NUA Distribution at Empower Retirement: Step-by-Step Process

Empower Retirement is the largest 401(k) recordkeeper in the United States by participant count — administering plans for tens of millions of employees after absorbing MassMutual's retirement division, Prudential Financial's retirement business, and Great-West Life & Annuity. If your 401(k) is held at Empower and you have highly appreciated employer stock, here's exactly how the NUA election works within Empower's system — what to request, how to find your cost basis, and what the in-kind transfer looks like end to end. Not a substitute for professional guidance on your specific situation.

Why Empower's platform matters for NUA

NUA requires an in-kind distribution of employer stock — the shares transfer out of your 401(k) to a taxable brokerage account without being sold. This is not a standard transaction. Most plan distributions default to cash or IRA rollovers. In-kind stock distributions require the recordkeeper to run a different workflow: lot-level cost basis documentation, DTC-eligible share transfer, and proper population of 1099-R Box 6.

Empower's platform has the infrastructure to handle NUA elections correctly. But you must request it in the right way, using the right language — or Empower's default processing will liquidate your employer stock and send you cash (or roll it into an IRA), which permanently destroys the NUA election.

One additional complexity: Empower has absorbed multiple legacy recordkeeping platforms in the past decade. If your plan was originally held at MassMutual, Prudential Retirement, Putnam Investments, or Voya Financial Retirement before migration, the cost basis records may have been migrated in a compressed format. Verifying cost basis before you initiate the distribution is especially important for participants on these migrated plans.

Step 1 — Find your employer stock cost basis in the Empower portal

Before calling, know your cost basis. This is the number that determines your NUA amount — and your ordinary income tax bill at distribution.

• Log in to the Empower participant portal at empower.com. Navigate to your workplace retirement account (not Empower Personal Wealth — that is a separate brokerage product). Find your investment positions and look for the employer stock holding.
• Empower displays the current market value of each position. For NUA purposes, you need the plan cost basis — the price the plan paid for the shares on your behalf, not the current market value, not your grant price, not the price on any particular date.
• If the cost basis is visible in the portal, print or save a screenshot. If it isn't, or if the portal shows "N/A" or "estimated," call Empower participant services — the number is on your plan statement or on the portal under "Contact Us" — and ask specifically for the plan cost basis per share of employer stock. Use that exact phrase.
• Request cost basis information in writing. Ask Empower to mail or email a statement showing the lot-level cost basis before you initiate any distribution. You will need this to verify the 1099-R Box 2a amount at tax time.

Step 2 — Open a taxable brokerage account to receive the stock

The in-kind employer stock must transfer to a taxable (non-IRA) brokerage account. Sending it to an IRA destroys NUA permanently.¹

• Empower Personal Wealth is Empower's brokerage and financial management platform (formerly Personal Capital, rebranded in 2023). It is available to Empower Retirement participants at no additional cost. Opening an Empower Personal Wealth taxable brokerage account and using it as the receiving account for the in-kind transfer simplifies coordination — both legs are on the same platform, reducing the chance of processing errors and delays.
• Note: Empower Personal Wealth and Empower Retirement are two distinct products within the Empower ecosystem. Your workplace 401(k) is in Empower Retirement; the receiving brokerage account should be in Empower Personal Wealth or another brokerage of your choice.
• If you prefer to receive shares at a different broker (Fidelity, Schwab, Vanguard), you can — but you will need the receiving broker's DTC participant number and your account number. External transfers typically take longer and require more coordination between platforms.
• Ensure the receiving account is open and ready to accept shares before you call to initiate the distribution.

Step 3 — Call Empower participant services and use the right language

In-kind employer stock distributions cannot be initiated through the Empower portal's self-service tools. You must call Empower participant services — the phone number appears on your plan statement, quarterly communication, or under "Contact Us" in the portal. (Empower's main participant services line is often listed as 1-800-701-8255, but your plan may have a dedicated plan-sponsor line that routes faster.)

When you reach a representative, use these exact phrases:

• "I want to take a lump-sum distribution triggered by my separation from service [or: age 59½ / disability / death of participant]."
• "I want to distribute the employer stock in-kind — transferring the shares, not selling them — to my [Empower Personal Wealth / external broker] account."
• "I want to roll over the remaining non-stock balance to an IRA."
• "I am electing Net Unrealized Appreciation treatment on the employer stock under IRC § 402(e)(4)."

Using exact language — "lump-sum distribution," "in-kind," "NUA," "IRC § 402(e)(4)" — signals that this is a specialized transaction. Front-line representatives typically handle standard rollovers and withdrawals; an NUA in-kind distribution may need to be escalated to a distribution specialist.

Step 4 — Confirm the distribution instructions in writing

Before the call ends, ask Empower to send written confirmation of the distribution instructions. The written summary should specify:

• That employer stock is being distributed in-kind (shares transferred, not sold)
• The receiving account details (Empower Personal Wealth account number or external broker DTC/account)
• That the remaining plan balance is being rolled to your IRA custodian of choice
• The triggering qualifying event (separation from service / age 59½ / etc.)
• Expected timeline for both legs to complete

Written confirmation protects you if the distribution is processed incorrectly. Plans at large recordkeepers occasionally default shares to cash or route assets to the wrong account type. A paper trail lets you dispute a processing error before the tax year closes.

