A Self-Directed Brokerage Account (SDBA) is an optional feature within some 401(k) plans that gives you access to a much wider range of investments than the standard plan menu. While most plans limit you to mutual funds or target-date funds, an SDBA lets you invest in options such as individual stocks, ETFs, and additional mutual funds through an outside brokerage.

At Ubiquity, this feature is offered through Charles Schwab’s Personal Choice Retirement Account (PCRA).

Who This Applies To

This information applies to 401(k) participants whose plan includes the Schwab PCRA option. You must already be enrolled in your 401(k) plan before you can open a brokerage account.

Before You Open a PCRA

  • If you never chose an investment allocation when you enrolled, your contributions may have defaulted into your plan’s Qualified Default Investment Alternative (QDIA).
  • In this case, you’ll need to first select a core investment strategy before the option to open a brokerage account becomes available.
  • Once eligible, you can begin the process through your Ubiquity account.

Steps to Open a Schwab PCRA

  1. Log in to your Ubiquity account.
  2. From the left-hand menu, click 401(k) > Investment Allocation.
  3. Select Change Investment Strategy.
  4. Under Use a Brokerage Account, click Open an Account.
  5. Write down your:
    • Retirement Plan ID
    • Plan Password
  6. Review and agree to the Terms and Conditions.
  7. If you have an existing balance, approve the rebalance transaction. This will liquidate your current holdings and transfer them once the account is open.
  8. Go to Charles Schwab – Personal Choice Retirement Account and scroll to the bottom of the page to click Open Your PCRA (do not use the link at the top).
  9. Enter your Retirement Plan ID, Plan Password, and Social Security Number (without dashes), then follow the account opening wizard.

Processing time: Your account is typically opened within a few business days, with transfers completed within 10 business days.

Roth Contributions and Employer Contributions in Your PCRA

  • You do not have to open a second brokerage account for Roth contributions. Ubiquity tracks Roth contributions, earnings, and your Roth start date in our system to ensure accurate tax reporting.
  • Both Roth and pre-tax contributions can be invested within the same Schwab PCRA.
  • If you choose to open a second PCRA for Roth contributions, Ubiquity will still record keep both accounts and properly track your Roth and pre-tax balances.
  • Employer contributions (such as match or profit sharing) are always pre-tax, but they can also be invested in the same PCRA.

Brokerage Account Fees

  • Ubiquity charges:
    • $100 when your PCRA is opened
    • $100 annually while your account remains open
  • Schwab may charge additional fees for specific investments or transactions.

Closing a Schwab PCRA

You may close your PCRA at any time. To avoid the annual $100 fee, complete the closure steps at least two weeks before your account anniversary date (the month and day you originally opened the account).

Steps to Close:

  1. Liquidate all investments in your Schwab PCRA and move funds into cash.
  2. Log into your Ubiquity account.
  3. Navigate to 401(k) > Investment Allocation (or Investment Options to review available funds).
  4. Click Change Investment Strategy.
  5. Select a new investment strategy.
  6. At the bottom of the screen, click Rebalance my existing account balance.
    • This will move your funds out of the brokerage account, reallocate them into your selected strategy, and update future contributions.

Processing time: Closing and reallocating funds may take up to 14 business days.

Need Help?

If you have questions about your investment election, QDIA status, Roth contributions, or opening/closing a Schwab PCRA, email us at info@myubiquity.com.