720MP Roth Application for Lump-Sum Payment Roth

Clarifications to PBGC Form 720MP
for your
Roth Account Only

❖ If you also have a non-Roth account, you will receive another Form 720MP for that account.
❖ There are some special rules that apply to the payment of your Roth Account.
❖ Some of these special rules require clarification of the Form 720MP for payment of Roth Accounts as
follows:

CLARIFICATIONS
Form 720MP Section 2 Payment Election – clarifications applicable to Roth payments underlined
• Introduction: Please read the enclosed Special Tax Notice Regarding Non-Periodic PBGC Payments
From Designated Roth Account. Be sure you understand the tax implications of having PBGC pay
the lump sum directly to you or to a Roth individual retirement arrangement (IRA) or a designated
Roth account in a qualified retirement plan.
Please elect only one option - A or B. If you do not elect an option or if you elect more than
one option, PBGC will pay you according to option B.

•

Option A –for your direct rollover, you may transfer to a Roth IRA or a designated Roth account
in a qualified retirement plan.

•

Option C – Do not elect. The “Split my payment” option is NOT available for your Roth
account payment

•

Last Sentence on page 2: If you selected option A, complete Section D on page 5.

•

D. Rollover Information o Do not elect. Traditional IRA is not available for your Roth Account payment
o Qualified retirement Plan option is to a Roth Account in a qualified retirement plan

Ver: December 2022

Application for
Lump-Sum Payment - Roth Account
Pension Benefit Guaranty Corporation.
P.O. Box 151750, Alexandria, Virginia 22315-1750
Plan Name: FX.PrismCase.CaseTitle.XF
Plan Number: FX.PrismCase.CaseIdNmbr.XF
Date Printed:
Date of Plan Termination: FX.PrismCase.DOPT.XF

PBGC Form 720MP

For assistance, call 1-800-400-7242
Participant Name: FX.PrismCust.FullName.XF

INSTRUCTIONS: Use this form to request a lump-sum payment. As proof of your date of birth, enclose a copy
of your birth or baptism certificate, or U.S. Passport. If you are a deceased participant’s spouse, enclose a
copy of your marriage certificate if you have not already sent it to us. Please make sure that proof documents
are legible before sending to PBGC. If you have questions about other documents we accept as proof, call our
Customer Contact Center at 1-800-400-7242. Print clearly with blue or black ink.

1. General information about you
Last Name

First Name

Middle Name

Other Last Name(s) Used

Social Security Number

Date of Birth

-

-

/

(Copy of Proof Required)

Gender

/

Mailing Address

Apartment / Route Number

City

State

Country

Province

Daytime Phone

(

-



FEMALE



Zip Code

Evening Phone

Extension

)

MALE

x

(

)

If you are the participant and worked after the date the plan terminated, what year
did you stop working for the employer who sponsored your pension plan?

Year



CONTINUE ON BACK

Approved OMB 1212-0055
Expires 8/31/2024

Application for Lump-Sum Payment – Roth Account

Form 720MP, page 2 of 4

Plan Number: FX.PrismCase.CaseIdNmbr.XF

Participant Name: FX.PrismCust.FullName.XF

2. Payment Election – Please read the enclosed Special Tax Notice Regarding Non-Periodic PBGC Payments.
Be sure you understand the tax implications of having PBGC pay the lump sum directly to you or to an
individual retirement arrangement (IRA) or a qualified retirement plan.
Please elect only one option - A or B or C. If you do not elect an option or if you elect more than one
option, PBGC will pay you according to option B.
A. Roll over my payment to an IRA or a plan – Send my entire payment, plus
interest, directly to an IRA or a qualified retirement plan. I understand that PBGC
will not withhold taxes from my payment.



B. Pay me directly – Send the entire payment, plus interest, directly to me. I
understand that PBGC will withhold 20% of the taxable amount of my payment for
federal income tax.



*Complete Section E if you want the payment to be sent directly to your bank
account.



