401(k) Adoption Agreement
Charles Schwab

This form created the individual 401(k) plan.

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401(k) Account Application
Charles Schwab

This form opens an account within the 401(k) plan for you.

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Multi-participant 401(k) plans require more complicated record keeping, compliance reporting, and assistance to run. We offer management of multi-participant 401(k) plans through our Retirement Plan Management service.

However, as a part of our DIY service level we can manage a client’s individual 401(k). Sometimes also called a solo-401(k), an individual 401(k) differs from other employer-sponsored retirement plans in that an individual 401(k) plan only has one participant. They are 401(k) plans for small business owners who are the only employee of their business.

The paperwork for opening an individual 401(k) plan is more complicated, but if a DIY client is able to navigate the paperwork on their own, or pays for our Paperwork Preparation bonus service, then we are happy to manage an individual 401(k) as a part of our DIY service.

There are two forms which must be completed and returned to Schwab and two which must be filed with your other important small business paperwork.

Forms to Return

First, the Employer must complete and sign the Adoption Agreement. On Page 3, you should fill out the information about your business. You will need to know the name of your business, its official address, its federal tax ID, and what type of organization you are. You will also need to come up with a name for your 401(k) plan. By default, we recommend that you use the name of your business followed by “Retirement Plan.” For example, “Marotta Wealth Management Retirement Plan.”

On the same page, you will also need to pick an effective date for the plan. This date can be any date in the future. It could be the start of the next month, for example.

After reviewing the rest of the form, you can sign and date on Page 6.

Second, you must complete and sign an Account Application. Much of the same employer information is required on Page 1. The information should match what you filled out on the Adoption Agreement.

Then on page 2, you should fill out your own personal information. Later on Pages 5-6, you should identify your beneficiary designations for your 401(k). If you are married, either your spouse should be your primary beneficiary or you should get your spouse’s notarized signature on Page 8.

Finally, you should sign and date on Page 9.

Forms to File

Third, you must complete the Elective Deferral Agreement to specify the salary deferral amount. You should keep a copy of this form with your other small business documentation, and then implement your deferral election as part of your payroll. You do not need to return a copy to Schwab.

Fourth and final, although nothing needs to be returned to Schwab, Employers must print and provide a copy of Schwab’s Summary Description to each participant. As you are the only participant, you are expected to fill out the form and provide a copy for yourself. This finished copy can be kept with your other small business documentation.

These forms can be complicated to navigate. If you need assistance understanding or filling out the forms, you should first reach out to Schwab Alliance directly at 800-515-2157. If you would like our assistance filling out the paperwork, our Paperwork Preparation bonus service can be purchased for an additional planning fee.