To complete a Prudential rollover, request a direct trustee-to-trustee transfer through Empower, which now administers Prudential’s retirement accounts, and have the funds sent straight to your new IRA or employer plan without passing through your hands. That single choice avoids the mandatory 20% federal tax withholding, sidesteps the 60-day deadline, and keeps your savings tax-deferred. Everything else is paperwork.
Your Account Is Now Administered by Empower
Empower Annuity Insurance Company of America acquired Prudential’s full-service retirement business on April 1, 2022.1Empower. Prudential Participants Migration If you have a Prudential 401(k), 403(b), or similar workplace plan, your account is administered by Empower even though the online portal likely still lives at retirement.prudential.com and the statements may still carry Prudential branding.
This matters because old paperwork you may have on file — distribution forms, fax numbers, mailing addresses — can be out of date. Before filling out anything, log in at retirement.prudential.com or call Empower’s retirement services line at 877-630-4015 to confirm you have the current distribution or rollover request form and the correct submission address.2Empower. Contact Us
Direct Rollover or Indirect Rollover
Every rollover starts here, and the answer is almost always the direct rollover.
In a direct rollover, Empower sends the money straight to the new custodian. The funds never touch your bank account, the 20% mandatory federal withholding does not apply, and you face no deadline because you never possess the money.3Internal Revenue Service. Topic No. 413, Rollovers From Retirement Plans
In an indirect rollover, the plan pays you first, and you have 60 calendar days to deposit the money into another eligible retirement account. For distributions from an employer-sponsored plan like a 401(k), the administrator must withhold 20% for federal income tax before cutting the check.3Internal Revenue Service. Topic No. 413, Rollovers From Retirement Plans So if your balance is $100,000, you receive $80,000. To complete a fully tax-free rollover, you still have to deposit the entire $100,000 within 60 days, covering the $20,000 gap from your own pocket. You recover the withheld amount as a tax credit when you file, but you need the cash upfront.
If the full gross amount isn’t deposited by day 60, the shortfall is treated as a taxable distribution. If you’re under 59½, a 10% early withdrawal penalty applies on top of the income tax.4Internal Revenue Service. Retirement Topics – Exceptions to Tax on Early Distributions
IRA-to-IRA Transfers Have Different Withholding
The 20% mandatory withholding applies only to distributions from employer-sponsored plans. If you’re rolling a traditional IRA held with Prudential/Empower into another IRA, the default federal withholding is 10% and you can elect to waive it entirely. The 60-day deadline still applies to indirect IRA rollovers.
The One-Rollover-Per-Year Rule
For indirect IRA-to-IRA rollovers, you can only complete one in any 12-month period across all your IRAs combined. The IRS treats your traditional, Roth, SEP, and SIMPLE IRAs as a single pool for this limit.5Internal Revenue Service. Rollovers of Retirement Plan and IRA Distributions Violating the rule turns the second rollover into a taxable distribution and can trigger a 6% excess contribution penalty each year the money stays in the receiving IRA.
Direct trustee-to-trustee transfers don’t count toward this limit. Neither do rollovers between employer plans and IRAs, or Roth conversions.5Internal Revenue Service. Rollovers of Retirement Plan and IRA Distributions Another reason to stick with a direct transfer.
Which Accounts Can Roll Into Which
Not every plan can accept funds from every other type. The IRS publishes a rollover eligibility chart that maps the permissible combinations.6Internal Revenue Service. Rollover Chart The common Prudential/Empower moves:
- 401(k) to traditional IRA: allowed, and the most common choice when leaving an employer.
- 401(k) to a new employer’s 401(k): allowed if the receiving plan accepts incoming rollovers. Not all do.
- 403(b) to traditional IRA: allowed.
- Traditional IRA to 401(k): allowed if the receiving plan permits it. Useful for clearing pre-tax IRA balances before a backdoor Roth conversion.
- Roth 401(k) to Roth IRA: allowed. The Roth IRA is the only IRA type that can receive Roth employer plan money.
- Roth IRA to 401(k): not allowed. Roth IRAs can only roll into other Roth IRAs.
Before initiating anything, confirm with the receiving institution that they accept the specific rollover you’re planning. A rejected incoming transfer can leave your funds in limbo.