C. Split my payment - Send some of the money, plus interest, directly to me,
and send some directly to an IRA or a qualified retirement plan, as follows:

1. Send this much directly to me:

$

.

$

.

I understand that PBGC will withhold 20% of the taxable amount for
federal income tax.
*Complete Section E if you want the payment to be sent directly to your
bank account.
2. Send this much to an IRA or a qualified retirement plan.
I understand that PBGC will not withhold taxes from this part of my
payment.
Note: the amount must be at least $500.

*Note: PBGC does not transfer funds to financial institutions outside the United States and its territories. If you live
outside the United States or its territories and do not have a U.S bank account, PBGC will send your payment to your
mailing address.

If you elected option A or C, complete Section D on page 3.
PLEASE SIGN THE FORM ON PAGE 4.



CONTINUE

Application for Lump-Sum Payment – Roth Account
Plan Number: FX.PrismCase.CaseIdNmbr.XF

Form 720MP, page 3 of 4
Participant Name : FX.PrismCust.FullName.XF

Payment Election (Continued)
D. Rollover Information

Name of IRA or Plan:
Type of IRA or Plan:



Traditional IRA



Roth IRA



Qualified retirement plan

Account Number
Name of the Institution / Trustee

Daytime Phone

(

)

-

Mailing Address
City

State

Zip Code

-

E. Direct Payment Information Only. Complete this section to send your payment directly to
your bank.
All fields required
Name(s) on the Account (Your name must be on the account)

Routing Number*

Account Number – Numbers only

Account Type
Checking
Savings


*This nine-digit number is on the lower left side of your check.
CONTINUE ON BACK





Application for Lump-Sum Payment - Roth Account
Plan Number: FX.PrismCase.CaseIdNmbr.XF

Form 720MP, page 4 of 4
Participant Name : FX.PrismCust.FullName.XF

3. Signature – Sign and date this application in the presence of or acknowledged by a Notary Public. Knowingly
and willfully making false, fictitious or fraudulent statements to the Pension Benefit Guaranty Corporation is a
crime punishable under Title 18, Section 1001, United States Code.
I declare under penalty of perjury that all of the information I have provided on this form is true and
correct.

SIGNATURE

DATE

To be completed by Notary Public:
Subscribed and sworn to before me this __________________ day of ____________________, Year______
DATE MY COMMISSION EXPIRES

NOTARY PUBLIC NAME

CITY / COUNTY

STATE

SPECIAL TAX NOTICE REGARDING NON-PERIODIC PBGC PAYMENTS
from Designated Roth Account
YOUR ROLLOVER OPTIONS

