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Frequently Asked Questions (FAQs)

Getting Started

  1. What is a self-directed IRA?

    A self-directed Individual Retirement Account (SDIRA) only differs from other Individual Retirement Accounts (IRAs) in that the IRA owner has more control and flexibility when it comes to choosing investments. Typically, IRA investments are limited to exchange-traded assets like stocks and bonds. A custodian like PENSCO offers self-directed IRA owners expanded investment options that include alternative investments.

  2. Why would I invest in alternative investments using my IRA?

    Alternative investments have grown increasingly popular for two primary reasons:

    1. Diversification benefits
    2. Opportunity for enhanced returns

    When held in a self-directed IRA, earnings from alternative assets can grow tax-deferred (or tax-free, in the case of a Roth IRA). Learn more about the advantages of alternative investments.

  3. What are some of the things I should consider when making a self-directed IRA investment?

    Expertise:  You should have knowledge and familiarity with the alternative investment type and vehicle in which you've chosen to invest.  You can also consult with a subject matter expert in this area, and we always recommend that you talk to a tax, legal or financial professional before investing.

    Being hands-on: There’s generally more legwork involved with alternative investments than with traditional, exchange-traded investments, including the provision of required paperwork, obtaining valuations for your assets, and managing expenses associated with the investment.

    Having control: Most of our clients choose self-directed IRAs because they want to have control over what they can buy with their tax-advantaged funds – and that makes it worth the extra time and effort it may take to manage the investments.

    Take a look at our case studies for a real estate investor or private equity investor.

  4. What is the role of my self-directed IRA custodian?

    If you choose to invest in alternative assets with an IRA or other qualified plan, you must have a self-directed IRA custodian.  This is required by the IRS.

    The self-directed IRA custodian responsible for holding and administering the assets of your account. There is extensive recordkeeping required by the IRS and the self-directed IRA custodian should help you handle the reporting of all investment activity within the account, including quarterly reports, processing of annual asset valuations and other documentation.

    Investors and their advisors — not the IRA custodian — are solely responsible for evaluating the investment’s merits and suitability. As the term "self-directed IRA" implies, you are in control and making all investment decisions.

    For more information about working with a custodian, click here.

  5. Why should I choose PENSCO as my alternative asset custodian?

    PENSCO is the leading alternative asset custodian, with more than two decades of experience holding private equity, real estate, notes and other non-exchange traded assets. We possess knowledge of and experience with IRS rules and regulations for holding alternative investments in IRAs, and we are dedicated to continuing to innovate technology to streamline the alternative asset investment process.

    Dependent on the behavior of the investment, the sponsor of the investment, and the structure of the investment, it can be difficult to maintain the asset according to IRS guidelines.  PENSCO will work with you, your advisor, and your investment sponsor to help guide you through the investment and asset maintenance process. PENSCO does not approve or endorse the actual investment and we do not perform any due diligence or determine the suitability of a particular investment.

    More information about choosing a custodian can be found here.

Managing Your Account

Opening an Account

  1. How do I open a PENSCO account?

    PENSCO’s easy and secure online application will guide you through opening a Traditional, Roth or SEP (Simplified Employee Pension) IRA.

    Please click here if you would like to open another type of retirement account or plan.

Funding Your PENSCO Account & Transfers In

  1. How do I fund my new PENSCO account?

    You can fund your new PENSCO account by electing to transfer cash and/or assets into the account using our online application process. Alternatively, you can fill out a PENSCO Transfer/Rollover form, which can be found here  if you are transferring funds from a Traditional, SEP or Roth IRA, or here if you are transferring funds from a SIMPLE IRA.

    Another way to fund your PENSCO account is to rollover funds from a qualified account at another institution.  Please contact your current custodian to find out more information about rolling over funds to a PENSCO IRA.

  2. How do I transfer/rollover cash and/or investments into my PENSCO account?

    It’s easy to add cash and/or assets to your PENSCO account. You can do so online, when you first open your account, or you can do so later by filling out a paper Transfer/Rollover form. Be sure to have access to your current custodian information (firm, account number, contact number, etc.) when completing the form.

    If you are transferring assets in-kind, you will need to provide instructions to PENSCO on which assets to transfer from your current account. Detailed instructions on how to do this can be found in the online form and the paper form.

    If you are rolling over from another qualified plan, please instruct your current plan to send cash and/or assets to PENSCO. Please be aware that rollovers are subject to certain IRS rules that limit your ability to roll over funds from an IRA over a 12-month period, as well as rules stating that once assets are distributed to an individual, he or she has 60 days to roll them over into another qualified plan.

  3. How long does it take to transfer/rollover cash and/or investments into my PENSCO account?

    PENSCO initiates fund transfer requests within two business days of receiving them. Non-cash assets may require additional documentation or time for review. You can call (800) 962-4238 to discuss the potential timeline for your specific situation.