Submitting the Rollover
Once you’ve chosen a direct rollover and the receiving account is open, here’s what the process looks like.
Gather Your Information
You’ll need your Empower/Prudential account number, plan number (for employer plans), and Social Security number. From the receiving institution, collect the custodian’s full legal name, mailing address, account number, and any routing details for electronic transfers. Ask specifically how the incoming check should be formatted; some custodians have particular requirements.
Complete the Distribution Form
The primary document is a Distribution/Rollover Request Form, available through your online account or by calling Empower. A few fields deserve extra attention.
- Designate “Direct Rollover.” This is the field that prevents 20% withholding. Leave it blank or select the wrong option and the plan will treat the distribution as paid to you.
- Specify the amount. You can roll all or part of the balance.
- Separate pre-tax and Roth money. If your account holds both, the form should route each to the correct account type at the receiving institution. Rolling Roth dollars into a traditional IRA (or vice versa) creates a tax problem that’s difficult to unwind.
- Name the receiving custodian. The check must be payable to the new custodian “FBO [Your Name]” (for benefit of). If it’s made payable to you personally, it becomes an indirect rollover.
Check every field, especially account numbers and the custodian’s legal name. A mismatched signature or wrong account number will bounce the form back and add weeks to the process.
Submit and Follow Up
Empower accepts rollover paperwork through its online portal, by fax, or by mail. Processing runs from a few business days for electronic transfers to several weeks for check disbursements. If your plan requires a former employer’s authorization, common with 401(k) plans, that adds another step.
If the transfer arrives as a physical check mailed to you and made payable to the new custodian, forward it immediately to the receiving institution’s rollover processing address, which is often different from their general mailing address. The 60-day clock technically doesn’t apply to direct rollovers, but delays invite complications. Checks can expire, accounts can be closed, and processing queues run on their own schedule.
If two weeks pass without confirmation, call both Empower and the receiving institution. Making sure the money arrives and gets invested is your responsibility.
Situations That Change the Math
Take Your RMD First
If you’ve reached your required minimum distribution age, you cannot roll over the portion of a distribution that satisfies your RMD for the year. RMDs are not eligible rollover distributions.7Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs The plan must pay the RMD to you before rolling over the rest.
Under SECURE 2.0, RMD age depends on birth year: 73 if you were born between 1951 and 1959, and 75 if you were born in 1960 or later.8Congress.gov. Required Minimum Distribution (RMD) Rules for Original Owners Take the current-year RMD before initiating the rollover. Otherwise you’ll have to pull that amount back out of the new account.
Outstanding 401(k) Loans
If you have an unpaid loan against your 401(k) and separate from the employer, the outstanding balance is typically treated as a distribution called a plan loan offset. That amount is taxable income unless rolled into another eligible plan or IRA.
For qualified plan loan offset amounts triggered by employment separation or plan termination, the deadline is extended. Instead of 60 days, you have until your tax filing due date (including extensions) for the year the offset occurs to complete the rollover.9Federal Register. Rollover Rules for Qualified Plan Loan Offset Amounts A 2026 offset gives you until April 15, 2027, or October 15, 2027 with an extension. If you don’t roll the offset amount, it becomes taxable income, and the 10% early withdrawal penalty applies if you’re under 59½. When possible, pay off the loan before starting the rollover.
Employer Stock in the Account
If your Prudential/Empower 401(k) holds shares of your employer’s stock, rolling them into an IRA can cost you money. A tax provision called Net Unrealized Appreciation (NUA) lets you pay long-term capital gains rates on the stock’s growth instead of ordinary income rates, but only if you take the shares out of the plan as actual stock, not as cash and not rolled into an IRA.10Internal Revenue Service. Net Unrealized Appreciation in Employer Securities Notice 98-24
To qualify, you need a lump-sum distribution of the entire plan balance triggered by a qualifying event: separation from service, reaching 59½, disability, or death. The employer stock goes in kind to a taxable brokerage account, and the rest of the balance can roll to an IRA. You pay ordinary income tax on the stock’s original cost basis at distribution. When you later sell, the appreciation is taxed at long-term capital gains rates regardless of holding period after distribution.
