NU Online News Service, Feb. 18, 2005, 4:45 p.m. EST
A federal savings bank owned by a Des Moines, Iowa, insurer has introduced a program that can help employers clean up their retirement plans.[@@]
The bank, Principal Bank, a unit of Principal Financial Group Inc., is offering individual retirement accounts designed for workers who leave employers without telling employers what to do about small 401(k) plan balances.
The Economic Growth and Tax Relief Reconciliation Act of 2001 included a provision authorizing employers to roll plan balances into IRAs. The provision affects plans with balances of $1,000 to $5,000./
The U.S. Department of Labor completed the regulations that employers need to use the law in September 2004. The regulations take effect March 28.
The Principal Bank Safe Harbor Harbor IRA charges an annual fee of just $15 and does not impose any transaction or investment fees, Principal says.
Workers who call about their IRAs can take the cash out or have the cash shifted into other retirement accounts, Principal says.