How it works
Five stages, and you can see which one you are in.
Nothing about a retirement account should be a black box. Every contribution has a state, every state has a meaning, and every meaning is published.
Opening the account
The employer establishes the arrangement
The employer confirms eligibility rules and payroll capability. No employee data is required to start.
Eligible employees are invited
Each employee receives an invitation. Nothing is opened for them and no account exists until they act.
The employee verifies once
Identity and eligibility are established with an Investor Passport, which is reusable across Investor Services and InvestNow rather than repeated per account.
The account is opened in the employee’s name
A Traditional or Roth IRA is established with Institutional Trust Company as custodian. The employee is the account holder.
Payroll begins
The employee sets a contribution rate. The employer’s payroll process sends it with each cycle.
See footnote 3
What happens to each contribution
A contribution is not one event. It is a sequence, and conflating the steps is how savers end up unsure whether their money arrived.
| State | What it means |
|---|---|
| Scheduled | A contribution the employer has set up but not yet sent. |
| Submitted | Received by MyFreeIRA and validated. Not yet money. |
| Accepted | Passed custodian validation and eligibility checks. |
| Posted | Recorded against the account by the custodian. |
| Settled | Cash or securities have finally exchanged. |
| Reconciled | Matched against the custodian’s own record of the same event. |
| Rejected | Failed validation. Nothing moved. The reason is shown. |
| Returned | Money moved and came back. The reason is shown. |
| Suspended | Held pending an action by the employer or account holder. |
Who can do what
| Action | Employer | Employee |
|---|---|---|
| Invite an eligible employee | Yes | No |
| Open the IRA | No | Yes |
| Set the contribution rate | No | Yes |
| Send the payroll contribution | Yes | No |
| Choose investments | No | Yes |
| See individual balances or holdings | No | Yes |
| Name beneficiaries | No | Yes |
| Close the account | No | Yes |
| Stop participating in the arrangement | Yes | Yes |
The employer never sees an employee’s balance, holdings or beneficiaries. That is not a setting — it is enforced server-side by the authorisation layer, not by hiding a screen.
When work changes
The account is already the employee’s. Payroll contributions stop, the account continues, and contributions can resume from a new employer that participates or continue directly. There is no rollover, no distribution and no deadline to meet.
Footnotes
- Custody will be provided by Institutional Trust Company through Investor Services. Institutional Trust Company is seeking a South Dakota non-depository trust charter, is not chartered, and is not accepting accounts. Account opening is not available. ↩