Storm Reserve Accounts

Being a reliable source of power is essential for your community, but it isn’t easy. You have to be prepared to respond to storms and natural disasters. You have to constantly stay ahead of aging equipment and materials. You have to build reserves against these major costs while also keeping member rates down.

Our Role 

Mutual fund corporate accounts can be an effective way to build these reserves, and Homestead has helped numerous cooperative executives set up these accounts to address emergencies or to plan large capital spends. These reserve accounts are available when you need them – no waiting for FEMA or bank loan approvals. Not only might they help reduce debt levels and financing costs, but they can help you plan for major expenditures, such as replacing a fleet of trucks. 

Establishing an Account

When setting up storm reserve accounts, cooperatives need to be sure these accounts will not interfere with FEMA eligibility. Refer to our Storm Reserve Accounts Overview brochure and the Memorandum for background and clarifications provided by NRECA and outside legal counsel.

Assets are held in the cooperative’s name, typically in an entity account. Co-ops can fund the account with investments made automatically from a bank or credit union or deposited in lump sums.

Making Transactions

Accounts may be funded by indicating your investment method on the 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 an Authorized Agent of the account if that option was selected on the application or online if login credentials have been established. If you did not elect telephone privileges, your request must come in writing. You may update your telephone transaction options at any time by submitting the  Account Services 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 or online by an Authorized Agent of the Account. Telephone/online distributions can only be made if that option was elected on the application. If you did not elect telephone/online privileges, your request must come in writing with a Medallion Signature Guarantee. You may update your telephone transaction options at any time by submitting the Account Services Form.

If your distribution request is more than $50,000 in any one fund, or if you instruct us to send proceeds to an address, party or bank account that we do not have on file, the Authorized Agent must submit the request in writing on the Account Distribution Request Form and include a  Medallion Signature Guarantee.

Account Maintenance

To update the Authorized Agents on your account, complete the  Entity or Trust Account Authorization Form. Make sure to list all of the Inquiry-Only Agents and Full Account Access Agents on the form because the Agents listed on the form will replace prior Agents on file. The form must be signed by a Full Account Access Authorized Agent already on file (or one being added). You must include the entity documentation or trust documents showing the updated account signers.

To update account basics such as address, telephone/internet options, dividend and capital gains options, and bank information, use the  Account Services Form. Some updates may be able to be done online as well.

See the Case Study