A FAS-106 account allows organizations to fund post-retirement medical benefits to retirees. Your cooperative can invest with a goal of long-term appreciation while still having access to your account assets to meet ongoing expenses related to retiree health care.
Homestead Funds acts as the investment vehicle for your FAS-106 account assets. Your cooperative must have a FAS-106 Trust in place before opening an account with Homestead Funds. Once the account is open, you receive the same high level of customer service as our other shareholders, and you have the same mutual fund choices available for your account. Additionally, the Trustees of the FAS-106 account can work with our advisors to receive asset allocation guidance at no additional cost. To learn more about how to establish the FAS-106 Trust, contact your NRECA field representative.
Asset allocation does not guarantee a profit or protect against a loss in a declining market. It is a method used to help manage investment risk.
Establishing a FAS-106 Account
Once your cooperative has established a FAS-106 Trust and is ready to begin investing with Homestead Funds, you will need to complete the FAS-106 Account Application to open the account.
- The account must be tied to the FAS-106 Trust Tax Identification Number.
- Indicate that you want telephone transactions on the application. This allows any Trustee to make distributions, exchanges and purchases over the phone with us. Otherwise, all requests must be submitted in writing and signed by a Trustee. All distribution requests would also need to be submitted with an original notary using the FAS-106 Distribution Request Form.
- All mailings will be sent to the cooperative address. You can request that Trustees receive a duplicate copy of the quarterly statement and confirmation statements by completing that section of the application.
- Provide cooperative-owned bank account information on the form to expedite FAS-106 transactions.
FAS-106 accounts may be funded by indicating your investment method on the FAS-106 Account Application. Money can be submitted to Homestead Funds by check, ACH transfer or wire transfer. Please call 800.258.3030 for wire instructions.
Rebalancing and Moving Money
Account rebalances or fund exchanges can be made over the phone by a Trustee of the FAS-106 account if telephone exchange was elected on the application. If your cooperative does not allow telephone exchanges, your request must come in writing. You may update your telephone transaction options at any time by submitting the FAS-106 Account Maintenance Form.
Rebalancing can entail transaction costs and tax consequences that should be considered when determining a rebalancing strategy.
Account distributions by check, ACH transfer or wire transfer can be made over the phone by a Trustee of the FAS-106 account if telephone distribution was elected on the application. If your cooperative does not allow telephone distributions, you must complete the FAS-106 Distribution Request Form. The distribution form must:
- Be signed by a Trustee of the FAS-106 account on file with Homestead Funds
- Be notarized
- Be received by mail using either mailing address at the top of page 1 of the form
If you instruct us to send proceeds to an address, party or bank account that we do not have on file, the Trustee’s signature must be Medallion Signature Guaranteed on the distribution form. You may update your telephone transaction options at any time by completing the FAS-106 Account Maintenance Form.
For a verification of assets letter to provide to auditors at the end of the fiscal year, cooperatives can request a letter by submitting a written request. The request must:
- Be signed by a Trustee on file with Homestead Funds
- List the FAS-106 account number and Trust Tax ID number
- Provide the address or fax number to return the letter. We are unable to email verification of asset letters.
To update the Trustees on your FAS-106 account, you can complete the FAS-106 Account Maintenance Form. All Trustees will need to sign the form, even those currently on file, because the Trustees listed will replace prior Trustees on file. Their signatures must be notarized. Trustees are authorized to make transactions and sign paperwork on behalf of the cooperative for the FAS-106 account.
To update cooperative information currently on file, you may complete the FAS-106 Account Maintenance Form.
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