Hoosier START 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 the 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 PCRA if you have a 457(b) or 401(a) account or both with Hoosier START. If you participate in both the 457(b) and 401(a) plans, you may open a PCRA for each plan if you have the minimum balance required for enrollment in both plans. Further, if you have two PCRA accounts, the assets in each account cannot be intermingled. In other words, you may not transfer money back and forth between your 457(b) PCRA and your 401(a) PCRA.
You can choose a PCRA as well as any of the core funds for your investment choices. The term "core funds" refers to the fund choices currently offered through Hoosier START. You must choose at least one core fund in addition to a PCRA.
You may transfer a flat dollar amount or a percentage from your pre-tax and/or Roth money 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 ratio of the money types invested in the PCRA will be maintained and updated each time money is transferred to the PCRA. To move money back to your core account, place the dollars in the Schwab Bank Sweep for Benefit Plans and then initiate the transfer back to your core account. Only settled funds are eligible to be transferred back to your core account. Money transferred from the PCRA to your core account will be applied using your current money type contribution allocation at the time the transfer is processed.
Signing Up for PCRA
If you decide that a PCRA account is the right choice for you, you must complete and sign the Memorandum of Understanding. This form is used to open your account with Schwab. The form can be completed via DocuSign or by paper form. The completed and signed form must be returned to Nationwide to establish your PCRA.
About 10 days after you send in your forms, you will receive a Schwab PCRA Welcome Kit containing your PCRA number and other information to help you make more informed investment decisions in your account. Once you receive the Welcome Kit, you will need to visit schwab.com/PCRAopen.
Retirement Plan ID:
Social Security Number: This is required to confirm your account number is established.
You will need to complete a Limited Power of Attorney (LPOA) to give you the authority to place trade orders in your Schwab PCRA account. If you do not wish to establish your LPOA online with Schwab, you may call their customer service line at (888) 393-7272 and they will assist you in completing their necessary paperwork to establish the ability to trade in your PCRA.
Minimum account balance
You must retain $10,000 of your total account balance in your Hoosier START core account. The minimum account balance is applied per plan. The minimum initial transfer amount if $2,500 per PCRA account, so that means you much have at least $12,500 in your plan account to enroll in the PCRA.
Available investment options 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.
Unavailable investment options
The following investments are not permitted within PCRA:
- Common and preferred stocks, convertible bonds, convertible preferred stocks, foreign securities, and REITs that are not listed and traded on approved exchanges or markets
- 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