You are receiving this notice because you are receiving a payment from PBGC, and all or part of it is
eligible to be rolled over to a Roth IRA or a designated Roth account in an employer plan. This notice
is intended to help you decide whether to do a rollover.
This notice describes the rollover rules that apply to payments from PBGC that are from a designated
Roth account. If you also receive a PBGC payment that is not from a designated Roth account,
PBGC will send you a different notice for that payment and will tell you the amount that is being paid
from each account.
Rules that apply to most payments from a designated Roth account are described in the “General
Information About Rollovers” section. Special rules that only apply in certain circumstances are
described in the “Special Rules and Options” section.
GENERAL INFORMATION ABOUT ROLLOVERS
How can a rollover affect my taxes?
After-tax contributions included in a payment from a designated Roth account are not taxed, but
earnings might be taxed. The tax treatment of earnings included in the payment depends on whether
the payment is a qualified distribution or a nonqualified distribution.
A qualified distribution from a designated Roth account is a payment made after you are age
59½ (or after your death or disability) and after you have had a designated Roth account for at least 5
years. In applying the 5-year rule, you count from January 1 of the year when you made your first
contribution to the designated Roth account. However, because the transfer of your account to PBGC
was accomplished through a direct rollover from a designated Roth account in an employer plan, your
participation will count from January 1 of the year your first contribution was made to the designated
Roth account transferred to PBGC, or, if earlier, to the designated Roth account in another employer
plan (if applicable to this account).
If the payment is a qualified distribution, you will not be taxed on any part of the payment even if you
do not do a rollover. If you do a rollover, you will not be taxed on the payment and any earnings on
the payment will not be taxed if paid later in a qualified distribution.
Nonqualified distribution from a designated Roth account If the payment is not a qualified
distribution and you do not do a rollover to a Roth IRA or a designated Roth account in an employer
plan, you will be taxed on the earnings in the payment. If you are under age 59½, a 10% additional
income tax on early distributions (generally, distributions made before age 59½) will also apply to the
earnings (unless an exception applies). However, if you do a rollover, you will not have to pay taxes
currently on the earnings and you will not have to pay taxes later on payments that are qualified
distributions.
What types of retirement accounts and plans may accept my rollover?
You may roll over the payment to either a Roth IRA (a Roth individual retirement account or Roth
individual retirement annuity) or a designated Roth account in an employer plan (a tax-qualified plan,
section 403(b) plan, or governmental section 457 plan) that will accept the rollover. The rules of the
Roth IRA or employer plan that holds the rollover will determine your investment options, fees, and
rights to payment from the Roth IRA or employer plan. (For example, no spousal consent rules apply
to Roth IRAs, and Roth IRAs may not provide loans.) In addition, the amount rolled over will be
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SPECIAL TAX NOTICE REGARDING NON-PERIODIC PBGC PAYMENTS
from Designated Roth Account
subject to the tax rules that apply to the Roth IRA or the designated Roth account in the employer
plan. In general, these tax rules are similar to those described elsewhere in this notice, but
differences include:
•
•

•

If you do a rollover to a Roth IRA, all of your Roth IRAs will be considered for purposes of
determining whether you have satisfied the 5-year rule (counting from January 1 of the year
for which your first contribution was made to any of your Roth IRAs).
If you do a rollover to a Roth IRA, you will not be required to take a distribution from the Roth
IRA during your lifetime and you must keep track of the aggregate amount of the after-tax
contributions in all of your Roth IRAs (in order to determine your taxable income for later Roth
IRA payments that are not qualified distributions).
Eligible rollover distributions from a Roth IRA can only be rolled over to another Roth IRA.

How do I do a rollover?
There are two ways to do a rollover. You can either do a direct rollover or a 60-day rollover.
Direct rollover option: If you do a direct rollover, PBGC will make the payment directly to your Roth
IRA or designated Roth account in an employer plan. You should contact the Roth IRA sponsor or the
administrator of the employer plan for information on how to do a direct rollover.
60-day rollover option: If you do not do a direct rollover, you may still do a rollover by making a
deposit (generally within 60 days) into a Roth IRA, whether the payment is a qualified or nonqualified
distribution. In addition, you can do a rollover by making a deposit within 60 days into a designated
Roth account in an employer plan if the payment is a nonqualified distribution and the rollover does
not exceed the amount of the earnings in the payment.
You cannot do a 60-day rollover to an employer plan of any part of a qualified distribution. If you
receive a distribution that is a nonqualified distribution and you do not roll over an amount at least
equal to the earnings allocable to the distribution, you will be taxed on the amount of those earnings
not rolled over, including the 10% additional income tax on early distributions if you are under age
59½ (unless an exception applies).
If you do not do a direct rollover and the payment is not a qualified distribution, PBGC is required to
withhold 20% of the earnings for federal income taxes. This means that, in order to roll over the entire
payment in a 60-day rollover to a Roth IRA, you must use other funds to make up for the 20%
withheld.
How much may I roll over?
If you wish to do a rollover, you must roll over all of the amount eligible for rollover. Any payment is
eligible for rollover, except:
•
•

Certain payments spread over a period of at least 10 years or over your life or life expectancy
(or the lives or joint life expectancy of you and your beneficiary); and
Required minimum distributions after age 72 (age 70½ if you were born before July 1, 1949)
or after death.

