Medallion Signature Guarantee – FAQs
What is a medallion signature guarantee?
A medallion signature guarantee is a guarantee by the transferring financial institution that the signature is genuine and the financial institution accepts liability for any forgery.
Is a medallion signature guarantee the same as a signature guarantee?
No, the medallion program includes insurance indemnifying the guaranteeing bank in the event a guarantee fails. Alerus will only accept the medallion signature guarantee.
When is a medallion signature guarantee required?
A medallion signature guarantee is required for any of the following transactions:
- Distributions over $100,000
- A bank wire or automatic clearing house (ACH)
- Payment to a destination outside the U.S.
- Payment to an alternate payee, beneficiary, or any third party other than the rollover recipient institution
- Payment to an address that is different than the address of record on the account
- If the address on the account has been changed within the past 15 days
Can Alerus provide the medallion signature guarantee?
Alerus cannot provide a medallion signature guarantee on distribution requests. The medallion signature guarantee must be provided by a financial institution that offers this service. Different institutions have different policies as to what type of identification they require to provide the guarantee and whether they charge a fee for such service. Most institutions will not guarantee a signature of someone who has not already been their client.
Why is a medallion signature guarantee necessary?
The requirement for a signature guarantee provides protection from fraud because it validates that the participant signature is genuine. In addition, the guaranteeing entity promises to make the affected parties whole if the signature is fraudulent.
How can a participant get a medallion signature guarantee?
Medallion signature guarantee services may be offered by certain banks, brokerage firms, and credit unions. Different institutions have different policies as to what type of identification they require to provide the guarantee and whether they charge a fee for such service. Most institutions will not guarantee a signature of someone who has not already been their client.
Can the medallion signature guarantee requirement be waived?
The plan sponsor or third-party administrator has the ability to waive the requirement and upload the signed form using Employer Plan Access, Alerus’ secure website. In this case, the entity responsible for uploading the form assumes the liability for validating the signature and the potential of fraud. Alerus assumes no liability for the genuineness of signatures on forms uploaded through Employer Plan Access.
Can acknowledgment by a notary public be used instead of a medallion signature guarantee?
No, a medallion signature guarantee is not the same as an acknowledgment by a notary public. The medallion signature guarantee is a certification by the institution that the signature is authentic and that the institution accepts liability for any forgery. An acknowledgment is a certification by a notary public attesting that the signer signed a document voluntarily, signed the document in the presence of the notary, and provided proof of identity.