 404(a) of the Act with respect to both the selection of an individual retirement plan provider and the investment of funds in connection with the rollover of mandatory distributions described in those paragraphs to an individual retirement plan, within the meaning of section 7701(a)(37) of the Code.

(c) Conditions. With respect to an automatic rollover of a mandatory distribution described in section 401(a)(31)(B) of the Code, a fiduciary shall qualify for the safe harbor described in paragraph (b) of this section if:

(1) The present value of the nonforfeitable accrued benefit, as determined under section 411(a)(11) of the Code, does not exceed the maximum amount under section 401(a)(31)(B) of the Code;

(2) The mandatory distribution is to an individual retirement plan within the meaning of section 7701(a)(37) of the Code;

(3) In connection with the distribution of rolled-over funds to an individual retirement plan, the fiduciary enters into a written agreement with an individual retirement plan provider that provides:

(i) The rolled-over funds shall be invested in an investment product designed to preserve principal and provide a reasonable rate of return, whether or not such return is guaranteed, consistent with liquidity;

(ii) For purposes of paragraph (c)(3)(i) of this section, the investment product selected for the rolled-over funds shall seek to maintain, over the term of the investment, the dollar value that is equal to the amount invested in the product by the individual retirement plan;

(iii) The investment product selected for the rolled-over funds shall be offered by a state or federally regulated financial institution, which shall be: A bank or savings association, the deposits of which are insured by the Federal Deposit Insurance Corporation; a credit union, the member accounts of which are insured within the meaning of section 101(7) of the Federal Credit Union Act; an insurance company, the products of which are protected by State guaranty associations; or an investment company registered under the Investment Company Act of 1940;

(iv) All fees and expenses attendant to an individual retirement plan, including investments of such plan, (e.g., establishment charges, maintenance fees, investment expenses, termination costs and surrender charges) shall not exceed the fees and expenses charged by the individual retirement plan provider for comparable individual retirement plans established for reasons other than the receipt of a rollover distribution subject to the provisions of section 401(a)(31)(B) of the Code; and

(v) The participant on whose behalf the fiduciary makes an automatic rollover shall have the right to enforce the terms of the contractual agreement establishing the individual retirement plan, with regard to his or her rolled-over funds, against the individual retirement plan provider.

(4) Participants have been furnished a summary plan description, or a summary of material modifications, that describes the plan's automatic rollover provisions effectuating the requirements of section 401(a)(31)(B) of the Code, including an explanation that the mandatory distribution will be invested in an investment product designed to preserve principal and provide a reasonable rate of return and liquidity, a statement indicating how fees and expenses attendant to the individual retirement plan will be allocated (i.e., the extent to which expenses will be borne by the account holder alone or shared with the distributing plan or plan sponsor), and the name, address and phone number of a plan contact (to the extent not otherwise provided in the summary plan description or summary of material modifications) for further information concerning the plan's automatic rollover provisions, the individual retirement plan provider and the fees and expenses attendant to the individual retirement plan; and

(5) Both the fiduciary's selection of an individual retirement plan and the investment of funds would not result in a prohibited transaction under section 406 of the Act, unless such actions are exempted from the prohibited transaction provisions by a prohibited transaction exemption issued pursuant to section 408(a) of the Act.

(d) Mandatory distributions of $1,000 or less. A fiduciary shall qualify for the protection afforded by the safe harbor described in paragraph (b) of this section with respect to a mandatory distribution of one thousand dollars ($1,000) or less described in section 411(a)(11) of the Code, provided there is no affirmative distribution election by the participant and the fiduciary makes a rollover distribution of such amount into an individual retirement plan on behalf of such participant in accordance with the conditions described in paragraph (c) of this section, without regard to the fact that such rollover is not described in section 401(a)(31)(B) of the Code.

(e) Effective date. This section shall be effective and shall apply to any rollover of a mandatory distribution made on or after March 28, 2005.

Source credit, amendments & notes

[69 FR 58028, Sept. 28, 2004]

29 C.F.R. § 2550.404a-2 — Safe harbor for automatic rollovers to individual retirement plans. · CFR 2013 annual edition (revised as of 2013-07-01) · https://pensionresource.website/EAMain?content=EAMain.Law&id=cfr29-2550.404a-2&asof=2011-03-15 · printed Oct 16, 2026

Implements

ERISA § 404 (29 U.S.C. § 1104) Fiduciary duties

Guidance addressing this section

No documents are primarily about this section.

