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What is the CollegeAccess 529 Plan?
Which state sponsors the CollegeAccess 529 Plan?
Who is the Program Manager (Distributor)?
When did the Program begin operation?
How do I open an account?
Can I open an account on-line?
Can I view my account balance on-line?
What is the minimum amount with which I can establish an Account?
Who can be a beneficiary?
Can I open more than one account?
Can others open an account for the same beneficiary I have designated?
Can anyone else contribute to my account?
How can I use the money in my account?
What if I need the money for something else?
What if my child (the Designated Beneficiary) does not go to college, or if the account assets exceed the Beneficiary's college costs?
How do I make additional investments?
How are my contributions invested?
Will there ever be additional Investment Portfolios offered?
Will the percentages of the underlying Funds ever change?
Can I change how my account is invested?
How often can I change how my account is invested?
What Classes are available?
What are the fees and expenses?
What are the sales charges and commissions?
What fees do I pay as a South Dakota Resident?
Are there any restrictions as a South Dakota Resident?
Are there any other benefits as a South Dakota Resident?
Does the State of South Dakota or the South Dakota Investment Council make any guarantees?
What are the federal income tax advantages of the program?
What are qualified expenses?
Are there any disadvantages of the program regarding federal income tax?
What about state taxes?
What are the gift tax advantages of an account?
How much can I invest in an account?
Can I use my account to pay for any college?
What is the College Access 529 Plan?
The CollegeAccess 529 Plan (the "Program") is a college savings and investment program designed to enable individuals to save and invest for qualified higher educational expenses of a child or other beneficiary on a tax-favored basis.
Which state sponsors the CollegeAccess 529 Plan?
The Program has been established and is maintained by the South
Dakota Investment Council (the "Council"), a state agency established under the laws of the State of
South Dakota.
Who is the Program Manager (Distributor)?
The Program is currently managed by Allianz Global Investors Distributors LLC, 1345 Avenue of the Americas, New York, NY 10105-4800. Toll-free phone:
1-866-529-7462.
When did the Program begin operation?
The Program began investment operations in March 2002.
How do I open an account?
You (the "Account Owner") may open an Account by contacting any broker or financial advisor authorized to place orders on your behalf for interests in the Trust (your "Advisor"). An Account is established by completing a (Program) Application Form — which is part of the Participation Agreement, and sending it together with a check to the Program's Transfer Agent (PFPC).
Can I open an account on-line?
No.
Can I view my account balance on-line?
Yes, Account Owners and their Advisors can now view current balances, and
recent transactions. Click here to find out more.
What is the minimum amount with which I can establish an Account?
The minimum initial contribution to open an Account is $1,000 ($250 for SD residents), with a minimum contribution of $250 per Investment Portfolio.
The minimum applicable if you contribute through an automatic investment plan (A/K/A, "Auto-Invest") is $250 (per portfolio) — with a required minimum monthly contribution of $50. You may terminate your participation in the automatic transfer program only at such time as you have contributed $1,000 in total to the Account.
If you contribute through a payroll deduction plan, there is no initial contribution required. A minimum monthly contribution of $50 is required.
Who can be a beneficiary?
You may open an Account for the benefit of any person who is a U.S. citizen or legal U.S. resident, including yourself. Such person may be your child, your grandchild, your spouse, another relative, or even someone not related to you. The Designated Beneficiary may be of any age. However, the Designated Beneficiary must be an individual person; the Designated Beneficiary cannot be a trust or other entity. (In very limited circumstances, you do not have to name an individual person as the Designated Beneficiary.)
Can I open more than one account?
You may open more than one Account, but, except in limited circumstances you may open only one Account for each Designated Beneficiary.
Can others open an account for the same beneficiary I have designated?
Yes, other people may also open their own Accounts for the same Designated Beneficiary.
Can anyone else contribute to my account?
Yes, anyone else may make contributions to your Account(s), although the investment of the contribution will be directed in accordance with your instructions. Another contributor will not retain any control over, or rights to, his or her contribution (or any other portion of the Account) after the contribution is made. The other contributor will not receive any statements or other information with respect to the account.
How can I use the money in my account?
You can use the money in the account when needed to pay for the "qualified higher education expenses," as defined in the Internal Revenue Code of 1986 (A/K/A, "Section 529"), of the person who is the Designated Beneficiary of the account.