The gap between ordinary rates (up to 37%) and long-term capital gains rates (0%, 15%, or 20%) can be significant on highly appreciated stock. Once shares land in an IRA, NUA eligibility is gone permanently. Talk to a tax advisor before rolling employer stock into an IRA.
Roth Rollovers and the Five-Year Rule
Rolling a Roth 401(k) into a Roth IRA is straightforward on paper, but the timing catches people off guard. The five-year clock for qualified Roth IRA distributions runs from when you first funded any Roth IRA, not from when your Roth 401(k) was established.
If you’ve had a Roth IRA open for at least five years before the rollover, the rolled-over funds immediately qualify for tax-free withdrawal once you’re 59½ or older. If you’ve never had a Roth IRA, the clock starts on January 1 of the year you open one to receive the rollover, even if your Roth 401(k) had been open for a decade. Earnings withdrawn during those five years could be taxable. If you’re nearing retirement and don’t yet have a Roth IRA, opening and funding one now, even with a small contribution, starts the clock.
The Pro-Rata Rule for Mixed IRA Balances
Rolling a traditional 401(k) into a traditional IRA that already contains nondeductible (after-tax) contributions triggers the pro-rata rule for future distributions and conversions. The IRS doesn’t let you cherry-pick which dollars come out. Every distribution is treated as a proportional mix of your pre-tax and after-tax balances across all your traditional, SEP, and SIMPLE IRAs combined.11Internal Revenue Service. Instructions for Form 8606
This hits hardest on backdoor Roth conversions. Roll a $200,000 pre-tax 401(k) into a traditional IRA that already holds $10,000 in after-tax contributions, and your after-tax percentage drops from 100% to under 5%. A subsequent Roth conversion would be almost entirely taxable. If backdoor Roths are part of your plan, consider rolling the 401(k) into a new employer’s plan instead of an IRA, keeping the IRA balance clean. The calculation uses your December 31 IRA balance for the conversion year, so timing matters.
Tax Forms After the Rollover
Two IRS forms document a completed rollover.
Form 1099-R From Empower
Empower issues Form 1099-R to report the distribution. For a direct rollover, Box 7 shows distribution code G, telling the IRS the funds went straight to another eligible plan and no tax is due.12Internal Revenue Service. Instructions for Forms 1099-R and 5498 Box 1 shows the gross distribution, and Box 2a (taxable amount) should be zero or blank.
For an indirect rollover, Box 7 shows Code 1 if you’re under 59½ or Code 7 if older, and Box 4 reflects the 20% federal withholding. When filing, you report the gross distribution from Box 1 and indicate the full amount was rolled over so it isn’t taxed. Expect Form 1099-R by January 31 of the year after the distribution.13Internal Revenue Service. About Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.
Form 5498 From the Receiving Institution
The custodian receiving the rollover issues Form 5498 to confirm the contribution. Box 2 reports the rollover amount received.14Internal Revenue Service. Form 5498, IRA Contribution Information This form doesn’t arrive until late May or early June of the following year, after most people have filed, because it covers contributions made through the tax filing deadline.15Internal Revenue Service. Instructions for Forms 1099-R and 5498 (2025) You don’t need to wait for it to file, but keep it with your records. Code G on the 1099-R paired with the rollover amount on the 5498 is your proof the transfer was tax-free.
If You Miss the 60-Day Deadline
If you chose an indirect rollover and 60 days slip by, you’re not necessarily out of options. Under Revenue Procedure 2020-46, the IRS allows self-certification. You complete a model letter certifying that you missed the deadline for one of several qualifying reasons — serious illness, a family death, a postal error, a deposit into the wrong account, or the distribution being frozen by a financial institution — and submit it to the receiving plan or IRA trustee.16Internal Revenue Service. Accepting Late Rollover Contributions
The receiving institution can accept the late rollover based on your certification alone, without an IRS private letter ruling, as long as they have no reason to believe the certification is false. This isn’t a blanket extension for procrastination; the qualifying reasons are specific. But when a legitimate circumstance caused the delay, self-certification can save you from a substantial tax bill. Better still, use a direct rollover from the start and no deadline applies.