Some of the benefits that your clients can look forward to in the newly-named CollegeBound 529 include an expanded investment menu managed by Invesco; enhanced service offerings, including new ways to grow college savings by inviting involvement from friends and family; and fees that are on average almost 25% lower than the current plan, without sacrificing investment choice or diversification.
You can expect dedicated support from your Invesco wholesaler as well as a team of specialists, an expert college savings spokesperson, and a robust practice management team. You will also have access to a wealth of printed and digital marketing collateral and tools to support your sales efforts.
The process of transferring account records to the new CollegeBound 529 will begin at the close of business on or about Friday, July 8, 2016 and is anticipated to be completed on or about Monday, July 11, 2016. Beginning 4 p.m. ET on July 7, transactions and maintenance requests will be processed by CollegeBound 529 using market values of the plan's new investment options as of 4 p.m. ET on the later of July 12, 2016 or the business day that the transaction request is received by the plan. Telephone access will be unavailable until Monday, July 11. During this time, account owners will remain invested in the plan.1
To facilitate the transfer, there will be cut-off dates for account function requests as follows:
Thursday, June 30, 2016, 4 p.m. ET: Cut-off time for new enrollments, transfers within CollegeBoundfund, initiation of incoming rollovers, and reallocations. Requests received after that time will not be processed and should be resubmitted using new forms after the transition on Tuesday, July 12, 2016.
Friday, July 1, 2016, 4 p.m. ET: Cut-off time for one-time ACH purchases (online, through gifting or via phone)
Tuesday, July 5, 4 p.m. ET: Cut-off time for transactions initiated electronically by financial institutions (excluding electronic fund transfers). Requests received after that time will not be processed and should be resubmitted after the transition on Tuesday, July 12, 2016.
Thursday, July 7, 2016, 4 p.m. ET: Cut-off time for all other transactions, including Automatic Contribution Plan (ACP) transactions. Transactions received in good order after that time will be processed on the later of Tuesday, July 12, 2016 or the business day it is received by CollegeBound 529.
Monday, July 11 at 8 a.m. ET: Call center servicing resumes with CollegeBound 529.
Tuesday, July 12, 2016: Transactions and other account change requests received in good order after 4 p.m. ET on Thursday, July 7, 2016, will be processed by CollegeBound 529 using Tuesday, July 12, 2016, market values of CollegeBound 529's new investment options. Online account access resumes at collegebound529.com.
No, they will not have to do anything. The transition will occur automatically and your clients' new account(s) will be created based on their existing account information and investment balances as of the close of business on or about Friday, July 8, 2016. Their investments will be moved automatically ("mapped") to the most similar investments in the new CollegeBound 529.
For clients that are contributing to the plan via payroll deduction, there are steps they should take to ensure their contributions continue after the transition. Instructions will be mailed to those clients in late June.
Yes. Please familiarize yourself with the transition newsletter, which will be mailed to you in mid-May and to all your clients in early June. The transition newsletter contains mapping information and key dates of the transition. Your clients may call you with questions regarding their accounts and the transition. Should you have any questions about the transition, contact your Invesco wholesaler directly or call 800 410 4246.
For non-Rhode Island residents, CollegeBound 529 will charge a program fee of 0.15%, administrative fees of 0.02% and an annual account maintenance fee of $20. The annual account maintenance fee is waived if the account balance is equal to or greater than $25,000 or if the account is contributing with an active recurring contribution or payroll direct deposit.2 These fees are in addition to the expense ratios of each investment option and distribution and marketing fees.
If the account owner or beneficiary is a Rhode Island resident, the program fee, administrative fee and annual account maintenance fee are waived.
No, the transition to the new CollegeBound 529 is not a taxable event.
No. Federal law limits exchanges between investment options in 529 plans to twice per calendar year. Because this transition is a program-initiated change, it will not count toward the twice-per-year permitted investment exchanges.
No. Account owners shouldn't be concerned about the transition process. Ascensus College Savings has successfully completed 25 transitions of 529 plans, including 13 from the current program manager's recordkeeping platform. All accounts, both before and after the transition, will balance to the penny.
On or about July 8, 2016, we will access account records and invest account owners' balances in portfolios in the new CollegeBound 529 that are most similar to — but not exactly the same as — their current investments.
Ugift is an easy, free service that enables family and friends to make the meaningful gift of money into your client's CollegeBound 529 account. Saving for college can take a village, and Ugift makes it easy to get help from your client's network of family and friends. Instead of giving toys, clothes or other traditional gifts that a child will outgrow, gift givers get the satisfaction of knowing that their generosity can make a lasting difference. Information about Ugift will be available on the new CollegeBound 529 website.
Upromise is a rewards program that allows your clients to earn cash back on eligible purchases to help pay for college education expenses. Since 2001, Upromise has helped its members earn millions in cash back for college from eligible purchases that you most likely make every day. These earnings can be transferred automatically to your client's CollegeBound 529 account on a periodic basis, subject to a $25 minimum. To learn more, visit upromise.com.2
When you link your Upromise account with your CollegeBound 529 account, your rewards earnings can be transferred automatically on a periodic basis (subject to a $25 minimum transfer amount). To link your accounts, log onto your Upromise account and follow the linking directions.