What if I need the money for something else?
You can withdraw all or any portion of the money in the account at any time for any purpose, but withdrawals of earnings for purposes other than paying a Designated Beneficiary's qualified higher education expenses generally will be subject to federal income tax and a federal 10% penalty.
What if my child (the Designated Beneficiary) does not go to college, or if the account assets exceed the Beneficiary's college costs?
You can use the funds for the Designated Beneficiary's graduate or professional school expenses, designate a new beneficiary who is a member of the Designated Beneficiary's family or, subject to the imposition of federal income taxes and penalty, close the Account by withdrawing all the funds. You also may leave the Account open — indefinitely — until you determine the proper course of action.
How do I make additional investments?
You may send money by check directly to the address listed on the application form, or ask your Advisor to do so, along with instructions on how to invest the contribution. You also may choose to make periodic contributions by automatic transfers from your bank account (via ACH), or through payroll deduction if offered by your employer.
How are my contributions invested?
The Program has established multiple Investment Portfolios, including:
-
(5) Age-Based Investment Portfolios
-
(3) Customized Investment Portfolios*
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(14) Select (individual) Fund Investment Portfolios.*
Will there ever be additional Investment Portfolios offered?
Additional Investment Portfolios may be established in the future. At the time you establish an Account, and at any time a subsequent contribution is made to the Account, you may select one or more of the Investment Portfolios and designate what portion of the contribution should be invested in each selected Investment Portfolio.
Will the percentages of the underlying Funds ever change?
The percentage allocations and mutual funds in which the Investment Portfolios are invested (the "Underlying Funds") are subject to change from time to time in accordance with the Investment Policy.
Can I change how my account is invested?
For each contribution that is made to your account, you can elect how such contribution should be allocated among the Investment Portfolios (regardless of how your initial contribution was made).
How often can I change how my account is invested?
You may reallocate the existing assets in your account — to one or more other Investment Portfolios — only once every calendar year.
Alternatively, you may reallocate whenever you change the Account's Designated Beneficiary.
What Classes are available?
Account Owners may allocate each contribution to one of several different classes of units in the selected Investment Portfolio, each of which has a different fee structure. The following Classes are available.
For Residents Outside South Dakota:
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Class A Units (w/initial sales charge)
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Class A Units (load waived for fee-based advisors or Company-sponsored Plans)
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Class B Units2 (contingent deferred sales charge)
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Class C Units3 (asset-based sales charge)
For South Dakota Residents:
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Class SD-A Units1 (w/initial sales charge)
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Class SD-A Units1 (load waived for fee-based advisors or Payroll Deduction Plans)
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Class SD-C Units1 (asset-based sales charge)
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Class SD-D1 (no sales charge).
What are the fees and expenses?
Account Owners will bear expenses at the Program level and also the expenses of investing in the Underlying Funds. For recent expenses of the Underlying Funds, please refer to the current Plan Disclosure Statement. Account Owners may select from among several available classes of Units, each with a different fee structure. All fees and charges applicable are subject to change from time to time.
Asset-Based Fees. At the Program level, the Account may be subject to a Program Management Fee and certain other asset-based fees. Such fees paid by the Account are received by the Program Manager, and there are no additional fees payable to the Council or to the State of South Dakota. The asset-based fees noted below for each class of Units are accrued daily and paid to the Program Manager monthly.
| |
Unit Class |
| Fee |
A |
SD-A* |
B |
C |
SD-C** |
SD-D** |
| Program Management Fee |
0.35% |
None |
0.35% |
0.35% |
None |
None |
| Servicing and Administrative Fee |
0.35% |
0.35% |
0.35% |
0.35% |
0.35% |
None |
| Distribution Fee |
None |
None |
0.75% |
0.75% |
0.65% |
None |
Account Maintenance Fee. In addition to the Program expenses described above, each Account, unless certain conditions are met, will be subject to a fixed annual Account Maintenance Fee of $16 for each Investment Portfolio in which an Account is invested. This fee will be payable in installments of $4 each on the last business day of each calendar quarter and on the date on which an Account is closed.
