Sponsor Insights: New IRS Guidance on Distribution Notices

When employees leave an organization, the decisions they make about their retirement plan balance can have lasting consequences. Yet many participants do not fully understand their distribution options or the related tax implications, which can create confusion at an important transition point. 

RPAG highlights that the IRS recently issued Notice 2026-13, which provides updated safe harbor language plan sponsors can use when explaining distribution options under IRC Section 402(f). The guidance includes separate explanations for Roth and non-Roth accounts and is intended to help sponsors meet written notice requirements more clearly and consistently. 

For plan sponsors, this is a good reminder to review current distribution communication practices and confirm participant notices reflect the latest requirements. Clear, timely communication can support better participant understanding while also reinforcing prudent plan administration. 

Read more: https://insights.rpag.com/irs-issues-new-guidance-on-plan-distribution-safe-harbors