Investment Election Changes & Transfers: Opening an SDBA
The Self-Directed Brokerage Account (SDBA) allows participants to invest their funds in a wide variety of publicly traded debt and equity securities, and shares of numerous mutual funds. The SDBA is established through a brokerage account with TD Ameritrade.
The SDBA option is available to participants whose plan sponsor allows it as an investment option in the plan.
Please note that participants may not choose to invest more than 95% of their contributions to an SDBA, and must retain at least $2,500 in the Program investment option(s) at all time. An annual user fee of $250 will be deducted from participant accounts if they maintain an SDBA with a balance. This fee will be taken on a quarterly basis at $62.50 on the last business day of the quarter.
An SDBA Application is available on the Program’s website at www.abaretirement.com – see Participant Resources, then Forms.
In the chart below, you will find the necessary steps to follow when an eligible participant wishes to open an SDBA. You must complete these steps in sequence.
|Steps for Opening a Self-Directed Brokerage Account (SDBA)||Plan Participant’s Role||Plan Administrator’s Role||TD Ameritrade’s Role|
|1. Decide to open an account; complete and send an application to TD Ameritrade||√|
|2. Process the form||√|
|3. Send welcome kit to participant||√|
Step 1 – Participant Decides to Open an SDBA
Opening an SDBA is easy. Participants complete the Self-Directed Brokerage Account Application and submit it directly to TD Ameritrade. TD Ameritrade will send the participant a welcome kit with his or her newly established account number and log on credentials for the TD Ameritrade website. The participant can then arrange to transfer assets from the Program’s core investment options to the SDBA for trading.
The SDBA Application is available in the Participant Resources section of the Program’s website at www.abaretirement.com (see Forms).
Please note that Roth 401(k) contributions and earnings cannot be commingled with other plan assets, so a separate SDBA will need to be established solely for Roth 401(k) assets (see sidebar). Participants may complete transfers by calling the Customer Service Center at 800.348.2272, or accessing the website at www.abaretirement.com. See “Transferring Funds” for more information.
A Note about Roth 401(k) Contributions
Roth 401(k) contributions and earnings cannot be commingled with other plan assets. If a participant wishes to transfer Roth 401(k) assets to an SDBA, he or she will need to establish a separate SDBA using a separate application.
Steps 2 and 3 – TD Ameritrade’s Role
TD Ameritrade will process the SDBA application upon receipt and will send a welcome kit to the participant.
SDBA participants receive a monthly statement from TD Ameritrade. Note that the total SDBA assets as of the end of the calendar quarter are also included in the participant’s quarterly statement from the Program. Account information is also updated daily so that balances online and through the Customer Service Center are inclusive of SDBA assets.