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Schwab Corporate Services Introduces New Rollover IRA Product
New product provides safe harbor for automatic rollover of small retirement
account balances
SAN FRANCISCO, March 10 /PRNewswire-FirstCall/ -- Schwab Corporate Services
has introduced The Charles Schwab Trust Company (CSTC) Rollover Individual
Retirement Account (IRA), a product that allows plan sponsors a simple,
cost-effective way to roll over qualified plan balances of former employees
without paying distribution or setup fees.
Federal regulations effective March 28, 2005 require tax-qualified plans with
force-out provisions to roll over (instead of directly pay out) retirement
distributions between $1,000 and $5,000 to an IRA for terminated participants
who have not elected to take a distribution. The CSTC Rollover IRA helps plan
sponsors comply with these regulations by automatically establishing and
funding an IRA for each affected participant.
"This product is a benefit to plan sponsors and the third party administrators
who serve them, allowing them to easily roll over balances and comply with new
regulations without having to build new processes or systems," said Mark
Coffrini, vice president of Schwab Corporate Services. "In addition, we provide
the plan participants with all the materials and resources they need to manage
and monitor their new IRA."
The features of the CSTC Rollover IRA include:
-- Compliance with Department of Labor safe harbor provisions
-- No distribution or setup fee for participants or plan sponsors
-- Automated distribution process
-- Automated IRA account opening and funding
-- Competitive low annual account fee of $50
IRA participant balances will be invested in FDIC-insured bank deposit
accounts.
About Schwab Corporate Services
Schwab Corporate Services (SCS) provides services to retirement plan sponsors
and participants through Schwab Retirement Plan Services, Inc. (SRPS), The
Charles Schwab Trust Company (CSTC), and Charles Schwab & Co., Inc. SCS also
provides equity compensation plan services and other financial and retirement
services to corporations and executives. SRPS provides recordkeeping and
related services with respect to retirement plans. CSTC, a California
state-chartered trust company, provides trust and custody services to
retirement plan sponsors. Charles Schwab & Co., Inc. (Member SIPC) is a
registered broker/dealer, offering the Schwab Personal Choice Retirement
Account(R) (PCRA), as well as other brokerage and custody services to its
customers. These entities are affiliates of each other and are wholly owned
subsidiaries of The Charles Schwab Corporation. Total client assets in
employer-sponsored retirement plans at Schwab equaled $131 billion at the end
of 2004. The Charles Schwab Corporation (NYSE / Nasdaq: SCH), through Charles
Schwab & Co., Inc. (member SIPC), U.S. Trust Corporation (member FDIC),
CyberTrader(R), Inc. (member SIPC) and its other operating subsidiaries, is one
of the nation's largest financial services firms. (0305-6653)
DATASOURCE: Charles Schwab
CONTACT: Lindsay Tiles of Charles Schwab, +1-415-667-3997 or
Web site: http://www.schwab.com/