Sometimes employees who leave a job leave their retirement savings in their former employer's 401(k) plan. When that happens, many accounts with small balances, less than $5,000, can build up in the plan, increasing administration costs. For former employees who can't be contacted, the employer may opt to move their savings to a safe harbor individual retirement account.
Or what if a plan terminates? If that happens, for all participants who can't be contacted, savings in the plan must move to a safe harbor IRA to keep them safe.
Charles Schwab Trust Bank's Automatic Rollover IRA can be a powerful solution to meet your plan's safe harbor needs. Charles Schwab Trust Bank is a leader in trust and custody services for retirement plans. Our Automatic Rollover IRA has benefits for participants and for plan sponsors. You'll find that it's a win-win solution. Participants get an interest-bearing FDIC-insured bank deposit account. Their savings are still tax-deferred and they can roll over to an IRA, a new employer's retirement plan, or take a distribution anytime.
Sponsors can meet U.S. Department of Labor's safe harbor regulations, reduce plan administration costs, get an easy setup with Charles Schwab Trust Bank as the preferred provider, and if the plan is ending, close it simply and efficiently. Finally, these services can be added at no cost to the plan, without complicated processes or system integrations for the plan's record keeper, and without setup fees for participants when IRAs are established. The Charles Schwab Trust Bank Automatic Rollover IRA. To learn more, contact your Schwab representative or Schwab Retirement Network today.