    Please be aware that some custodians may take much longer to process transfer requests; for example, a 401(k) rollover could take several weeks.

    The transfer process varies depending on the type of transfer and if there are assets that are being transferred in-kind. Cash-only transfers typically take a few business days, especially if the current custodian is an ACATS member (which PENSCO is as well).

    Assets being transferred in-kind must go through an administrative review and this review process depends on how quickly PENSCO receives all the necessary documents from you and/or the investment sponsor.

  4. When is the last day to make a contribution to my IRA for the 2016 tax year?

    Tuesday, April 18, 2017, for most people. (Massachusetts and Maine are on the following day due to a legal holiday.)

Transfers Out

  1. How do I transfer/rollover cash out of my PENSCO Trust account?

    Similar to incoming transfers, the process is initiated by the receiving custodian. In this case, you must instruct your new custodian to send the cash transfer request to PENSCO.

    Alternatively, you can choose to roll over funds directly from your PENSCO account to a non-qualified plan or take those funds personally by making a cash distribution to yourself by using our PENSCO distribution form.  If you choose to take the funds as a distribution to yourself personally, please be aware that those funds will be subject to taxes if they are not deposited into another qualified account within 60 days of distribution.

  2. How do I transfer or distribute an asset out of my IRA?

    Similar to the outgoing cash transfer process, you must instruct your new custodian to send the in-kind asset transfer request to PENSCO. Once the asset has been accepted by your new custodian, PENSCO will release it to the new custodian and remove it from your list of holdings.

    Alternatively, in-kind distributions can be processed through a distribution request by using the re-registration option. This gives you the ability to indicate the investment you wish to put in your name and hold outside of the IRA. Additional paperwork may be required for certain assets such as real estate. The last known value of the asset will be reported as a taxable event on IRS form 1099R.

Distributions

  1. How do I take a cash distribution from my account?

    PENSCO offers three convenient ways to take a distribution from your account:

    1. Log in to your account, and then select Distributions followed by Request Distribution.

    2. Submit an PENSCO Distribution Request form.

    3. If you’ve taken a cash distribution from your account before, one of our Customer Service Representatives can take your request over the phone. Call us at (800) 962-4238.

  2. How long does it take to receive my funds when I request a cash distribution?

    If sufficient cash is available in the account at the time of your request, all requests submitted before 1 p.m. MT will generally be processed the same business day. Requests submitted after 1 p.m. MT will be processed the next business day.

    Depending on the delivery method you choose, you will receive your funds:

    Wire: Same or next day

    ACH (direct deposit): Three business days

    Check sent via U.S. mail: Generally three to five business days, depending on postal service in your area

  3. How do I set up a recurring cash distribution from my PENSCO account?

    Similar to taking a regular distribution, the option for setting up a recurring distribution can be found by logging in to your account, or by filling out the PENSCO Distribution Request form.

  4. What is a Required Minimum Distribution (RMD)?

    A Required Minimum Distribution, or RMD, is the required amount that Traditional, SEP and SIMPLE IRA owners and qualified plan participants must begin distributing from their retirement accounts by April 1 following the year they reach age 70½. RMD amounts must then be distributed each subsequent year. (Generally, RMDs only apply to Traditional, SEP and SIMPLE IRAs and not Roth IRAs.)

    Your RMD will be based on your age, your IRA’s previous year account balance and a “life expectancy factor” that is provided by the IRS. The institution(s) where you hold your account(s) can calculate your RMD. However, institutions cannot see all the IRAs that you may hold in other places, so it is ultimately your responsibility to determine the total RMD amount for all of your accounts.

    You can read more about RMDs on the PENSCO blog.

  5. How do I satisfy my RMD?

    IRA account owners can choose to take their cumulative RMD amount from one account, or by taking smaller amounts from all or some of their IRAs. The RMD does not have to be taken from just one or all of your qualified plans.  Qualified plan participants who are required to take RMDs must take a withdrawal from each plan in which they are a participant (or have a balance).

    If you choose to take all or some of your RMD from your PENSCO account, you have three options to request your distribution:

    1. Log in to your account, and then select Distributions followed by Request Distribution.

    2. Submit an IRA Distribution Request form.

    3. If you’ve taken a distribution from your account before, one of our Customer Service Representatives can take your request over the phone. Call us at (800) 962-4238.

Service Charges

  1. What are PENSCO’s service charges?

    You can learn more about PENSCO’s retail service charges here.  Please be aware that fees vary depending on the type of account you hold with PENSCO and the services you require.

Conversions

  1. How do I convert my Traditional IRA at PENSCO to a Roth IRA?

    To request a conversion, you can complete the PENSCO IRA Conversion/Recharacterization form.  Please note that you may be subject to taxes by converting Traditional IRA assets into a Roth IRA.

