In 2016, CollegeBoundfund will transition to a new program manager and investment line-up.
Following best practices for contracting, in July 2015 the State of Rhode Island issued a request for proposals (RFP) for program management services for the State's tuition savings program, CollegeBoundfund.
The current program manager, AllianceBernstein (AB), and several other firms responded to the RFP with proposals to improve and strengthen CollegeBoundfund.
An extensive due diligence process, led by the State of Rhode Island Chief Investment Officer, evaluated and scored proposals with consideration of five key factors:
- Organizational Characteristics
- Program Administration and Recordkeeping Services
- Investment Management
- Marketing and Distribution
In November, the General Treasurer of the State of Rhode Island selected the partnership of Invesco and Ascensus College Savings to replace the current program manager based on the merits of their proposal and their score relative to other proposals received.
The process of transferring account records and assets to the new CollegeBound plans 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 July 8, online account transactions and maintenance requests will be unavailable until Tuesday, July 12, 2016; telephone access will be unavailable until Monday, July 11. During this time, account owners will remain invested in the plan.1
No action on the part of participants and financial advisors in CollegeBoundfund is required at this time.
Invesco is a leading, independent global investment management firm, dedicated to helping investors worldwide achieve their financial objectives. With distinctive investment management capabilities, Invesco provides a wide range of investment strategies and vehicles to its clients around the world. Operating in more than 20 countries, the firm is listed on the New York Stock Exchange under the symbol IVZ. Additional information is available at invesco.com.
Ascensus College Savings is a leading administrator of 529 plans, dedicated to meeting the needs of families saving for college across the country. As of September 30, 2015, Ascensus College Savings provides program management and administration services for 31 plans across 17 states with 3.4 million accounts and over $66 billion in assets under administration. Ascensus, Inc. is the parent company of Ascensus College Savings. For more information, visit ascensus.com or ascensuscollegesavings.com.
The transition of assets to new investments will happen automatically. There is no action necessary for existing CollegeBoundfund participants, and they will not incur any costs as part of the transition.
Both advisors and participants can expect the same levels of service and support throughout and after the transition.
There will be no tax implications with the transition. As a program-initiated change, the transition will not count as one of the twice-per-year permitted investment exchanges.
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.
Participants and advisors should not be concerned about the transition process. Ascensus College Savings has successfully completed twenty-five conversions of 529 plans, including thirteen from the current program's recordkeeping platform. All accounts, both before and after the transition, will balance to the penny.
Detailed information about the transition—including timing, investment line-ups, mapping, and enhancements to CollegeBoundfund—will be communicated to advisors and participants prior to the transition.
On the transition date Ascensus will access participant records and invest participants' account balances in portfolios that are most similar to—but not exactly the same as—their current investments.
No. The State of Rhode Island selected Ascensus College Savings and Invesco to replace the current program manager based on the merits of their proposal and their score relative to other proposals received. In order to improve and strengthen CollegeBoundfund, all account records and assets will be moved to the new program manager, Ascensus College Savings, and the new investment manager, Invesco.
CollegeBoundfund will continue to support contributions through employers, and current balances in CollegeBoundfund accounts will move automatically. More information regarding the continuation of payroll contributions will be available for participants and advisors prior to the transition.
As additional information is available about the transition, updates to participants and advisors will be made through a dedicated section of the CollegeBoundfund website. Additionally, written materials will be mailed to participants and advisors in the coming months.
1 Account owners will bear the risk of any investment loss and/or receive the benefit of any investment gain during this time. All transaction requests received in good order after 4 p.m. ET on Thursday, July 7, will be processed by the new CollegeBound plans 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.