Millennium Trust Company - Resources - Frequently Asked Questions


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Self Directed IRAs

1. What is an Alternative Investment?
An alternative investment is any asset that is not publicly traded. Examples of alternative investments are: private placements, annuities, mortgages, mortgage backed securities and real estate.
2. How do I invest in an Alternative Investment?
Some securities need to go through an administrative review of process before an investment can be made. The review process usually takes 2 to 5 business days. Once a security is reviewed and approved and we are in receipt of all properly executed documents; the investment can then be made. Different procedures are followed for different types of investments. You should contact our Alternative Investment Department for specific details.
3. If I open a new account with Millennium Trust, how long would it be before my alternative investment is made?
All new accounts must go through a 7 day revocation period. After the 7 days has passed, the investment has been reviewed and approved (if required), properly executed investment paperwork completed for the purchase and your funds have cleared (5 business day hold on all checks) the alternative investment can then be made.
4. How are my funds sent for the purchase of an Alternative Investment?
Funds are sent out by wire transfer or check. Paperwork is sent by regular mail or if directed, express mail (fees apply).
5. How would you reflect the value of my Alternative Investment?
Unlike a publicly traded asset where values are updated daily, alternative investments require periodic valuations. These valuations can be obtained from many different sources. Millennium receives information from the company in which you invested, independent pricing firms and/or appraisals. The information taken from these sources is used to update your account value. This information is reported to you by internet access and/or quarterly account statements.
6. Does Millennium Trust provide investment advice?
No. Millennium Trust performs the duties of an IRA custodian and, as such, does not provide investment advice or sell investments, nor offer any tax or legal advice.

Automatic Rollovers

1. Does Millennium Trust comply with the Department of Labor Safe Harbor requirements?
Our Automatic Rollover solution fully complies with the Safe Harbor regulations of Section 657(c) of the Economic Growth and Tax Relief Reconciliation Act of 2001. We are uniquely positioned to service a large volume of small IRA accounts. We have developed a very complete and efficient process which is flexible and client friendly.

2. What experience does Millennium Trust have with Automatic Rollovers?
Millennium Trust has been interested in providing Automatic Rollover services since the law changes were announced in 2001. We were involved in 2002 and 2003 with the Profit Sharing Council of America with lobbying efforts in Washington to improve proposed regulations. We rolled out our Automatic Rollover solution in October of 2004 after the Department of Labor published their final regulations. We are working with numerous record keepers and TPAs to provide Automatic Rollover services to their plan sponsor clients and as of January 1, 2006 we have agreements with approximately 1,500 plan sponsors to use Millennium Trust's Automatic Rollover services

3. How does Millennium Trust gather information from plan sponsors?
Our Automatic Rollover services begin with providing an Automatic Rollover Services Agreement to the plan sponsor. We provide it electronically and/or in hard copy. We discuss with the plan sponsor and record keeper the best method of sending participation information. We have developed technology to accept a simple data export from the record keeper. We practice 128 bit encryption and the account creation process is automated with extensive logging to ensure each participant's account is created. Participation information includes the participant's name, address, social security number, birth date, amount and plan name. With this information, we automatically open IRA accounts and populate the Adoption Agreement which is sent to the participant immediately. We prefer to receive account balances via wire transfer but will accept check distributions also. We then provide the plan sponsor with confirmation that we opened the IRA accounts and received account balances.

4. What does the participant receive?
Upon opening the IRA account, we send each account owner a professionally packaged Welcome Kit. This kit is well organized and comprehensive, including information about Millennium Trust, how the money is invested, the cost to the account owner, and how to contact us. The Welcome Kit includes the Adoption Agreement, a Fee Schedule, the Custodial Agreement and Disclosure Statement.
Our dedicated service team is available by phone, email, fax or in person. Each team member is experienced with IRA accounts and well trained on IRS distribution rules. Our service team utilizes a state of art trust accounting system that keeps track of the underlying investments, transactions, tax reporting, etc. Our 800 line, email address and fax line are dedicated Automatic Rollover lines.
Each IRA account owner is offered web access to their account or annual statements. We provide tax reporting including Form 5498 each year.

5. What investment vehicle is available?
The initial investment is a FDIC insured bank money market vehicle which offers a premium interest rate for investors seeking to minimize risk, preserve principal and maintain liquidity. Other investments including CDs, mutual funds, stocks, bonds, etc. are available upon request by the account owner.

6. What does Millennium do with wrong addresses?
In situations where we are provided wrong addresses, we will search for the account owner in the initial year and every three years thereafter through a locator service. We will resist attempts by state or government agencies to claim these funds by rule of escheat or otherwise. Our goal is to help the IRA account owners to preserve tax deferred savings.
7. Does Millennium Trust handle Roth 401(K) rollovers?
Yes. Automatic Rollovers are available for Roth 401(K) transfers. For participants with both pre-tax and Roth 401(K) balances, a traditional IRA and a Roth IRA will be required to hold each type of money. Millennium Trust expects that additional guidance from the Department of Labor will be provided in the near future.
8. Does Millennium Trust take rollover distributions from terminated plans?
Yes. Like any ongoing plan, any benefits of $5,000 or less from a terminated plan may be rolled over to an IRA under the Automatic Rollover Safe Harbor regulations. For balances greater than $5,000, plan sponsors are required to take additional steps, as outlined in Field Assistance Bulletin No. 2004-02, to search for lost participants before the transfer can take place. We also accept rollovers from abandoned plans.