General Account Maintenance

  1. Where can I find my PENSCO account number?

    You can find your account number by logging into your PENSCO account. Alternatively, you can find your PENSCO account number on your statement or your account service summary.

  2. How do I add or change my banking instructions on file?

    You can change your banking instructions at any time by completing the ACH Instructions for Distribution form and returning it to us with a voided check. Return instructions are included on the form

  3. Who do I contact for questions regarding my account or my statements?

    You are always welcome to call our Client Service Team at (800) 962-4238 with any questions.

Online Account Access & Maintenance

  1. How do I register to access my account online?

    Getting registered for access to your PENSCO account online is quick and easy. Once you complete the short, one-time registration process, you will have immediate access to your accounts.  To register, you will need your PENSCO account number, your social security number, date of birth and your current email address.  Click here to register.

  2. How do I update my contact information?

    Keeping your contact information up-to-date is a quick and easy process. You simply log in to your account and select My Profile. From there, select Contact Information to update your contact information (including your email address).

  3. How do I change my security questions and answers?

    You simply log in to your account and select My Profile, followed by Security Information.

  4. How do I change my credit or debit card information?

    At PENSCO, we require all clients have up-to-date credit or debit card information on file. To change your information, log in to your account, select My Profile, then Payment Preferences, followed by Change, which is located above your card number.

  5. How can I give my spouse or other interested party view-only access to my account online?

    To give your spouse or another individual read-only access to your account online, complete and submit the Interested Party Authorization form. Once we receive the request, a contact ID will be assigned to the individual. Your designated interested party can then register online and select "Affiliated to an Account," then enter your account number and their contact ID. Note that interested parties cannot request transactions on your behalf.

  6. I have access to my account online but still don’t see my transactions. How do I view them?

    Once you log in to your account, click on your account number to view your detailed account information. From there, you can select the Transactions tab to see transactions from the past 30 days. To view older transactions, simply change the date in the "Settle Date-From" field. If you want to change the number of rows displayed, select My Profile and change the row count under Display Options.

Closing Your PENSCO Trust Account

  1. How do I close my PENSCO account?

    A common way to close your PENSCO account is to complete the Distribution Request form. Under Payment Options (Section 4), select C. Total Distribution, and submit the form to PENSCO. You can also log in to your account online, select Distributions followed by Request Distribution.  Alternatively, you can call our Client Service Team at (800) 962-4238 to request a distribution over the phone.

    Another common way to close your PENSCO account is to request a full transfer to another institution.  Those types of transfers are initiated at the new, receiving custodian.  When making the request to PENSCO, the receiving custodian can indicate that you wish to make a full transfer and close your current PENSCO account.

  2. What are the service charges associated with closing my PENSCO account?

    There is generally a one-time account closure service charge as well as separate re-registration fees for assets being transferred/distributed in-kind. Please review your fee schedule or call PENSCO’s Client Service Team at (800) 962-4238 for a complete breakdown of fees.

Alternative Investing

Key Factors to Consider When Making a Self-Directed IRA Investment

  1. What types of alternative assets are permitted in a self-directed IRA?

    You can hold numerous types of alternative assets in your self-directed IRA, including, but not limited to:

    *Real estate
    *Private equity
    *Promissory notes
    *Offshore funds
    *Precious metals

    For more information on permissible alternative assets, check out our Investing Options page.

  2. What types of investments or transactions are prohibited in a self-directed IRA?

    A self-directed IRA gives you many more investment options and more flexibility than other retirement accounts. However, the IRS does prohibit certain investment types and transactions, and also restricts the ways you can use your investments.

    You can find a comprehensive list of these rules here or check to see if your deal has any potential red flags with our Opportunity Analyzer.

  3. How do I identify a fraudulent investment?

    As alternative investing has grown, so too has the prevalence of investment fraud. PENSCO has blogged extensively on this issue, and we encourage clients to be aware of investment fraud warning signs. The following are some red flags that may signal a fraudulent investment:

    * Promise of excessive rates of returns
    * Assurance that investment is “safe and secure”
    * Pressure to “act fast”
    * Any tone of desperation (e.g., “I need to make payroll”)
    * Missing pages or incomplete documentation
    * Unprofessional or hard-sell marketing presentations
    * The promoter’s professional background is inconsistent with the investment idea
    * Any mention of insider information

    More information about investment fraud and how to spot it can be found here.

  4. When do I need to be concerned about UBTI or UDFI?

    PENSCO provides an overview of the circumstances that could trigger UBTI (Unrelated Business Taxable Income) or UDFI (Unrelated Debt-Financed Income). However, before making any investment decisions, it’s important that you consult with a tax professional or financial professional to help with your unique situation. If you need help finding a tax professional, you can check out our Professional Directory.

