Self-Directed Brokerage Account (SDBA) Options
Savings Plus offers a self-directed brokerage account (SDBA) called the Schwab Personal Choice Retirement Account (PCRA) through Charles Schwab, member FINRA, SIPC for experienced investors who may want to direct investments to a wider variety of options other than those available in Savings Plus' core lineup.
This option allows you to invest in most publicly traded equities, mutual funds, governmental or corporate bonds, real estate investment trusts, and a variety of other investments.
Rules for Participation
You may open a SDBA if you have a 401(k) or 457(b) account or both with Savings Plus. If you participate in both the 401(k) and 457(b) plans, you may open a SDBA for each plan. If you have two SDBA accounts, the assets in each account cannot be intermingled. In other words, you may not transfer money back and forth between your 401(k) SDBA and your 457(b) SDBA.
You can choose a SDBA as well as any of the core funds in Savings Plus for your investment choices. The term “core funds” refers to the fund choices currently offered through Savings Plus. You must choose at least one core fund in addition to a SDBA.
You may transfer a flat dollar amount or a percentage from your pre-tax and/or Roth Contribution Type in the core account balance. Please note: once your money is invested in the PCRA, you will not be able to distinguish between pre-tax and Roth money types. A signed Memorandum of Understanding and Limited Power of Attorney (LPOA) are required to enroll in the Self-Directed Brokerage Option.
Minimum Account Balance
You must retain $2,500 or 50 percent of your total account balance, whichever is less, in your Savings Plus core account. The minimum account balance is applied per plan.
The following types of investments are available through a Schwab PCRA:
- American depository receipts of foreign corporations*
- Brokered certificates of deposit
- Collateralized mortgage obligations
- Commercial Paper
- Common and preferred stock*
- Convertible bonds*
- Convertible preferred stock*
- Corporate bonds
- Exchange-traded Funds
- Government bonds and other securities issued or guaranteed by the United States of America
- Listed options (limited to writing covered calls and buying puts against long positions)
- Mutual funds, including more than 4,000 funds with no load or transaction fees, through the Schwab Mutual Fund OneSource® service
- Real Estate Investment Trusts (REITs)*
- Securities of any agency or instrumentality of the United States of America
- Taxable open and closed-end mutual funds
- Taxable unit investment trusts
* Must be listed on an approved exchange or market, which includes the New York Stock Exchange, American Stock Exchange, National Market System sponsored by the National Association of Securities Dealers (NASD), National Association of Securities Dealers Automated Quotation System (NASDAQ), National Quotation Bureau n/k/a Pink Sheets LLC and any other exchange registered as a National Securities Exchange under Section 6 of the Securities Exchange Act of 1934.
The following investments that are not listed and traded on approved exchanges or markets are not permitted within PCRA:
- Non-allowed investments include all common and preferred stocks, convertible bonds, convertible preferred stocks, foreign securities, and REITs and limited partnerships
Additional non-allowed investments include:
- Bank deposit products
- Collectibles (art, antiques, etc.)
- Commodities and commodity futures
- Direct participation plans
- Foreign currencies
- Insurance products (fixed and variable annuities, life insurance contracts)
- Master Limited Partnerships
- Municipal bonds
- Precious metals
- Publicly Traded Partnerships
- Real property
- Short sales
- Trust deeds
- Tax-free open and closed-end mutual funds
- Tax-free unit investment trusts
- Unlisted options, option purchases (exception: buying puts against long positions and writing covered calls), and writing uncovered call or put options
- Any other investments that are not on the list of allowed investments
Learn more about the Schwab Personal Choice Retirement Account.