Cambridge Minibonds

3/7/2020

To Cambridge Minibond Holders:

The City has received additional information regarding 2019 income tax forms from Neighborly (e.g. IRS Form 1099-MISC, related to miscellaneous income) which may be helpful to you in answering the following questions.

QUESTION: Can I expect to receive a 1099?

ANSWER: Not all Minibond Holders will receive a 1099. Only Minibond Holders who earned more than $10 in interest in 2019 on their Minibond investment will receive a related income tax form. If an account earned less than $10 in interest, it will not receive a 1099 or other related tax form. Minibond Holders can check their most recent statement to see how much interest they earned in 2019.

QUESTION: Do I need a 1099?

ANSWER: Minibond Holders should consult their accountant or financial advisor. Note that Cambridge Minibonds are exempt from Massachusetts state income tax and federal income tax.

QUESTION: How do I get a duplicate 1099 if my account earned more than $10 in interest in 2019 AND I transferred my Neighborly account to another broker-dealer prior to January 1, 2020?

ANSWER: To request a duplicate 1099, you can call Pershing at (201) 761-5499. You will need to have your account number available. You will hear a long message – when asked, choose Option #4.

QUESTION: How do I get a duplicate 1099 if my account earned more than $10 in interest in 2019 AND I transferred my Neighborly account to another broker-dealer after January 1, 2020?

ANSWER: To request a duplicate 1099, contact your new broker-dealer, who is responsible for providing a duplicate 1099.

QUESTION: What do I do if I haven’t yet transferred my Neighborly account to another broker-dealer?

ANSWER: Neighborly no longer exists and your account is now an “orphaned account” at Pershing. Pershing is not a broker-dealer and provides very limited services to orphaned accounts – Pershing can only transfer or close your account. You will need to choose a new broker-dealer, call Pershing at (201) 761-5499 with your account number available, and request to have your account moved to your new broker-dealer. You can also request a duplicate 1099 using this Pershing telephone number.

QUESTION: Is there someone at City Hall that I can call?

ANSWER: You can call Michele Kincaid, Assistant Finance Director at (617) 349-4216.

IMPORTANT: The City believes that the above information is reliable, however, the City is not able to independently verify such information. Please note that it is not permissible for the City to advise its residents on tax or financial matters related to individuals or individual Minibond Accounts.

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3/2/2020

Update:

To Cambridge Minibond Holders:

The City has received the following information regarding 2019 income tax forms from Neighborly (e.g. IRS Form 1099-MISC, related to miscellaneous income):

You may have received a related email earlier this year from either Neighborly or Pershing that was sent in error. That email may have contained a non-working link.
In January 2020, on Neighborly’s behalf, Pershing mailed paper copies of any tax forms to the address on file to certain MiniBond Account Holders.
PLEASE NOTE: only Minibond Holders who earned more than $10 in 2019 on their Minibond investment receive a related income tax form. If an account earned less than $10, it will not receive a 1099 or other related tax form.
PLEASE NOTE: Cambridge Minibonds are exempt from federal and Massachusetts’s state tax.
If you have any further questions please contact the City of Cambridge Assistant Finance Director, Michele Kincaid at 617-349-4216.

11/18/19

Update:

The City Finance Department will host 2 information sessions for Cambridge Mini-Bond holders on Tuesday, November 26^th and Wednesday, December 4^th. Both sessions will begin at 6pm at the Cambridge Senior Center, 806 Mass. Ave. (across from City Hall).

When establishing a new brokerage account, individuals should bring with them to their new broker a copy of their Neighborly statement, a copy of the Neighborly e-mail notification informing them of the need to establish a new brokerage account and photo identification.

If you have questions in the meantime, please contact Assistant Finance Director Michele Kincaid at 617-349-4216 or mkincaid@cambridgema.gov.

11/12/19

The City of Cambridge was made aware that Neighborly Securities sent the following email message to its account holders on November 12, 2019. The City of Cambridge is actively working to identify additional information to provide to Cambridge Minibond Holders. Updates will be added to this page as it becomes available.

If you have questions in the meantime, please contact Assistant Finance Director Michele Kincaid at 617-349-4216 or mkincaid@cambridgema.gov.

Due to a recent change in circumstances, paperwork has been filed to close Neighborly Securities.

During this transition, your accounts continue to be fully held and custodied at Pershing, LLC ("Pershing"). However, you need to transfer your holdings to an external brokerage by December 27th.

The transfer process is known as an ACAT (Automated Customer Account Transfer). To complete this transfer, you should reach out to the new firm, (many have a specific ACAT department), send them the account information they request, and then they will complete the process on their end.

If you complete this process in 30 calendar days (by December 12th), any ACAT/transfer fees will be waived. If you do not complete the transfer within this timeframe, a $65 transfer fee may apply. If you do not transfer your account to a new brokerage, the account will become "orphaned"—this means Pershing will provide liquidation only services to assist in closing your account, and your account may be subject to additional fees.

If you don’t already have another brokerage account, you can check in with your local bank to see if they support securities holdings.

We’re grateful for your support and hope that you continue to make investments in the places you live and care about.

We are committed to ensuring a seamless transition for our clients and are available to answer any questions you have regarding this process.

Best,

Daniel Kupratis

CEO

For access to your monthly/quarterly statements, you can continue to log in at neighborly.com and sign into your account with your credentials.

