Frequently Asked Questions
Definition Questions
What is RolloverSystems?
RolloverSystems, LLC. (RSI) is a financial services company dedicated to providing qualified retirement plan sponsors tools and services necessary to keep employees invested in retirement.
What is a Rollover?
A rollover is a distribution of funds from a qualified retirement plan, such as a
There are two types of rollovers - indirect and direct:
- Indirect rollover - is the process of taking all of the distribution from your previous employer's retirement plan in cash and rolling over all or a part of your distribution to a Rollover IRA or a new employer's retirement plan. In this case 20% of your entire distribution may be withheld by your employer as pre-payment of federal income tax due on the portion not rolled over.
- Direct rollover - (the process used via RolloverSystems) is the process of rolling over 100% of your distribution from your previous employer's retirement plan directly to a Rollover IRA which is managed by the financial institution of the receiving IRA. No taxes are withheld from a direct rollover. RolloverSystems will assist you with a direct rollover where your distribution funds will be transferred to a Rollover IRA managed by a financial institution.
What is an IRA?
An IRA is a tax-deferred retirement account which allows an individual to set aside a certain amount per year with earnings tax-deferred until withdrawals begin at age 59 ½ or later. Only those who do not participate in a pension plan at work or who do participate and meet certain income guidelines can make deductible contributions to an IRA. All others can make contributions to an IRA on a non-deductible basis. The latter type of contribution qualifies as a deduction against income earned that year and interest accumulates tax-deferred until the funds are withdrawn.
What is an authorization form?
An authorization form is a form used by a financial institution that is sent to your former employer indicating that you have given the financial institution permission to receive your retirement plan assets.
What is a distribution form?
A distribution form is a form that your former employer requires to transfer the assets in your company retirement plan account to your new Rollover IRA custodian (the financial institution you have chosen.)
What is a Plan Sponsor?
A Plan Sponsor is an employer who sets up a qualified retirement plan such as a