Also cited in 21 other documents

Department of Labor (EBSA)

Proposed Rules

91 FR 16088Proposed Mar 31, 2026 — Fiduciary Duties in Selecting Designated Investment Alternatives Comments due Jun 1, 2026
91 FR 4348Proposed Jan 30, 2026 — Improving Transparency Into Pharmacy Benefit Manager Fee Disclosure Comments due Mar 31, 2026
89 FR 5624Proposed Jan 29, 2024 — Automatic Portability Transaction Regulations Comments due Mar 29, 2024 (c)(3)(i)(d)
86 FR 57272Proposed Oct 14, 2021 — Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights Comments due Dec 13, 2021
85 FR 55219Proposed Sep 4, 2020 — Fiduciary Duties Regarding Proxy Voting and Shareholder Rights Comments due Oct 5, 2020
85 FR 39113Proposed Jun 30, 2020 — Financial Factors in Selecting Plan Investments Comments due Jul 30, 2020
77 FR 74063Proposed Dec 12, 2012 — Amendments to the Abandoned Plan Regulations Comments due Feb 11, 2013
76 FR 31544Proposed Jun 1, 2011 — Requirements for Fee Disclosure to Plan Fiduciaries and Participants-Applicability Dates Comments due Jun 15, 2011
75 FR 9360Proposed Mar 2, 2010 — Investment Advice-Participants and Beneficiaries Comments due May 5, 2010

Final Rules

90 FR 28009 Jul 1, 2025 — Removal of Definition of “Plan Assets”-Insurance Company General Accounts
90 FR 28007 Jul 1, 2025 — Selection of Annuity Providers-Safe Harbor for Individual Account Plans
89 FR 43636 May 17, 2024 — Abandoned Plan Regulations
87 FR 73822 Dec 1, 2022 — Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights
85 FR 81658 Dec 16, 2020 — Fiduciary Duties Regarding Proxy Voting and Shareholder Rights
85 FR 72846 Nov 13, 2020 — Financial Factors in Selecting Plan Investments
80 FR 14301 Mar 19, 2015 — Fiduciary Requirements for Disclosure in Participant-Directed Individual Account Plans-Timing of Annual Disclosure
76 FR 66136 Oct 25, 2011 — Investment Advice-Participants and Beneficiaries
76 FR 42539 Jul 19, 2011 — Requirements for Fee Disclosure to Plan Fiduciaries and Participants-Applicability Dates
75 FR 41600 Jul 16, 2010 — Reasonable Contract or Arrangement Under Section 408(b)(2)-Fee Disclosure

IRS / Treasury

Notices

Notice 2005-95 Dec 19, 2005 — Plan amendments; retroactive annuity starting date; elective deferrals. This notice clarifies the interaction of the amendment timing deadlines for plans quali…
Notice 2005-5 Jan 18, 2005 — Automatic rollover; section 657 of Economic Growth Tax Relief and Reconciliation Act of 2001. This notice provides guidance in question and answer format on th… (c)

Tax Court (1) · DOL/Federal (0)

U.S. Tax Court (1)

Also cite this provision (1)

Christy & Swan Profit Sharing Plan v. Commissioner, T.C. Memo. 2011-62 U.S. Tax Court · Mar 15, 2011
Cites (e) · Text when decided

No private letter rulings in the library cite this provision yet.

Each row is a version of the text as published by the official source. Code dates are the edition/release point that first reflected the change; regulation dates are eCFR effective dates. The library checks the official sources automatically, so new versions appear here on their own; “run” opens the sync that recorded a version.

Effective	Through	Source	Amended by
Jul 1, 2005	Jun 30, 2014	CFR 2013 annual edition (revised as of 2013-07-01) run 127	69 FR 58028, Sept. 28, 2004	View
Jul 1, 2014	current	eCFR amendment effective 2017-01-01 run 2	69 FR 58028, Sept. 28, 2004	View · Redline (sign in)

Provision-level history (blame)