For any account or servicing related inquiries, please contact support@neighborly.com and someone will promptly respond back, or you may call 866-432-1170.

Securities offered through Neighborly Securities, Member FINRA, SIPC and registered with MSRB. Always consider your investment objectives before investing. Learn more at https://neighborly.com/terms. You received this email as a registered user of Neighborly. If you'd no longer like to receive emails from us, click here.

2019 Neighborly Corporation

Neighborly FAQs and Helpful Information

How do I contact Neighborly?

Neighborly contact information:

Email support@neighborly.com
Telephone (866) 432-1170

I got an email from Neighborly – what does it mean?

If you received an email from Neighborly, you likely have purchased Cambridge Minibonds with a Neighborly account that you created at the time of purchase. (Residents could purchase Minibonds by either opening a Neighborly account or by using their own non-Neighborly broker-dealer.) Neighborly is going out of business. Neighborly is informing you that you’ll need to transfer your Neighborly account to another broker-dealer by December 12, 2019. The last day to transfer your Neighborly account is December 27, 2019.

Is my money safe?

Yes, your money is safe. There will be no interruption of payments by the City of principal and interest on the Minibonds. These funds are being held in customer accounts by Pershing LLC, a custodian, for the benefit of the Minibond owners. Also, Minibond owner accounts are insured through the Securities Investor Protection Corporation (“SIPC”) for up to $500,000 per account.

Does it cost money to transfer my Neighborly account?

Neighborly tells us that if you transfer by December 12, 2019, there is no charge. After December 12, 2019 a $65.00 fee will be charged (this is an ACA/Transfer fee). The City is trying to have these fees reduced or removed, but please note that there is no guarantee that these charges will be changed.

What if I purchased Cambridge Minibonds with my own brokerage account?

Residents had the option of buying Cambridge Minibonds by either opening a Neighborly account or by using their own non-Neighborly broker-dealer. If you do not have a Neighborly account, then your account is not affected by Neighborly going out of business and you do not need to take any action.

How do I transfer my Minibond account from Neighborly?

Fortunately, we have heard from other Minibond holders that transferring your Minibond account can be done relatively easily. The first step is to identify a new broker-dealer. There are a number of broker-dealers in Cambridge and the bank where you have your checking or savings accounts may be able to provide broker-dealer services or otherwise assist you. We have been told that many broker-dealers charge no fee to set up an account and have no minimum dollar amount for deposit.

Neighborly has informed us that once you set up an account with your new broker-dealer, you should tell your new broker-dealer that you wish to transfer your Neighborly account to your new account. Have your Neighborly monthly statement or Neighborly account number available and bring a photo ID. It may be helpful to bring the Neighborly email notice as well. This transfer process is called ACAT (Automated Customer Account Transfer).

Can the City recommend a broker-dealer?

No, the City is not legally allowed to give any sort of financial advice. There are a number of broker-dealers in Cambridge and the bank where you have your checking or savings account may be able to provide broker-dealer services or otherwise assist you.

I can’t find my statements – what do I do?

For access to your monthly statements, until December 27, 2019, you can continue to login at www.neighborly.com and sign into your account with your credentials. Your monthly statement from Neighborly includes helpful information about your account.

What happens if I don’t transfer my Neighborly account by December 27, 2019?

After December 27, 2019, Neighborly will no longer exist and your account will be held by Pershing LLC, a custodial agent, as an “orphaned” account. This means that the only service Pershing is able to provide is to sell your Minibonds or transfer them to another broker-dealer if you call and instruct them to do so. At this time, it hasn’t been decided what fees, if any, might apply to an orphaned account, and the City is working to have any potential fees reduced or removed for a period after December 27, 2019 (a grace period). Pershing’s telephone number is (201) 413-3333.

Can I sell my Minibonds?

Yes, you can sell your Minibonds before December 27, 2019 by contacting Neighborly and telling them that you want to sell your Minibonds. Neighborly will be able to further assist you with any questions you may have regarding selling and/or pricing your Minibonds. Neighborly can be reached by email at support@neighborly.com or by telephone at (866) 432-1170. After December 27, 2019 you can sell your Minibonds by contacting Pershing at (201) 413-3333.

How long will it take to transfer my Minibonds to another broker-dealer?

Neighborly tells us that the new broker is required to initiate and submit the transfer and that once the transfer is submitted it takes up to 3 business days for the process to be completed.

Is there someone at the City that I can speak with?

Yes, the City will hold two information sessions for Cambridge Minibond holders. The sessions are on Tuesday, November 26 and Wednesday, December 4. Both sessions begin at 6:00 pm at the Cambridge Senior Center, 806 Mass Ave., across from City Hall. You can also call Assistant Finance Director, Michele Kincaid at (617) 349-4216 or email her at mkincaid@cambridgema.gov.

PLEASE NOTE:

Neighborly is not affiliated with the City of Cambridge in any way, other than as the broker-dealer for the sale of Cambridge Minibonds.
The information that we are providing comes from Neighborly or Pershing.
The City wants to be as helpful as possible to its resident Minibond holders, but the City cannot legally recommend any financial institutions or give any financial advice. If you don’t have a financial advisor, the bank where you have your checking or savings accounts may be able to help you. Some banks also have a broker-dealer division.