General Alternative Investment Questions

  1. How do I make an investment in an alternative asset with funds from my PENSCO account?

    The investment process will vary depending on the type of asset you plan to purchase. PENSCO has developed checklists to get you started. Simply click on your asset type below:

    Real estate (PDF)
    Private equity (PDF)
    Unsecured note (PDF)
    Secured note (PDF)
    Convertible note (PDF)

    To learn more, please visit our Pre-Investment Checklists page. 

  2. How should the name of the investor be titled on documents related to my investment?

    For all investments made using funds from an IRA at PENSCO, the name of the investor on all investment documentation should be titled "PENSCO Trust Co Custodian FBO (Your Name) (Type of Account)".

  3. How long does it take for my investment transaction to be completed?

    At PENSCO, we do everything possible to keep the investment process moving along smoothly and quickly. Please keep in mind the process will vary based on the type of asset being acquired and any outside paperwork that needs to be completed.

    Once PENSCO receives all of your required documents, the asset review process will take between two and three business days. Documents required from third parties will be reviewed within one to two business days of receipt. It typically takes anywhere from five to 10 business days for PENSCO to receive third-party documents.

Real Estate Investment Questions

  1. Can I buy real property with funds from my PENSCO account? How?

    Yes. For many years, PENSCO account holders have seen the benefits of investing in real property using their self-directed IRAs.  We have blogged extensively about the subject as real estate is one of the most popular investment types that clients hold in their accounts at PENSCO.

    To make a direct real estate investment, PENSCO’s real estate investment checklist outlines all of the documents that will you need to assemble to purchase property with your self-directed IRA funds. Just fill out the appropriate forms and submit them with the other required documentation to get started.

    You can also call our Client Service Team at (800) 962-4238 for more information and assistance.

  2. How can I purchase a piece of property with my PENSCO account if I only have enough cash available to cover a portion of the purchase price?

    Self-directed IRA investors may be able to use a non-recourse loan to help finance a real estate investment.  You can learn more about non-recourse loans on the PENSCO blog or connect with non-recourse lenders through the PENSCO Professional Directory.  

    Keep in mind that the IRA must make all loan payments on non-recourse loans (the IRA owner may not make payments personally).   Additionally, any income produced by a debt-financed property held in an IRA may result in UDFI tax liability.  Click here for more information.

  3. Can I invest in a Real Estate Investment Trust (REIT) with funds from my PENSCO account?  How?

    Yes.  The process will depend on whether you are purchasing a public or private REIT. To purchase a publicly traded REIT, you will need to fill out a standard Investment Authorization form. Private REITs can be purchased by filling out a Private Equity Investment Authorization form.  If you are purchasing a private REIT, it may be necessary for the investment sponsor to complete this Private Equity Investment Notification form and submit it to PENSCO.

    If you have questions, you can reach our Client Service Team directly by calling (800) 962-4238.

  4. Can I invest in tax liens and tax certificates with funds from my PENSCO account? How?

    Yes. Experienced real estate investors have been investing in tax liens and tax certificates for years because of their potential rates of return. Simply fill out the Tax Certificate Investment Authorization form along with the other required documentation and submit it to PENSCO. 

Note Investment Questions

  1. Can I buy or invest in deeds of trust, mortgage-backed notes or secured notes using funds in my PENSCO account? How?

    Yes. Investing in deeds of trust or other secured notes has been a common strategy for investors looking to diversify their portfolios. Many investors also look to these types of investments for their generally steady stream of income via principal and interest payments which flow back into their PENSCO accounts, as well as the security that comes with an investment backed by real property or other collateral.

    To start the investment process, please fill out the Secured Note Investment Authorization form and return it to PENSCO along with the other required documents.

    If you have any questions, you can speak with our Client Service Team by calling (800) 962-4238.

  2. Can I make an unsecured loan to an individual or company with funds from my PENSCO account? How?

    Yes. Many investors have found that note investments can be a viable way to help grow your retirement account. You can make an unsecured loan with funds in your PENSCO account by filling out this Unsecured Note Investment form and returning the completed form to PENSCO along with the other required documents.

    If you have any questions, you can speak with our Client Service Team by calling (800) 962-4238.

  3. Can I make a convertible note investment with funds from my PENSCO account? How?

    Yes. Companies, especially start-ups, have issued convertible debt as part of their financing strategy and that strategy is still one of the most common ways for early-stage start-ups to raise capital in today's ever-changing financial landscape. 

    To invest in a convertible note, simply fill out the Convertible Note Investment Authorization form and return it to PENSCO along with the other required documentsIn addition, the investment sponsor will need to complete the Private Equity Investment Notification form and submit it to PENSCO.

    If you have questions, check our our blog on convertible notes or you can call our Client Service Team directly at (800) 962-4238.