PBGC can tell you what portion of a payment is eligible for rollover.
If I don’t do a rollover, will I have to pay the 10% additional income tax on early distributions?
If a payment is not a qualified distribution and you are under age 59½, you will have to pay the 10%
additional income tax on early distributions with respect to the earnings allocated to the payment that
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SPECIAL TAX NOTICE REGARDING NON-PERIODIC PBGC PAYMENTS
from Designated Roth Account
you do not roll over (including amounts withheld for income tax), unless one of the exceptions listed
below applies. This tax is in addition to the regular income tax on the earnings not rolled over.
The 10% additional income tax does not apply to the following payments:
•
•
•
•
•
•
•
•
•

Payments made after you separate from service if you will be at least age 55 in the year of the
separation;
Payments that start after you separate from service if paid at least annually in equal or close to
equal amounts over your life or life expectancy (or the lives or joint life expectancy of you and
your beneficiary);
Payments made due to disability;
Payments after the death of the plan participant;
Payments made directly to the government to satisfy a federal tax levy;
Payments made under a qualified domestic relations order (QDRO);
Payments up to the amount of your deductible medical expenses (without regard to whether you
itemize deductions for the taxable year);
Certain payments made while you are on active duty if you were a member of a reserve
component called to duty after September 11, 2001 for more than 179 days; and
Payments for certain distributions relating to certain federally declared disasters.

If I do a rollover to a Roth IRA, will the 10% additional income tax apply to early distributions
from the IRA?
If you receive a payment from a Roth IRA when you are under age 59½, you will have to pay the 10%
additional income tax on early distributions on the earnings paid from the Roth IRA, unless an
exception applies or the payment is a qualified distribution. In general, the exceptions to the 10%
additional income tax for early distributions from a Roth IRA listed above are the same as the
exceptions for early distributions from a plan. However, there are a few differences for payments from
a Roth IRA, including:
•
•
•
•

The exception for payments made after you separate from service if you will be at least age 55 in
the year of the separation (or age 50 for qualified public safety employees) does not apply.
The exception for qualified domestic relations orders (QDROs) does not apply (although a special
rule applies under which, as part of a divorce or separation agreement, a tax-free transfer may be
made directly to a Roth IRA of a spouse or former spouse).
The exception for payments made at least annually in equal or close to equal amounts over a
specified period applies without regard to whether you have had a separation from service.
There are additional exceptions for (1) payments for qualified higher education expenses, (2)
payments up to $10,000 used in a qualified first-time home purchase, and (3) payments for health
insurance premiums after you have received unemployment compensation for 12 consecutive
weeks (or would have been eligible to receive unemployment compensation but for self-employed
status).

Will I owe state income taxes?
This notice does not describe any state or local income tax rules (including withholding rules).

SPECIAL RULES AND OPTIONS
If you miss the 60-day rollover deadline
Generally, the 60-day rollover deadline cannot be extended. However, the IRS has the limited
authority to waive the deadline under certain extraordinary circumstances, such as when external
events prevented you from completing the rollover by the 60-day rollover deadline. Under certain
circumstances, you may claim eligibility for a waiver of the 60-day rollover deadline by making a
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SPECIAL TAX NOTICE REGARDING NON-PERIODIC PBGC PAYMENTS
from Designated Roth Account
written self-certification. Otherwise, to apply for a waiver from the IRS, you must file a private letter
ruling request with the IRS. Private letter ruling requests require the payment of a nonrefundable user
fee. For more information, see IRS Publication 590-A, Contributions to Individual Retirement
Arrangements (IRAs).
If you receive a nonqualified distribution and you were born on or before January 1, 1936
If you were born on or before January 1, 1936, and receive a lump sum distribution that is not a
qualified distribution and that you do not roll over, special rules for calculating the amount of the tax
on the earnings in the payment might apply to you. For more information, see IRS Publication 575,
Pension and Annuity Income.
If you are not a participant

