How to open a qualified retirement plan (QRP)

How to open a qualified retirement plan (QRP)

A Schwab qualified retirement plan (QRP), commonly referred to as a Keogh, allows for substantial annual contributions, making them appropriate for clients with relatively high, stable incomes and few, if any, employees.

As of September 23, 2011, business owners can no longer establish new Schwab QRPs. Schwab continues to service and maintain existing plans, as well as enroll new participants into them.

You can open a Schwab QRP participant account using paper forms.

To open a QRP, you will need the following:*

  • Required forms (acquired from your service team):
    • Participant Account Application
    • Designation of Beneficiary(ies)
    • Participant / Employee Census Form
    • Options Trading and Margin Application
    • Power of Attorney (Individual POA)
  • Your firm name, master account number, and contact information
  • The participant’s name, home and business addresses (no P.O. boxes or investment advisor addresses), mailing address (if different from home or business address), home or business phone number, birth date, country of legal residence, all countries of citizenship, identification number Tooltip , employment status, and employer name
  • The beneficiary’s name, birth date, home address, all countries of citizenship, country of legal residency, and identification number

* Additional information may be required to complete the forms, work with your service team to identify additional requirements

This process may be used to open a Schwab QRP participant account.

  1. Contact your service team to obtain the following QRP forms:
    • Participant Account Application—Participant must complete, initial, sign, and date. Ensure all additional features the participant requested have been added. Plan administrator must complete and sign section 7. For a paired plan, two participant accounts must be established: one for the profit sharing plan and one for the money purchase plan.
    • Designation of Beneficiary(ies)—Participant must sign the form. If applicable, the spouse’s signature may be required and must be notarized or witnessed by the plan administrator.
    • Participant / Employee Census Form—Employer or authorized agent must sign and submit this form with plan contributions. Include the names of all plan participants, including the employer, on this form.
    • Options Trading and Margin Application—QRPs are eligible for certain protective and covered options only. Participants must complete this form in its entirety and sign. See How to add features to an account for more information.
  2. Advise the plan administrator to keep copies of the completed forms for their files before sending them back to you.
  3. Print the forms and obtain signatures from each employer and participant. Send the signed form(s) to your Schwab service team via a Schwab Advisor Center® Service Request.

Once you have submitted your request:

  • Schwab opens the participant account.
  • If any paperwork authorizing an advisor to manage an account is incomplete or missing, Schwab will temporarily set up the account with a special Schwab Advisor Services™ master account but not a firm's master account. Advisors have 90 days to provide missing paperwork or signatures. After 90 days, the account is no longer considered a Schwab Advisor Services account and will be transferred to the Individual Investor Division.
  • The investment advisor receives an alert when the account is opened.
  • The account holder should consult with their tax advisor if they have any questions about tax implications.
  • Employers must provide quarterly Periodic Benefit Statements to each plan participant and beneficiaries of deceased plan participants.
  • Schwab will send your client standard communications about their QRP once it's been opened.
  • If you have questions about opening QRPs, call your service team.

Go to the Forms library on Schwab Advisor Center and select the forms below.

Form: Options Trading and Margin ApplicationForm: Power of Attorney (Individual POA)

 

My client has a QRP with another firm; can they bring their plan assets over to Schwab?
Yes. Your clients can roll over their QRP assets into a currently offered business retirement plan with Schwab. Contact your service team for available business retirement plans.

Can my client add new employees to an already existing QRP?
Yes. Your client can add new employees to an already existing plan, even if the business has been an owner-only business until recently.

Are participant accounts eligible for additional features?
Participant accounts are eligible for Money Market Funds, limited power of attorney, limited power financial advisor, full power of attorney, and certain protective and covered options Tooltip .

Investment advisors are not permitted to have withdrawal power financial advisor over plan assets, as all distributions require authorization by the plan’s trustee or plan administrator.

When are participants vested in the plan?
This depends on the vesting schedule the plan sponsor has chosen. Vesting schedule options include immediate vesting, three-year cliff, six-year graded, variable cliff, or variable graded.

How to add features to an account
How to add a power of attorney to an account
Introduction to cash options and investments
Introduction to householding
Introduction to options trading
Introduction to qualified retirement plans (QRP)