State of Michigan 401(k) and 457 Plans

Self-Directed Brokerage Account (SDBA)

Manager: Schwab

Category: Brokerage Account

Objective: Provide ultimate investment control and choice.

Strategy: The SDBA is a brokerage option that offers you the ability to invest in individual stocks, bonds, CDs, over 100 commission-free ETFs, and more than 13,000 mutual funds. You have to complete an application form to set up a separate Self-Directed Brokerage Account before you can trade securities.

Expenses: $50 annual maintenance fee. Additionally, there is a varying sales load associated with load mutual funds or a flat transaction fee on no-load funds.

Note: If you chose to use the Self-Directed Brokerage Account (SDBA), beginning April 1, 2018, the Plan will require a minimum balance of $1,000 in the Plan core funds in order to proceed with future asset movements into the SDBA. This is to facilitate the deduction of Plan administration and SDBA fees. Participants currently using the SDBA but who do not have the minimum amount in the core funds, are not being asked to move SDBA assets at this time to meet the Plans' minimum balance requirements. However, participants with an insufficient core fund balance as of April 1, 2018, will owe outstanding Plan fees when SDBA assets are returned to the core funds and prior to taking a distribution from the Plans.

SDBA Acknowledgement