529 PLANS

TNStars College Savings 529 Program

Tennessee

The TNStars College Savings 529 Program is administered by the Tennessee Treasury Department. It features an age-based option, individual investment options with underlying funds from a range of fund companies including Vanguard, DFA, and Primecap, and an interest bearing account option with First Tennessee Bank.

5-Cap Rating

Resident:
Non-Resident:
?

In Savingforcollege.com's latest quarterly rankings, this plan ranked in the top 10 for 1-year, 3-year, 5-year and/or 10-year performance.

Savingforcollege.com's 5-Cap Ratings provides an evaluation and comparison of 529 plans, utilizing a formula that examines dozens of factors grouped into the following categories. (Scale 0 to 5; 5 is highest)

Performance Costs Features Reliability Resident Upgrade
4.40 4.30 4.20 2.90 0.00

General

Program type:

Savings

How to enroll:

Enroll directly with the program.

Initial year of operation:

2012

State agency(ies):

State of Tennessee Treasury Department and the Baccalaureate Education System Trust Board of Trustees

Program manager:

State of Tennessee Treasury Department

Program distributor:

Not applicable.

Manager contract term:

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Eligibility

State residency requirements:

None

Who can be a participant/owner in the program?

U.S. citizens and legal residents at least 18 years old, UGMA/UTMA custodians, and legal entities.

Significant time or age restrictions imposed by the program:

Any contribution made to an account must be on the account for 21 days before it can be withdrawn.

Contributions

Maximum contributions:

$350,000 including all accounts in the program and any accounts in Tennessee's BEST Prepaid Program held for the same beneficiary

Minimum contributions:

The minimum initial or subsequent contribution to an account for each investment option is $25. Once an initial contribution is made to the account, there are no required subsequent contributions.

Investment Options

Age-based investment options:

An age-based option offers five age bands. Contributions are placed into the portfolio corresponding to the beneficiary's age and automatically shift to a more conservative portfolio over time.

Static investment options:

Select among 14 individual options investing in Vanguard, DFA, or Primecap funds, or an interest bearing account option with First Tennessee Bank National Association.

Underlying investments:

Vanguard and DFA in the age-based option; Vanguard, DFA, and Primecap in the individual options

Underlying fund allocations:

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Portfolio Fees & Performance Lookup

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See Investment Options

Fees & Expenses

Enrollment or application fee:

None

Account maintenance fee:

None

Program management fees:

0.00% - 0.31%

Expenses of the underlying investments:

Ranges from 0.05% to 0.27% in the age-based option; 0.04% to 0.62% in the individual options.

Total asset-based expense ratio:

Capped at 0.35% due to state subsidy, none for the interest bearing account.

Taxes and other Benefits

Program match on contributions:

Under the Tennessee Investments Preparing Scholars Program, eligible families can receive a matching contribution of $100 for a minimum $25 investment, or $500 for a minimum $125 investment. Families can reapply each year, up to a $1,500 maximum benefit per child.

State tax deduction or credit for contributions:

Not applicable. Tennessee does not have a personal income tax.

State tax treatment of qualified distributions:

Not applicable. Tennessee does not have a personal income tax. Contributions to, and distributions from, Tennessee and non-Tennessee 529 plans are specifically exempt from all Tennessee state, county, and municipal taxes.

Does the sponsoring state exclude the value of an account for state financial aid purposes?

No

Does participation in the program provide beneficiaries with any advantages in qualifying for resident tuition status at state institutions?

No

Does the program have a formal agreement with a rewards program or outside scholarship program?

No

Statutory protection of an account from creditors:

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Distributions & Terminations

To whom are distributions made payable:

The purchaser, beneficiary or the institution of higher education. Non-qualified withdrawals that are "refunds" or that are eligible for a waiver of the federal 10 percent penalty tax are payable to the purchaser.

Account Changes

Policy regarding participant/owner changes:

No provision for permitting an account owner change.

Documents, Access & Reporting

Does participant have online password-protected access to account?

Yes

Can the complete enrollment process including funding be done online?

Yes

Documents and other services accessible or downloadable on the program's public Web site:

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Contact

Web site:

Click here to visit

Telephone:

855-386-7827

Twitter

TNStars529

Facebook

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State News

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