Payments after death of the participant. If you receive a distribution after the participant’s death
that you do not roll over, the distribution will generally be taxed in the same manner described
elsewhere in this notice. However, whether the payment is a qualified distribution generally depends
on when the participant first made a contribution to the designated Roth account. Also, the 10%
additional income tax on early distributions and the special rules for public safety officers do not
apply, and the special rule described under the section “If you receive a nonqualified distribution and
you were born on or before January 1, 1936” applies only if the participant was born on or before
January 1, 1936.
If you are a surviving spouse. If you receive a payment as the surviving spouse of a
deceased participant, you have the same rollover options that the participant would have had,
as described elsewhere in this notice. In addition, if you choose to do a rollover to a Roth IRA,
you may treat the Roth IRA as your own or as an inherited Roth IRA.
A Roth IRA you treat as your own is treated like any other Roth IRA of yours, so that you will
not have to receive any required minimum distributions during your lifetime and earnings paid
to you in a nonqualified distribution before you are age 59½ will be subject to the 10%
additional income tax on early distributions (unless an exception applies).
If you treat the Roth IRA as an inherited Roth IRA, payments from the Roth IRA will not be
subject to the 10% additional income tax on early distributions. An inherited Roth IRA is
subject to required minimum distributions. If the participant had started taking required
minimum distributions from the Plan, you will have to receive required minimum distributions
from the inherited Roth IRA. If the participant had not started taking required minimum
distributions, you will not have to start receiving required minimum distributions from the
inherited Roth IRA until the year the participant would have been age 70½ (if you were born
before July 1, 1949) or age 72 (if you were born after June 30, 1949).
If you are a surviving beneficiary other than a spouse. If you receive a payment because
of the participant’s death and you are a designated beneficiary other than a surviving spouse,
the only rollover option you have is to do a direct rollover to an inherited Roth IRA. Payments
from the inherited Roth IRA, even if made in a nonqualified distribution, will not be subject to
the 10% additional income tax on early distributions. You will have to receive required
minimum distributions from the inherited Roth IRA.
Payments under a qualified domestic relations order (QDRO). If you are the spouse or a
former spouse of the participant who receives a payment from the Plan under a QDRO, you
generally have the same options and the same tax treatment that the participant would have
(for example, you may roll over the payment as described in this notice).
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SPECIAL TAX NOTICE REGARDING NON-PERIODIC PBGC PAYMENTS
from Designated Roth Account
If you are a nonresident alien
If you are a nonresident alien and you do not do a direct rollover to a U.S. IRA or U.S. employer plan,
instead of withholding 20%, PBGC is generally required to withhold 30% of the payment for federal
income taxes. If the amount withheld exceeds the amount of tax you owe (as may happen if you do a
60-day rollover), you may request an income tax refund by filing Form 1040NR and attaching your
Form 1042-S. See Form W-8BEN for claiming that you are entitled to a reduced rate of withholding
under an income tax treaty. For more information, see also IRS Publication 519, U.S. Tax Guide for
Aliens, and IRS Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities.
Other special rules
If a payment is one in a series of payments for less than 10 years, your choice whether to make a
direct rollover will apply to all later payments in the series (unless you make a different choice for later
payments).
If your payments for the year (only including payments from the designated Roth account) are less
than $200, PBGC is not required to allow you to do a direct rollover and is not required to withhold
federal income taxes. However, you can do a 60-day rollover.
You may have special rollover rights if you recently served in the U.S. Armed Forces. For more
information on special rollover rights related to the U.S. Armed Forces, see IRS Publication 3, Armed
Forces’ Tax Guide. You also may have special rollover rights if you were affected by a federally
declared disaster (or similar event), or if you received a distribution on account of a disaster. For more
information on special rollover rights related to disaster relief, see the IRS website at www.irs.gov.
FOR MORE INFORMATION
You may wish to consult with a professional tax advisor. Also, you can find more detailed information
on the federal tax treatment of payments from employer plans in: IRS Publication 575, Pension and
Annuity Income; IRS Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs);
IRS Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs); and IRS
Publication 571, Tax-Sheltered Annuity Plans (403(b) Plans). These publications are available from a
local IRS office, on the web at www.irs.gov, or by calling 1-800-TAX-FORM.

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