Step 5 — Complete both legs before December 31

The lump-sum distribution requirement under IRC § 402(e)(4) means your entire plan balance must leave the plan within a single calendar year. Both legs — the in-kind stock transfer to your taxable account, and the IRA rollover of the remaining balance — must settle by December 31.

• Internal transfers within Empower (Empower Retirement to Empower Personal Wealth) typically settle within 1–5 business days. Rollovers to external IRA custodians typically take 3–10 business days depending on the receiving firm's processing time.
• If you are initiating in late November or December, explicitly tell the representative that the same-year completion deadline is critical. Ask Empower to note the urgency and to flag both legs for monitoring before year-end.
• After initiating, check both accounts in the following days to confirm the transactions have settled. Do not assume both legs completed — verify the shares appear in your taxable brokerage account and that the IRA rollover has been received by the IRA custodian before December 31.

Step 6 — Verify your 1099-R from Empower

Empower will issue a Form 1099-R in January of the year following the distribution. For an NUA election, the following boxes must be populated correctly:²

If Box 6 is blank, or if Box 2a equals Box 1 (the full FMV treated as taxable), Empower has processed the distribution as a cash distribution rather than an in-kind NUA election. Contact Empower to request a corrected 1099-R. Do not file with an incorrect 1099-R — the IRS and your state will treat the full distribution as ordinary income, eliminating the NUA benefit entirely.

Empower-specific pitfalls

Portal shows "estimated" cost basis

Empower's participant portal sometimes displays estimated rather than actual lot-level cost basis, particularly for plans migrated from legacy platforms. Before initiating any distribution, call participant services and explicitly confirm the plan cost basis per share — the actual acquisition cost, not an estimate. If the cost basis is genuinely unavailable, see the cost basis guide for reconstruction approaches.

Legacy platform cost basis gaps

Participants whose plans migrated from MassMutual Retirement, Prudential Financial Retirement Services, Putnam Investments, or Voya Financial Retirement may find that cost basis records were migrated in a summarized format that loses lot-level granularity. This doesn't necessarily disqualify NUA — but you may need to request documentation from the legacy recordkeeper or your plan sponsor's HR department to establish the correct basis before proceeding.

Employer stock sold automatically at default

If your plan's distribution settings default to liquidating positions for cash distributions, initiating a general "distribute my account" request can result in employer shares being sold automatically — converting your NUA election into a fully taxable cash distribution. Always use the explicit "in-kind employer stock transfer" language before any distribution request is confirmed.

Confusing Empower Retirement with Empower Personal Wealth

Empower's two products share a brand name and website but are separate platforms. Your 401(k) is in Empower Retirement. Your receiving taxable brokerage account should be in Empower Personal Wealth (or an external broker). A distribution representative focused on the retirement side may not automatically understand that you want the stock transferred to the Personal Wealth brokerage — specify this explicitly, including the Empower Personal Wealth account number, to avoid the stock being placed into a new IRA within the Empower Retirement system.

Missing the December 31 same-year deadline

If the IRA rollover leg settles after December 31, the lump-sum distribution spans two tax years — typically disqualifying the NUA election. Initiate early enough to leave a 2–3 week buffer before year-end. If a holiday window is involved (Thanksgiving, Christmas), factor in the additional settlement delay.

Other major recordkeepers

If your plan is held at Fidelity NetBenefits rather than Empower, see the Fidelity NUA distribution guide for platform-specific steps. At Vanguard at Work, the NUA process follows the same "lump-sum distribution, in-kind, IRC § 402(e)(4)" language — contact Vanguard's Institutional Retirement Services line (not the retail investor line) and request to speak with a distribution specialist. At Schwab Retirement Plan Services and Merrill Lynch, identical language applies; both platforms handle in-kind NUA distributions but may require supervisor escalation for front-line representatives unfamiliar with the transaction type.

After the transfer: what to do next

Once the employer stock appears in your Empower Personal Wealth (or external) taxable brokerage account:

• Don't sell immediately without a plan. The NUA amount (the appreciation that accrued inside the plan) automatically qualifies as long-term capital gain regardless of how long you hold. But any additional appreciation earned after the distribution date is short-term if you sell within a year. Holding at least one year on that post-distribution gain portion maximizes tax efficiency.
• Review your post-distribution diversification strategy — see the post-NUA diversification guide for tranche selling, charitable strategies, and the hold-for-estate-step-up option.
• Consult a CPA or NUA specialist on the distribution year return. The 1099-R Box 6 must be reported correctly on Schedule D as a deemed long-term capital gain. See the tax reporting guide for exact Schedule D mechanics — most tax software does not handle Box 6 automatically.