Health Savings Accounts

1. What is a Health Savings Account?
A Health Savings Account (HSA) combines the efficiencies of a high-deductible health plan with extensive banking and investment options in a tax-free account - similar to an IRA. HSAs can be established by an eligible individual or by an employer for an eligible employee. HSAs are funded and owned by the account holder and are portable. Any unused funds remain in the account and grow tax-free until withdrawn for qualified medical expenses --the funds remain in the control of the account holder. More and more individuals and employers see HSAs as a smart way to prepare for rising healthcare costs in the future while saving on taxes today. Our integrated FlexHSA® offers a unique approach to Health Savings Accounts.

2. What makes FlexHSA® unique?
FlexHSA® combines the efficiencies of a high-deductible health plan with extensive banking and investment options to offer the complete HSA experience - through a single point of contact. FlexHSA® offers benefit expertise, easy access to your funds through a debit card or checking capabilities, a broad range of investments, and an internet-based technology platform, Personal Cash Manager (PCM), that enables you to manage and view all of your banking and investment activity in one account. We offer flexibility and choice through two account levels: the Premier Account tailored to individuals who want to accumulate and grow their assets or the Traditional Account for those only seeking basic banking services.

3. Are there limitations on the investments I can make in my HSA?
While the majority of HSA administrators offer a limited selection of investments or a simple interest-bearing checking account, alone, FlexHSA® is unique in our ability to offer open architecture -- a broad range of investment options. FlexHSA® allows you to select from virtually any traditional or alternative investment including: stocks, bonds, nearly 10,000 mutual funds, hedge funds, limited partnerships and more.

4. How can I view and track investments and available assets in my account?
Our unique online technology platform, Personal Cash Manager (PCM), allows you to access and manage your banking and investment activity in a single location including: trading capabilities in stocks, bonds and mutual funds; account summaries; transaction history; portfolio allocations; monthly statements; a downloadable list of investments and more. PCM integrates all of your FlexHSA® activities into one, single account. A Personal Cash Manager demo is available on our website or at www.flexhsa.com.

Personal Trust Administration

1. As an advisor, why should I use Millennium Trust for trust services?
Millennium’s sole business purpose is to service the administrative needs of Advisors without competing with them for their clients. Our company provides sophisticated custody, recordkeeping, safekeeping, trading, and trust fiduciary services to Asset Managers, Lawyers, Accountants, and other professionals that require our specialties.
We are an independent privately owned firm dedicated to the trust and custody business. Our focus is not diluted by banking, insurance, or brokerage services.
We have extraordinary experience in the trust industry with multiple decades of experience with both major and middle market trust organizations.
We do not manage investments.

2. How are assets safeguarded?
Millennium Trust ensures that unaffiliated third parties conduct thorough examinations of all trust operations. This includes the State of Department of Professional and Financial Regulation, Financial audits by Scanlon and Mathews, and technology audits by Plante Moran. Millennium Trust holds insurance far higher than required and is described in detail in our Safeguards section. We typically employ sub-custodians to hold trust assets, such as Fidelity and Marshall & Illsley Bank, and perform extensive due diligence on all partners to further protect wealth. Lastly, we do not utilize in house or affiliated investment vehicles to hold or sweep cash positions, and employ Metavante’s accounting system to track assets rather than an internal system.

3. Will I be able to retain my current Investment Advisor to manage my assets?
Millennium Trust does not perform any investment management and all trusts are managed by outside Advisors. As your fiduciary, we are required to oversee the investment of your assets in accordance with your investment policy statement and the trust itself. As such, we work with Advisors, performing due diligence to make sure your goals are being met. In this environment, you certainly have the option to maintain your current advisor, or make changes should that be necessary or desired.

4. Will Millennium Trust be able to act as my trustee even if I am not an Illinois resident?
We can act as trustee for individuals living in most states. Millennium’s main office is in and while we visit clients as needed, we have no employees or agents in other states. New clients are defined consequently as Advisor referrals.

5. How does Trust Administration fit with Millennium's other services?
Millennium Trust is dedicated to providing services to Advisors, especially those services that Advisors do not or cannot offer. Our record keeping, tax, trading, IRA and HSA administration, alternative investments, automatic rollover solution, and Trust Administrative services fill an important Advisor need without competing with the Advisor.

Advisor Services

1. Does Millennium Trust provide omnibus trading support?
Millennium Trust is acknowledged to be a specialist in supporting omnibus (master account) trading by RIA firms and hedge funds. Our omnibus platform(s) allow the investment manager to make transactions at a macro-level for any number of clients, while delegating the client custody allocation, record keeping, and tax reporting to Millennium Trust.

2. What investment categories are supported by Millennium Trust?
All listed U.S. securities, including ADR’s, UIT's, and ETF's can be custodied at Millennium, in addition to mutual funds, futures, options, and various hedge funds and alternative investments. Moreover, many of these securities can be combined to enhance performance, such as equity basket trading as an alternative or supplement to mutual fund investing.

3. Is client account aggregation possible with other custodians?
Yes. Client account data can be aggregated through data feeds to any data aggregator. This is typically accomplished by providing us with a data map of the required information.

4. What are the pricing and billing alternatives available?
Millennium Trust’s charges are directly dependent on the actual services performed for the client. As opposed to a set fee schedule, every client relationship is independently priced in order to deliver the maximum level of service with the least cost. Investment Advisors and other asset managers have significant flexibility in how custody and other administrative costs are paid. In practice many Advisors request that their fees and custody charges be charged to the client’s custody account on a quarterly basis, but other options exist depending upon the Advisor’s requirements and their client’s expectations.

5. Can my clients obtain account information without paying for periodic statements?
Yes. Custody clients (and Trust clients) can view their account activity and balances using an internet connection to a Millennium service called InvestorWeb. The Advisor also has the capability, except they can view the activity and balances for all of their clients’ accounts on a service known as AdvisorWeb. In each case the service is available on a “24/7” basis.