The annual Account Maintenance Fee will be waived if any of the following conditions are met:
- the Investment Portfolio in which an Account is invested has a balance equal to or exceeding $2,500 on the assessment date;
- an Account Owner has Accounts for one or more Designated Beneficiaries and the aggregate balance in those Accounts equals or exceeds $50,000 on the assessment date;
- the Account Owner or Designated Beneficiary is a resident of the State of South Dakota;
- the Account Owner is an employee of Allianz Global Investors of America L.P. or a company affiliated with Allianz Global Investors of America L.P.;
- the Account Owner is a broker who is affiliated with a Selling Institution with whom the Program Manager has a selling agreement; or
- the Account Owner has selected the Auto-Invest option to contribute at least $50 per month automatically to the Account (please see the Account application for details on the Auto-Invest option). Auto-Invest is an option available for investors making systematic deductions from a bank account, and is not available for most payroll deduction contributions. If you have questions about whether Auto-Invest applies to your contributions, please ask your financial advisor for additional details.
Sales Charges. In addition to the asset-based fees and annual Account Maintenance Fee, Account Owners investing in Class A (subject to certain exceptions) will pay an initial sales charge, all or a substantial portion of which will be paid to the Selling Institution through which Account Owner makes the investment. Account Owners investing in Class B Units will pay a declining deferred sales charge on all withdrawals made within a prescribed period (see table below). Account Owners with Class C Units and certain Account Owners with Class A Units will pay a deferred sales charge (also called a redemption fee) on
all withdrawals made within eighteen months of contribution.
| Class A (& SD-A) |
| |
Initial Sales Charge (as a % of assets contributed) |
| Amount of
Contribution(s)
|
Equity Fund
Portfolios*
|
| $0 - $49,999 |
5.50% |
| $50,000 - $99,999 |
4.50% |
| $100,000 - $249,999 |
3.50% |
| $250,000 - $499,999 |
2.50% |
| $500,000 - $999,999 |
2.00% |
| $1,000,000 + |
None |
|
| |
| Amount of
Contribution(s) |
Fixed Income Fund
Portfolios**
|
Money Market Plus
Portfolio
|
| $0 - $99,999 |
3.75% |
None |
| $100,000 - $249,999 |
3.25% |
None |
| $250,000 - $499,999 |
2.25% |
None |
| $500,000 - $999,999 |
0.75% |
None |
| $1,000,000 + |
None |
None |
|
| Class B*** |
| |
Deferred Sales Charge (as a % of assets contributed) |
| |
Equity Fund
Portfolios*
|
Fixed Income Fund Portfolios**
|
| Year 1 |
5.00% |
3.50% |
| Year 2 |
4.00% |
2.75% |
| Year 3 |
3.00% |
2.00% |
| Year 4 |
3.00% |
1.25% |
| Year 5 |
2.00% |
0.50% |
| Year 6 |
1.00% |
None |
| Year 7 (& thereafter) |
None |
None |
| Conversion to Class A Units
|
After 8th year |
After 5th year |
| Class C (& SD-C) |
| |
Deferred Sales Charge (as a % of assets contributed) |
| |
Equity Fund
Portfolios*
|
Fixed Income Fund Portfolios**
|
Money Market Plus Portfolio
|
| First 18 Months |
1.00% |
1.00% |
1.00% |
| Class SD-D**** |
| |
Sales Charge (as a % of assets contributed) |
| |
Equity Fund
Portfolios
|
Fixed Income Fund Portfolios
|
Money Market Plus Portfolio
|
| |
None |
None |
N/A |
What fees do I pay as a South Dakota Resident?
Certain fees and expenses of the CollegeAccess 529 Plan differ for Account Owners who are South Dakota residents, or who have designated a South Dakota resident as the Beneficiary.
There is no Program Management fee, nor does the Annual Maintenance Fee apply to South Dakota residents.
Are there any restrictions as a South Dakota Resident?
Account Owners who are South Dakota residents or who have designated a South Dakota resident as the Beneficiary are not eligible to purchase Class B Units.
Are there any other benefits as a South Dakota Resident?
Account Owners who are South Dakota residents or who have designated a South Dakota resident as the Beneficiary may establish an account without using the services of an Advisor, without paying a sales charge.
Does the State of South Dakota or the South Dakota Investment Council make any guarantees?
Neither the State of South Dakota nor the SDIC makes any guarantees of any type in connection with the Program and neither the principal deposited nor any investment return is guaranteed or insured by the United States, the State of South Dakota, any other state, any agency or instrumentality of any of the foregoing, the Council, the Program Manager or the members, officers or employees of any such entity, any Advisor or any other consultant or advisor retained by the Trust.