Private Equity Investment Questions

  1. Can I invest in a Limited Liability Company (LLC) with funds from my PENSCO account? How?

    Yes. LLCs are a common way for investors to make equity investments within their IRAs at PENSCO.  LLCs can be structured in many ways, ranging from single-member or "checkbook" LLCs to the more common multi-member LLC structure.  Because of the wide variety of structures and the costs associated with creating and setting up LLCs, please consult with a tax or legal professional before making any investment decisions. For more information, check out our blog.

    In order to invest in an LLC with your PENSCO account, the Private Equity Investment Authorization form will outline the steps you will need to follow to invest in an LLC.  In addition, the investment sponsor will need to complete the Private Equity Investment Notification form and submit it to PENSCO.

    If you have questions, you can reach our Client Service Team directly at (800) 962-4238.

  2. Can I invest in a Limited Partnership (LP) with funds from my PENSCO account? How?

    Yes. Limited Partnerships are another common way for PENSCO account holders to make equity investments. For more information, check out our blog, which details the difference between various equity investment types. Please be aware that LP structures and rules can vary so we recommend that you consult a tax or legal professional before investing.

    To invest in a Limited Partnership, please complete the Private Equity Investment Authorization formIn addition, the investment sponsor will need to fill out this Private Equity Investment Notification form and submit it to PENSCO.

    If you have questions, you can reach our Client Service Team directly at (800) 962-4238.

  3. Can I invest in Offshore Funds with funds from my PENSCO Trust account? How?

    Yes. Investing in offshore funds is another way for investors to diversify their portfolios.

    To get started, please fill out the Private Equity Investment Authorization form and return it to PENSCO along with the other required documentation. In addition, the investment sponsor will also need to fill out the Private Equity Notification form and submit it to PENSCO.

    If you have questions, you can reach our Client Service Team directly at (800) 962-4238.

Standard/Market Traded Investment Questions

  1. Can I buy mutual funds with my PENSCO account?

    Yes. Rather than simply holding excess cash in your account, you can invest that cash in mutual funds at no additional cost to you. PENSCO provides the option to invest in more than 20,000 mutual funds with our online trading tool. This allows you to invest your extra cash until you need it for an unexpected IRA-related expense, or until you uncover your next alternative investment opportunity.

    To get started, log in to your account, click on the "Invest" tab and then click on “Start a Mutual Fund Trade” and follow the outlined steps.  Alternatively, you can complete the standard Investment Authorization form or call our Client Service Team at (800) 962-4238 to place an order over the phone.

  2. Can I purchase an annuity with funds from my PENSCO account?

    Yes. You can use a self-directed IRA to invest in annuities just as you would with most other types of qualified accounts. Since many situations are unique, please call our Client Service Team at (800) 962-4238 for information about purchasing annuities.

  3. Can I buy and sell publicly traded equities (stocks) with funds from my PENSCO account?

    Yes. You can use a self-directed IRA to invest in publicly traded equities just as you would with most other types of qualified accounts. This gives you the ability to invest the cash in your PENSCO account into more liquid investments until your next alternative investment opportunity comes along.

    Since many situations are unique, please call our Client Service Team at (800) 962-4238 for more information about purchasing publicly traded securities.

  4. Can I buy and sell fixed income securities with funds from my PENSCO account?

    Yes. You can use a self-directed IRA to invest in fixed income securities just as you would with most other types of qualified accounts. Since many situations are unique, please call our Client Service Team at (800) 962-4238 for information about purchasing fixed income securities.

  5. Can I set up a Brokerage or Managed Account within my PENSCO account?

    Yes, you can set up a brokerage or managed account within your PENSCO account. Since many situations are unique, please call our Client Service Team at (800) 962-4238 for information about setting up a brokerage or managed account.

  6. Can I purchase a Certificate of Deposit (CD) from a third-party bank with my PENSCO account?

    Yes, you can purchase a CD from a third-party bank with your PENSCO account. Since many situations are unique, please call our Client Service Team at (800) 962-4238 for information about purchasing CDs.

  7. Can I invest in Dividend Reinvestment Programs (DRIPs) with funds from my PENSCO account?

    Yes. You can use a self-directed IRA to invest in DRIPs just as you would with most other types of qualified accounts. Since many situations are unique, please call our Client Service Team at (800) 962-4238 for information about investing in DRIPs.

Investment Maintenance

General Investment Maintenance

  1. How do I sell an alternative investment that I hold in my PENSCO account?

    The requirements for selling an alternative investment vary significantly by asset type and investment structure. Please be aware that certain alternative investments are not liquid and may not be able to be sold.

    Since most situations are unique, please call our Client Service Team at (800) 962-4238 for information about selling an alternative investment held in your PENSCO account.  

  2. I have a question about one of my investments. Who do I contact for help?

    Many questions about your investment can be answered by your investment sponsor, loan servicer, loan originator, mortgage broker, etc.  However, if your question is related to how your investment is reflected in your PENSCO account, you can call our Client Service Team at (800) 962-4238 or email clients@pensco.com.  

