IRS Updates 402(f) Rollover Notices to Close Compliance Gaps

Plan administrators using outdated 402(f) language face compliance failures and potential lawsuits from participants challenging payouts. The IRS released Notice 2026-13, which updates the safe harbor 402(f) model explanations for eligible rollover distributions. Section 402(f) requires that a written explanation be furnished to any participant or beneficiary eligible for a rollover distribution within a reasonable period of time before the distribution is paid. The updated model notices now provide separate notices for non-Roth and designated Roth accounts. They incorporate expanded exceptions to the 10% early withdrawal penalty under SECURE 2.0 and reflect changes to required minimum distribution rules, including updated RMD ages and special surviving spouse provisions. Outdated 402(f) language is a preventable compliance failure.