The State of South Dakota's full faith and credit do not back any of the investments in your account, nor do the Council's general assets or revenues. Neither the State of South Dakota nor the Council promises that your account will increase in value or achieve any rate of return, or that your account will not decrease in value, or that the amount in your Account will be sufficient to pay the qualified higher education expenses of your Designated Beneficiary.
Neither the State of South Dakota nor the Council guarantees that your Designated Beneficiary will be accepted at any institution of higher learning, or that, if your Designated Beneficiary is accepted, he or she will be able to attend, that he or she will graduate, or that he or she will be considered a resident of any particular state for tuition purposes.
What are the federal income tax advantages of the program?
There are two main federal income tax advantages to the Program.
First, any earnings on the money you invest in your Account will not be subject to federal income taxes before they are distributed.
Second, there is special federal income tax treatment for money that is used to pay for the Designated Beneficiary's qualified higher education expenses. Any amounts in the Account that are withdrawn to pay for the Designated Beneficiary's qualified higher education expenses will not be subject to federal income tax.
What are qualified expenses?
In general, tuition, room and board, books, equipment and fees necessary to attend an institution of higher education are considered qualified higher education expenses. Qualified higher education expenses also include expenses of a special needs beneficiary that are necessary in connection with his or her enrollment or attendance at an "eligible educational institution" as defined in the Code.
Are there any disadvantages of the program regarding federal income tax?
There is one potential federal income tax disadvantage to the Program. Any earnings on your Account that are subject to federal income tax upon withdrawal (e.g., earnings withdrawn but not used to pay qualified higher education expenses) will be taxed to the Account Owner or Designated Beneficiary as ordinary income, rather than as capital gains, and may be subject to a federal 10% additional tax, if not used to pay for the Designated Beneficiary's qualified higher education expenses or otherwise exempted from such additional tax.
Earnings withdrawn for payment of one Designated Beneficiary's qualified higher education expenses generally are not excludable from gross income to the extent other federal tax credits and incentives are used for the same expenses. You are encouraged to consult your accountant, financial or tax advisor for a better understanding as to how the specific application of these tax rules apply to your particular circumstances.
What about state taxes?
State tax treatment of the Program may differ from the federal tax treatment based on the state or states in which you pay income taxes. Nearly every state offers its own 529 savings program, some of which offer state tax benefits for their residents participating in their own respective programs, such as allowing contributions to be deducted from income. You are encouraged to become familiar with the program offered by your state. You should consult with your accountant, financial or tax adviser about state or local taxes.
What are the gift tax advantages of an account?
Normally, a gift of more than $12,000 to a single person in one year is subject to federal gift tax. With the Program, an individual can potentially contribute up to $60,000 (and married couples can potentially contribute up to a total of $120,000) to an Account for a particular Designated Beneficiary in one year without triggering the tax. To do this the contributor must elect to treat the entire gift as a series of five equal annual gifts. The five-year prorating is elected by filing a gift tax return for the year in which the gift is made. If the Donor dies before the start of the fifth year, a portion of the contribution must be added back to the Donoržs estate for tax purposes. You should consult with a tax advisor regarding the gift and estate tax consequences of contributing to (or making any other transaction with respect to) an account.
How much can I invest in an account?
The maximum balance limit in effect is currently $350,000. (This amount will be adjusted periodically.)
Federal income tax law applicable to the Program requires that the Program prohibit contributions in excess of what is necessary to provide for the qualified higher education expenses of the Designated Beneficiary. An additional contribution may not be made to your Account to the extent that the amount of the contribution, when added to the balance of all accounts for the same Designated Beneficiary under the CollegeAccess Plan or any other 529 plan sponsored by the State of South Dakota, would exceed the maximum balance limit then in effect.
Can I use my account to pay for any college?
Yes, you can get the full benefits from the Program if your Designated Beneficiary attends any eligible educational institution or accredited institution of higher education that is eligible to participate in certain federal student aid programs.
This might be a college or graduate or professional school, or a post-secondary vocational or trade school, private or public, in your state or out-of-state.
You should be certain that the school is accredited. If you use the money to pay for costs associated with a non-accredited institution, you will not qualify for favorable tax treatment, and the earnings portion of your withdrawal for such purpose will be subject to federal income tax and a federal 10% penalty.
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