Why Banks Are Turning to Ascensus to Help Manage Their IRA and HSA Programs


The earth spins on its axis at 1,040 miles per hour. Many of the changes in the world of long-term savings, such as IRAs and health savings accounts (HSAs), seem to be moving just as fast—and gaining speed. With a new presidential team in place, a new direction for many programs and policies, including IRAs and HSAs, seems imminent. It’s just one of the many reasons more and more banks are turning to Ascensus’ Fully-Administered Program to manage their accounts.

Increased Reporting Penalties

You can get a glimpse of changes to come by looking at the chart below showing an increase in penalties for inaccurate or missing reporting that were put in place just in the last couple years.


Penalty for 2014 and Previous Years Forms

Penalty for 2015, 2016, and 2017 Forms

Failure to provide a correct Form 1099-R to owner or to IRS

$30 per return if filed within 30 days

$60 per return if filed after 30 days but by August 1

$100 per return if filed after August 1 or not filed.

$50 per return if filed within 30 days

$100 per return if filed after 30 days but by August 1

$260 per return if filed after August 1 or not filed.

Intentional disregard of filing requirements

$250 per return with no maximum penalty

$530 per return with no maximum penalty ($520 for 2015)


If you consider the reason for these increased penalties, you may make three key assumptions.

  1. The IRS sees an issue with this type of reporting and wants to “crack down” on late and incorrect filing. There is a gap in the information being accurately reported and the IRS has decided to address it.

  2. The IRS sees a revenue opportunity through increased penalties and fees, and, with stiffer fines in place, expects an uptick in revenue.

  3. The IRS will further assess these noncompliance occurrences. Financial organizations can expect an increase in IRA and HSA audits and, ultimately, in penalties for any failures.  

Keeping up with the complexities that surround IRAs and HSAs is a challenge, and higher penalties make it all the more crucial to retain a proven, trusted partner to navigate them.

Increased Potential for Rule Changes

In addition to IRS changes, the Department of Labor has indicated upcoming changes. Although conversations surrounding the proposed Retirement Enhancement and Savings Act (RESA) bill are currently stalled, similar conversations are continuing and changes are likely forthcoming. Your organization will want to be prepared.

Increased Number of Retirees

Another factor causing banks to turn to Ascensus is the new generation of retirees. For approximately the next 12 years, roughly 10,000 people will retire every day.* This will result in a significant increase in rollovers and transfers, required minimum distributions, milestone reporting, and beneficiary payments—all of which require close attention to detail to ensure compliance. Ascensus’ Fully-Administered Program will provide that close attention to detail, consistently keeping your organization compliant throughout all of these transactions.

Keep in mind that included in the 10,000 retirees per day is the lead IRA person at financial organizations across the country who has managed the IRA program for years. In fact, Ascensus is seeing a trend where financial organizations are experiencing a significant increase in IRA staff turnover, likely due to retiring IRA professionals. Just in 2016, Ascensus updated the primary contact information for more than 16 percent of its IRAdirect® clients (IRAdirect is the system that houses the Fully-Administered Program). Ascensus expects this trend to continue to a point that in the next three years, there will be a 50 percent turnover rate for the organization’s critical contact person. At the end of the day, more organizations are relying on less experienced staff to manage a significant increase in complex IRA and HSA processes.

Increased Efficiencies With Ascensus

Stiffer penalties, significant changes to the rules and regulations, more complex transactions due to the maturity of IRAs and their owners, less experienced IRA staff, among other things, are driving banks to seek a better, more efficient way to manage their IRA and HSA programs. In this ever-changing world of retirement and health savings accounts, it just makes sense—even dollars and cents—to protect your organization and your account owners by partnering with Ascensus.


Michael Bush, CIP   

Product Manager | RPS

E  Michael.Bush@ascensus.com

P  218-825-5220


Learn More Here!


*Social Security Administration Annual Performance Plan for FY 2012 and Revised Final Performance Plan for FY 2011. Page 36.

Ascensus® and the Ascensus logo are registered trademarks of Ascensus, Inc.

IRAdirect® is a registered trademark of Ascensus, Inc.


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