  3. The IRS requires that my custodian report the value of my IRA to the IRS on an annual basis. How do I provide valuation information that I may have to PENSCO?

    For real estate investments, you will receive a notice in January asking you to provide PENSCO with a comparative market analysis for the property. It is your responsibility to obtain this information, and you can submit it to PENSCO using our online Asset Valuation Tool.

    For private equity investments, a letter and notice will be sent to your Investment Sponsor requesting that they  provide PENSCO with a year-end value for your investments. It is always a good idea to check with your Investment Sponsor to ensure they have submitted the information to PENSCO.

Real Estate Investment Maintenance

  1. I own a piece of property in my PENSCO account and I rent it to a tenant. How should my rent checks be titled and where should they be sent for deposit?

    The checks should be titled: “PENSCO Trust Co Custodian FBO (Your Name) (Type of Account) .”

    All checks should be mailed to our Denver address:

    PENSCO Trust Company
    P.O. Box 173859
    Denver, CO 80217-3859

  2. How do I direct PENSCO to pay my investment property expenses from my IRA?

    No action is required to pay mandatory bills, such as property taxes, HOA dues, insurance, loan payments, utility bills, etc. unless you have a designated property manager who handles your investment property-related expenses (If you are using a property manager, please see the answer to the next question.).

    PENSCO processes mandatory bill payment upon receipt, as long as the funds are available in your IRA. For example, tax bills of $5,000 or less that are received by PENSCO will be paid in full by the first installment date, as long as you have the cash available in your PENSCO account. If you do not wish for PENSCO to pay mandatory bills from your account cash balance, please contact the bill issuer to update your preferred billing address.

    PENSCO does, however, require your authorization to pay optional bills such as property management advances, maintenance bills, attorney fees, and home improvement contractor invoices. In these instances, you may submit your expense request by logging in to your PENSCO account online.  

    Interested parties affiliated to your account may not authorize expense requests. If you would like to allow someone other than yourself to submit an expense request, please complete the Real Estate Expense Payment: Limited Power of Attorney form and submit it to PENSCO.

    Property managers affiliated to your investment are able to authorize expenses under $5,000 (excluding property management advances), provided the Expense Payment form is submitted to PENSCO along with supporting documentation such as bills, invoices or estimates.

    If you have any questions regarding investment property expenses and how they are handled, please call our Client Service Team at (800) 962-4238..

  3. How do expenses get paid if my real estate investment expenses are handled by a designated property manager?

    Your investment property manager is required to set up a property management account with a financial institution. This account should be funded with either income from the real estate investment (such as rental income) and/or funds transferred from your PENSCO account. The funds can then be used to pay for expenses related to the property held in your PENSCO account. Be sure to have the property manager notify the billing parties of this arrangement to ensure bills are sent directly to the property manager's address to avoid delays in payment.

    If you’d like to have funds transferred from your PENSCO account to your property manager's designated account, you can log in to your PENSCO account online to submit a request.

    Property managers affiliated to your investment are also able to authorize expenses under $5,000 (excluding property management advances), provided the Expense Payment form is submitted to PENSCO along with supporting documentation such as bills, invoices or estimates.

    Please call our Client Service Team at (800) 962-4238 if you have additional questions.

  4. How much money can I transfer from my IRA into my designated property manager’s account?

    The property manager’s account should include adequate funds to cover anticipated expenses related to the investment property. For instance, the account could include one quarter’s or one year's worth of expected expenses. The balance should not significantly exceed these projections.

  5. What kind of real estate expenses can the investment property manager pay?

    The investment property manager should pay all mandatory real estate expenses, such as property taxes, HOA dues, insurance, utility bills and mortgage payments. The property manager can also pay optional real estate expenses such as cleaning, construction and termite inspections.

    Property managers affiliated to your investment are also able to authorize expenses under $5,000 (excluding property management advances), provided the Expense Payment form is submitted to PENSCO along with supporting documentation such as bills, invoices or estimates.

  6. Is there any type of expense the investment property manager should not be paying?

    The investment property manager should not pay any type of expense that does not relate to the specific investment property held in your PENSCO account.

    If you are not sure whether an expense is allowed, please call our Client Service Team at (800) 962-4238.

  7. Can the IRA owner be an authorized signer/person on the property management checking account that is established for the individual property?

    No. The IRA owner cannot be an authorized signer/person on the property management checking account.

  8. Can the investment property manager authorize PENSCO to transfer funds from my PENSCO account to the property management account?

    No. Your property manager is not authorized to transfer funds.  We will need a letter of instruction executed by you, the account owner, to complete the transfer.

  9. Can the property management account pay the bills related to the investment property with funds that do not come from the IRA?

    No. All funds used to pay the IRA's allocable portion of investment property-related bills must be paid with IRA funds.

