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Download Quick Summary of SDBA Commissions and Fees
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Self-Directed Brokerage Account The Florida Retirement System (FRS) Investment Plan is now offering all Investment Plan members a Self-Directed Brokerage Account (SDBA), which will allow you to invest in thousands of different investments in addition to the Investment Plan’s core investment funds. The SDBA is being offered through Hewitt Financial Services (HFS), a subsidiary of Aon Hewitt (the Investment Plan Administrator). Appropriateness An SDBA is for experienced investors who want the flexibility to invest in a variety of options beyond those available in the FRS Investment Plan. It is not suitable for all members. There are risks associated with many of the investments in the SDBA and you assume the full risk and responsibility for the investments you select. None of the investments in the SDBA have been reviewed for suitability by the FRS and you are solely responsible for determining the appropriateness of any investments in the SDBA. You will need to select your investment options prudently and monitor your investment decisions carefully and frequently. You agree to fully indemnify and hold harmless your employer, the FRS, State Board of Administration, Ernst & Young, Financial Engines, Aon Hewitt, Hewitt Financial Services and any and all service providers to the FRS against any claims, damages, or other possible causes of actions resulting from your use of the SDBA. You understand that Sections 121.4501(8)(b)2 and 121.4501(15)(b) of Florida law incorporate the federal law concept of participant control, established by regulations of the U.S. Department of Labor under Section 404(c) of the Employee Retirement Income Security Act of 1974. If you exercise control over the assets in your Investment Plan account (which includes the SDBA), pursuant to Section 404(c) regulations and all applicable laws governing the operation of the Investment Plan, no program fiduciary shall be liable for any loss to your account which results from your exercise of control. Eligibility Requirements To participate in the SDBA you must: Maintain a minimum balance of $5,000 in the Investment Plan’s core investment funds. Make initial and subsequent transfers into the SDBA of at least $1,000. Pay all trading fees, commissions, administrative fees, and any other expenses associated with participating in the SDBA. Investment Options Available investment options within the SDBA include: Stocks listed on a Securities Exchange Commission (SEC) regulated national exchange. Exchange Traded Funds (except for leveraged Exchange Traded Funds) Mutual Funds (except for any of the Investment Plan’s core investment funds) Prohibited Investment Options Investment options not permitted within the SDBA include: Illiquid investments Over the Counter Bulletin Board securities Pink Sheet securities Leveraged Exchange Traded Funds Direct Ownership of Foreign Securities Derivatives, including, but not limited to futures and options contracts on securities, market indexes, and commodities Limited Partnerships Private Placements Buying or Trading on Margin Investment Plan core investment funds Any investment that would jeopardize the Investment Plan's tax qualified status Quarterly Account Maintenance Fee You will be charged $6.25 quarterly to participate in the SDBA. Transaction Fees The following table provides a quick summary of the most common transaction fees charged in the SDBA. Additional fees apply for other products and services and are detailed in the SDBA Commission and Fee Schedule in the “Investment Funds” section on MyFRS.com. Stock/ETF Trade Unassisted* Stock/ETF Trade Assisted* Mutual Fund - $500 minimum investment Unassisted/Assisted –NTF Funds** Unassisted – not NTF Funds Assisted – not NTF Funds Dividend Reinvestment – Mutual Funds/Stocks $8.75 $33.75 No fee $46.75 $71.75 No fee select the fund(s) you want to take money from and the amount and then select “SelfDirected Brokerage Account” and the percent to transfer to the SDBA. The money transferred to the SDBA will first be placed in the Reich & Tang Daily Income Money Market Fund1 (usually takes 1 business day). Once the money is in the Money Market Fund, you can invest this money in any of the available SDBA investment options by making the trade online or by calling the Investment Plan Administrator and connecting to HFS. Funds will remain in the Money Market fund until you direct their investment - they will not be automatically invested. Making Changes To change your investments in the SDBA, either make the changes online or call the Investment Plan Administrator and connect to HFS. Please note that excessive trading restrictions may apply to the SDBA investment options you select. Be sure you read the fund’s prospectus to determine any restrictions and penalties that may be applicable. *An unassisted trade is done solely by the member online. An assisted trade includes assistance from an HFS representative. **NTF Fund list is available at [need link]. Getting Started There are two ways to open an SDBA account, as follows: Online - Logon to MyFRS.com, then choose Manage My Benefits>Manage Investments>Open Brokerage Account, and complete the online form. Form – Complete and mail/fax an enrollment form (available online in the SDBA section [see first bullet] or by calling the Investment Plan Administrator). Your SDBA account will be established within one to two days of receipt of the online or hardcopy form. Once your account is established you will receive a welcome email from HFS with information on accessing and using your SDBA. Transfer Money Back to the Investment Plan You can transfer any money in the SDBA back to the Investment Plan, as follows: Logon to Brokerage Account Direct Access and sell the SDBA investments. Once the trade settles, the proceeds will be invested in the Reich & Tang Daily Income Money Market Fund (usually takes three to five business days depending on the settlement period of the investments liquidated). Once the money is in the Money Market Fund, you can invest this money back into any of the Investment Plan’s core investment funds by making the trade online or by calling the Investment Plan Administrator and connecting to HFS. Transfer Money into Your SDBA Once your account has been established, you can transfer money from your Investment Plan account into your SDBA, as follows: Logon to MyFRS.com, then choose Manage My Benefits>Manage Investments>Change Investments>Transfer Money from Fund(s) to Fund(s), and then 1 This fund is not insured or guaranteed by the Federal