We will continue to support contributions through employers, and current balances in CollegeBoundfund accounts will move automatically. The employer will continue to remit payroll direct deposit contributions to CollegeBound 529 after the transition. Depending on your corporate client's direct deposit model, their employees will need to either submit a form to their benefits/payroll representative or update their instructions themselves on their self-service benefits portal. All employers will receive communications regarding this change, and employees will receive specific communications, including the appropriate form, closer to transition.
The transition newsletter has additional information and a detailed timeline. More detailed information on CollegeBound 529, including a new enrollment kit and Program Description, will be available at transition on our new website, collegebound529.com.
Yes. Withdrawal requests received between July 7 — 11, 2016, will be processed on Tuesday, July 12, 2016. If you are planning to make a withdrawal on behalf of your client close to or during this time period, you will want to plan accordingly.
When Invesco and Ascensus College Savings receive your clients' account records, their balances will be invested in the portfolio(s) that are most similar to — but not exactly the same as — their current investments. Future contributions will also be directed to these new portfolios based on their standing allocation instructions (if any) or how assets were invested at the time of the transition. Please refer to the transition newsletter to see the new portfolios into which current plan holdings will be invested going forward.
The transition newsletter shows how your clients' existing accounts will map over at transition. In some cases, new contributions will be to a different unit class, and converted assets will roll into that unit class at a future date. For more information about unit classes at transition and beyond, please read the Program Description which will be sent to you shortly after the transition and will be available online at www.collegebound529.com.
Your clients' account assets will be invested in portfolios specifically constructed for CollegeBound 529. Your clients will be able to conduct the majority of their business through our new website, collegebound529.com, including making contributions, exchanges or qualified withdrawals. Your clients will continue to be able to receive account statements and transaction confirmations electronically.
Your clients' ending account balance on the statements they receive from AllianceBernstein L.P. (AB) should match the opening account balance on the statements they receive from the new CollegeBound 529. You will also receive a copy of these statements. After the transition, you or your client can visit the CollegeBound 529 website to review their accounts.
Yes. Please note that all account owners will have to register for online account access following the transition. Re-registering for access, beginning at 8 a.m. ET, on Tuesday, July 12, should take just a few minutes using the easy, onscreen instructions. Your clients will need their zip code, Social Security number, and new or old account numbers.
They will be able to contribute to their accounts in a variety of ways including check, electronic bank transfer, automatic investment, payroll direct deposit (if available through their employer), a rollover or transfer from another 529 plan or from a Coverdell, or through a Upromise rewards account. The minimum initial contribution — and the minimum amount for additional contributions — is $25.
After the transition, new contributions will be automatically allocated among the new investment options on a percentage basis. Here's how it will work:
If the account is actively funded by regularly scheduled electronic transfers from a bank account or by payroll direct deposit through an employer, contributions will be invested on a percentage basis according to the previously selected investments.
If the account is not actively funded by regularly scheduled electronic transfers or payroll deduction, future contributions will be allocated based on the account balances as of July 8, 2016.
For example, if your client currently has $1,000 in the AB Bond Inflation Portfolio and $1,000 in the AB Large Cap Growth Portfolio, after the transition they'll have $1,000 in the Invesco Short Duration Inflation Protected Portfolio and $1,000 in the Invesco Diversified Dividend Portfolio. Because the assets are split evenly between the two portfolios, future contributions would be invested 50% in the Invesco Short Duration Inflation Protected Portfolio and 50% in the Invesco Diversified Dividend Portfolio.
Following the transition, your clients will be able to view their allocations by logging onto their accounts online. You and your clients will also be able to change the way in which future contributions are allocated after the transition.
Through 529quickview.com, you will be able to set up automatic contributions, request distributions, and make transfers online. You will also be able to download statements, confirmations and tax forms, as well as generate reports to generate sales leads.
You will have access to client information that is similar to the information available to account owners through our new website collegebound529.com.
For service-related questions, Client Services Representatives are available at 877 615 4116 from 9 a.m. to 7 p.m. ET.
For sales-related questions, Invesco representatives are available at 800 410 4246 from 8:30 a.m. to 6 p.m. ET.
For contributions posted with a trade date of July 7, 2016 or prior, financial advisors will continue to receive compensation from AB, consistent with the current CollegeBoundfund Program Description. Contributions posted on or after July 12, 2016, will be subject to a new fee and expense schedule as outlined in the new CollegeBound 529 Program Description (post-transition), and compensation will be provided by Invesco (provided a selling agreement with Invesco is on file). The new CollegeBound 529 Program Description will be available on our new website at collegebound529.com when the website launches on July 12, 2016. Additionally, both account owners and financial advisors will receive a printed copy along with the opening statement from the new CollegeBound 529.
1Account owners will bear the risk of any investment loss and/or receive the benefit of any investment gain during this time. We will process all transaction requests received in good order after 4 p.m. ET on Thursday, July 7, using market values of the plan's new investment options as of 4 p.m. ET on the later of July 12, 2016 or the business day that the transaction request is received by us.
2 Upromise rewards is an optional service offered by Upromise, Inc., is separate from CollegeBound 529, and is not affiliated with the State of Rhode Island. Specific terms and conditions apply. Participating companies, contribution levels, terms and conditions subject to change without notice. Transfers from Upromise to a CollegeBound 529 account are subject to a $25 minimum.
Upromise and the Upromise logo are registered service marks of Upromise, Inc. Ugift is a registered service mark of Ascensus Broker Dealer Services, Inc. All other marks are the exclusive property of their respective owners.
Please see the important legal information in the transition newsletter.