  10. If my IRA only owns a percentage of the real estate investment property held in my PENSCO account, does the IRA need to pay only its percentage of the expenses associated with such property?

    Yes. Your IRA must pay its percentage of the expenses based on the percentage of the account's ownership. For example, if your IRA owns 60% of a property and property taxes are due, your IRA should pay only 60% of the total bill.

Note Investment Maintenance

  1. I invested in an unsecured note, convertible note or Deed of Trust with funds from my PENSCO account. Where should my monthly principal or interest payments be directed?

    All payments should be mailed to:

    PENSCO Trust Company
    P.O. Box 173859
    Denver, CO 80217-3859

    Please make sure the payee on all funds for your account is listed as “PENSCO Trust Co Custodian FBO (Your Name) (Type of Account)."

  2. I invested in an unsecured note with funds from my PENSCO account, but the borrower is unable or has refused to pay me back. What are my options?

    You typically have three options:

    1. Pursue collection from the borrower via the collections process.

    2. Modify the terms of the note.

    3. In certain circumstances, you may be able to write off the investment as bad debt.

    Because each situation is unique, please contact our Client Service Team at (800) 962-4238 to review your options and keep PENSCO updated about the status of your investment.

  3. I invested in a Deed of Trust (or other secured note) with funds from my PENSCO account, but the borrower is unable or has refused to pay me back. What are my options?

    You typically have four options:

    1. Pursue collection from the borrower via the collections process.

    2. Modify the terms of the note.

    3. In certain circumstances, you may be able to write off the investment as bad debt.

    4. In some states -- and depending on the type of collateral instrument -- you have recourse for a delinquent note that is backed by real property. That means you could foreclose on the property and take the property in lieu of the note. In this case, you would obtain the property and that would become the asset in your PENSCO account, replacing the former note.

    Because each situation is unique, please contact our Client Service Team at (800) 962-4238 to discuss your options and keep PENSCO updated about the status of your investment.

Private Equity Investment Maintenance

  1. I own a percentage interest in a private equity investment in my PENSCO account. Where should dividend and return of capital payments be directed?

    Please direct all payments to:

    PENSCO Trust Company
    P.O. Box 173859
    Denver, CO 80217-3859

    Make sure the payee on all funds for your account is listed as “PENSCO Trust Co Custodian FBO (Your Name) (Type of Account)”. The private equity investment sponsor or issuer can also send payments electronically to PENSCO for your benefit (please make sure that the Account Owner’s name and/or account number is referenced in the wire information).

  2. I own a percentage interest in a private equity investment in my PENSCO account. Who provides PENSCO with a value for my portion of that investment?

    Your investment sponsor is responsible for providing the value of the investment to PENSCO.

    IRS rules stipulate that PENSCO report the value of your entire account to the IRS annually. To obtain this valuation, PENSCO’s Operations Team sends letters at the beginning of each year to investment sponsors requesting an updated value for each of their IRA investors.

    Investment sponsors can provide this valuation online using the Asset Valuation Tool or by sending in a year-end statement with valuations to PENSCO. It is a good idea for investors to check with their investment sponsor to see if they have completed the required information and sent a valuation to PENSCO.

The PENSCO Marketplace

  1. What is The PENSCO Marketplace®?

    The PENSCO Marketplace® is a first-of-its-kind network of providers, investment platforms and services for alternative asset investors. Click here to visit The PENSCO Marketplace® to find out how it can help you fulfill your alternative investing needs.

  2. How do I participate in an equity or debt crowdfunding investment with funds from my PENSCO account?

    Every crowdfunding investment platform is different, so please visit the Investment Platforms area of The PENSCO Marketplace® to explore all of your options. You will need to inquire with the investment platform or underlying issuer directly to see if they are willing to take retirement funds. If they do, PENSCO can work with you and the investment sponsor to facilitate an investment using funds from your PENSCO account.

    To learn more about a particular site or crowdfunding opportunity, click on the Investment Platform’s name and you will be directed to their site for more information.

  3. How can I locate financial and real estate professionals who can help me use my PENSCO self-directed IRA to invest in alternative assets?

    The PENSCO Marketplace® has a professional directory that can provide you with a list of professional resources in your area. Click here to find out more.

  4. I own a piece of property in my PENSCO account. How can I find a property manager who can help with rent collection and general maintenance?

    Purchasing and maintaining real estate in an IRA differs from traditional property investments in that maintenance and repairs must be done by a third party.  You may be able to connect with a local attorney or CPA that can refer you to a property manager through our Professional Directory. Or, we suggest you search local business directories or review sites to find a property manager near you.

  5. I purchased a percentage interest in a Deed of Trust with funds from my PENSCO account. How can I find a financial professional who can service the loan?

    You can visit PENSCO’s Professional Directory to find a professional resource in your area.