Deposit Insurance Company or any other government agency. It is possible to lose money investing in this fund. 2 3 Closing your SDBA You may close your SDBA at any time by calling the Investment Plan Administrator and connecting to HFS. Then you must liquidate all the investments in your SDBA and wait for the proceeds to be deposited in the Reich & Tang Daily Income Money Market Fund. Once the money is in the Money Market Fund, you can invest this money back into any of the Investment Plan’s core investment funds by making the trade online or by calling the Investment Plan Administrator and connecting to HFS. Subsequently, two additional automatic transfers will be made to move any residual money (dividends, interest, etc.) to your Investment Plan’s core investment funds. More Information If you need more information on the SDBA visit MyFRS.com or call the Investment Plan Administrator at 1-866-446-9377, Option 4 (TRS 711). About Hewitt Financial Services Hewitt Financial Services LLC, member FINRA, SIPC, is a broker/dealer that primarily provides services to retirement plans. It is a subsidiary of Hewitt Associates LLC (branded Aon Hewitt), a global human resources outsourcing and consulting firm, founded in 1940 and headquartered in Lincolnshire, Illinois. Securities are offered by Hewitt Financial Services, Member FINRA, SIPC. For more information on Aon Hewitt, please visit www.aonhewitt.com. Withdrawals If you have terminated employment and met the Investment Plan termination requirements, you may request a distribution. Distributions cannot be made directly from the SDBA. You must first transfer money in the SDBA back to the Investment Plan. If your Investment Plan account is subject to a required distribution (e.g., a Required Minimum Distribution) and you have insufficient money in your Investment Plan’s core investment funds, your SDBA investments may be automatically sold. You will be responsible for any losses or expenses that may apply. Account Statements You will continue to receive a quarterly statement from the Investment Plan and your SDBA total balance will be reflected on this statement. You will also receive a separate quarterly statement breaking out your SDBA balances, holdings and activity during the quarter. If any trading activity occurs in your account during a month, you will receive a monthly statement detailing the activity. You will also receive a confirmation statement for any transactions you process. This document is intended for general information purposes only and should not be construed as advice or opinions on any specific facts or circumstances. The content of this document is made available on an “as is” basis, without warranty of any kind. 4 Self-Directed Brokerage Account Quick Summary of SDBA Commissions and Fees Quarterly Account Maintenance Fee You will be charged $6.25 quarterly to participate in the SDBA. Transaction Fees Transaction fees charged in the SDBA include: Stock/ETF Trade Unassisted1 Stock/ETF Trade Assisted1 Mutual Funds2 - $500 minimum investment3 No Transaction Fee (NTF) Funds4 Unassisted/Assisted Transaction Fee Funds Load Funds at NAV No/Low Load Funds Unassisted Assisted Exchange between funds Primary Issues U.S. Treasury Corporate, Agency, Municipal Bonds Certificates of Deposit Secondary Market Trades U.S. Treasury/Agency Bonds Maturities 2 years or less Maturities more than 2 years Corporate Bonds Maturities 2 years or less Maturities more than 2 years Certificates of Deposit Maturities 2 years or less Maturities more than 2 years Commercial Paper Unit Investment Trusts Dividend Reinvestment – Mutual Funds/Stocks Account Fees Transfer Account to Another Provider (if approved)8 Restricted Stock Clearance Late Payment for Trade Voluntary Reorganization Duplicate Statement Foreign Security Transfer Foreign Security Custody Fee Foreign Security Trades $8.75 per trade $33.75 per trade No fee per trade5 No fee per trade6 $46.75 per trade7 $71.75 per trade7 $10 per transaction $24.95 per transaction No fee No Fee $0.25/bond, minimum charge $24.95 $1/bond, minimum charge $44.95 $1/bond, minimum $24.95 $2/bond, minimum $44.95 $24.95 per transaction $44.95 per transaction $44.95/transaction, minimum $100,000 $34.95/no fee if HFS acts as principal No fee $75 per transaction $150 per transaction $30 per transaction $30 per transaction $5 per statement $75 per transaction $5 quarterly $75 per trade, plus applicable commission Additional fees may be charged for other transactions or purchases. See the SDBA Commission and Fee Schedule in the “Investment Funds” section on MyFRS.com for more information. 1An unassisted trade is done solely by the member online. An assisted trade includes assistance from an HFS representative. 2HFS may receive servicing fees from money market funds and mutual fund companies in addition to the clearing and execution fees charged to you. Please refer to the HFS Plan Participant Agreement for additional details. Mutual funds are offered by a prospectus only. Investors should consider carefully information contained in the mutual fund prospectus, including investment objectives, risks, charges, fund minimums and expenses. You can request a mutual fund prospectus by logging into your account and clicking on ‘Order Fund Prospectus’ under the Mutual Fund Center. 3$500 minimum applies unless fund prospectus states a higher minimum. 4NTF Funds are available with no loads or waived loads and no transaction fees. Other fees and expenses charged by the funds will apply. Before investing in any mutual fund, please read its prospectus. A list of NTF Funds is available at [need link]. 5NTF Funds redeemed or exchanged within 90 days of the purchase date or deposit date will incur a transaction fee of $50.00. The no-transaction-fee eligibility applies only to the initial transaction fee associated with the purchase of the fund. It does not apply to any management fees or other expenses associated with the fund, including any redemption fees. For full details on these expenses/fees, please refer to the mutual fund prospectus. 6Front end loaded funds or Class “A” funds are placed at Net Asset Value (NAV). Early redemption fees may apply. Not all share classes may be purchased in Self-Directed Brokerage Accounts; all purchases are governed by the terms and conditions in the fund prospectus. 7Due to fund procedures orders placed with certain fund families will incur a $10 surcharge over and above the normal transaction fee. Please contact Hewitt Financial Services (HFS) for a list of affected fund families. 8Self-Directed Brokerage Accounts cannot transfer from HFS without prior approval or direction from the plan sponsor. 6