Employer-sponsored retirement plan participants may either “directly” or “indirectly” roll over assets from their plan into an IRA.

For direct rollover, eligible assets move directly from an eligible employer-sponsored retirement plan into an IRA maintained at a financial organization that the individual has chosen. To be considered a direct rollover, the check representing the eligible rollover distribution must be titled so that the distribution is negotiable only by the receiving financial institution (i.e., “Oregonians Credit Union as Custodian of Individual Retirement Account of John S. Smith”) Both the employer of the distributing plan and the accepting organization report the direct rollover procedure to the IRS.