Financial Professionals and Institutions

  1. I am a capital raiser. How can PENSCO help me and my investors who want to use IRA funds to invest in my offering?

    PENSCO can help your capital raising efforts by streamlining the process for IRA investments in your particular fund or entity. With PENSCO’s Alt-Nav™ technology, you can electronically submit documents for review and invite prospective investors to open PENSCO IRAs electronically to invest in your offering.

    For more information about what PENSCO can offer, click here or call (855) 453-4960 to speak with a Sales Representative.

  2. Can PENSCO’s platform integrate with my Portfolio Management System?

    Currently, PENSCO has integration capabilities with a variety of online Portfolio Management Systems, including Advent, Addepar, DBCams and Schwab PortfolioCenter. To obtain a full list of our integration capabilities, please call us at (855) 453-4960 to speak with one of our Sales Representatives.

  3. Can PENSCO advertise my fund to their clients?

    Unfortunately, PENSCO’s role in this process is solely as a directed custodian. PENSCO does not solicit or endorse investments that are held by any of our account owners.

  4. What is the PENSCO Pro Portal and how can I obtain access?

    The PENSCO Pro Portal is part of the Alt-Nav™ technology that PENSCO has created to help streamline the deal-funding process. This online portal was created for capital raisers and investment sponsors looking for a simple, automated way to submit documents for review and invite prospective investors to open PENSCO accounts in order to invest in your offering.

    This online portal will guide you through the process of submitting your fund or investment opportunity for administrative review so PENSCO can determine if it can be held in a PENSCO self-directed IRA. The Pro Portal allows you to input details about your investment and upload the documents required for PENSCO to review the opportunity. Our Deal Office has extensive knowledge of investment structures and retirement account requirements, and will help guide you through this process.

    Once the deal is accepted, you can use the PENSCO Pro Portal to invite prospective IRA investors to open a PENSCO account in order to invest in your offering.  Additionally, you can upload investor-specific documents or new documents for new investments that you may have.

    To find out more information and get access to the PENSCO Pro Portal, please call (855) 453-4960 and one of our Sales Representatives will help you get started.

  5. What documents does PENSCO need to review an investment opportunity?

    The following checklists outline the documentation needed for some of the most popular types of investments that are held by PENSCO’s self-directed IRA clients:

    * Real estate (PDF)
    * Private equity (PDF)
    * Unsecured note (PDF)
    * Secured note (PDF)
    * Convertible note (PDF)

    Don’t see your investment type or have additional questions? Check out our Pre-Investment Checklists page or give us a call at (855) 453-4960.

  6. When I use PENSCO’s Pro Portal to invite prospective investors to invest in my fund, how do they open an account with PENSCO and invest in my fund?

    Once you send an invite, your prospective investor will receive an email from PENSCO that contains a personalized hyperlink. They can click on the link to be directed to PENSCO’s website, where they can open an IRA. Our online account opening process makes setting up an IRA easy and efficient. 

    If your investors have any problems accessing the new account opening tool or have any questions about the information that PENSCO requires, they are welcome to call our IRA Specialists at (866) 818-4472.

  7. As a capital raiser, do I need to provide valuations to PENSCO for all my IRA investors who hold my investment with PENSCO?

    Yes. The IRS requires that IRA custodians report the value of IRAs to account owners and to the IRS on an annual basis. Given this rule, we require that issuers and asset sponsors provide PENSCO with a valuation for each PENSCO IRA investor at least once per year.

    Whether you are updating the fund's share/unit price or an IRA investor's capital account balance, PENSCO has made it easy to provide this information to us by using our online Asset Valuation Tool.

    PENSCO is also happy to update the value of any client’s investment if you provide us with a statement. Issuers and investment sponsors can send statements to assetmaintenance@pensco.com for processing.

  8. What is The PENSCO Marketplace® and can my firm be listed?

    The PENSCO Marketplace® is a first-of-its-kind network of providers, investment platforms and services designed to help our clients complete their next alternative asset investment. 

    The PENSCO Marketplace® consists of three areas: 

    1. Debt and Equity Crowdfunding Platforms – The online investment platforms featured on the Marketplace provide current and prospective investors with potential investment options across a wide variety of industries. Each of the crowdfunding investment platforms that are part of the Marketplace only solicit accredited investors, and are or use a FINRA-registered broker-dealer.  If you would like to speak with a PENSCO Representative about becoming part of the Marketplace, please call us at 866.818.4472.

    2. Professional Directory – Many investors are looking for professionals to help them with the alternative investment process. The Professional Directory helps self-directed IRA investors locate external professionals, such as attorneys, CPAs or financial planners, who specialize in alternative asset transactions.

    3. Non-Recourse Lenders – In order to use leverage to buy an investment property within your IRA, the IRS stipulates that an investor must use a non-recourse loan. For real estate investors who may need to use such a loan, PENSCO provides a list of non-recourse lenders that have knowledge and expertise in dealing with loans to IRA investors.