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Pennsylvania 529 Investment Plan

Pennsylvania

The Pennsylvania 529 Investment Plan switched to Pennsylvania Treasury Department as program manager in July 2010 but still uses Upromise Investment Advisors, which was acquired by Ascensus College Savings in 2013, as recordkeeper and Vanguard as investment manager. The program features 3 age-based investment options and 10 static investment options, including a socially responsible equity portfolio, using Vanguard-managed portfolios. Accounts can be linked to the Upromise rewards service.

5-Cap Rating

Resident:
Non-Resident:

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
3.59 3.14 3.83 4.00 0.10

General

Program type:

Savings

How to enroll:

Enroll directly with the program.

Initial year of operation:

2002, but substantially changed in November 2006

State agency(ies):

Pennsylvania Treasury Department

Program manager:

Pennsylvania Treasury Department, with Ascensus College Savings as record-keeper and servicing agent, and Vanguard as investment manager.

Program distributor:

Pennsylvania Treasury Department

Manager contract term:

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Eligibility

State residency requirements:

None

Who can be a participant/owner in the program?

Individuals at least 18 years old, UGMA/UTMA custodians, and trusts.

Significant time or age restrictions imposed by the program:

None

Contributions

Maximum contributions:

Accepts contributions until all account balances in Pennsylvania's 529 plans for the same beneficiary reach $452,210.

Minimum contributions:

$25 per transaction, or $15 per transaction via payroll deduction. $25 minimum contribution through Ugift.

Investment Options

Age-based investment options:

The Age-Based Options offer a choice between 3 risk levels (Conservative, Moderate, and Aggressive) each containing 5 portfolios of underlying mutual funds. Contributions are placed into the portfolio corresponding to the beneficiary's age, and later reassigned to more conservative portfolios as the beneficiary approaches college age.

Static investment options:

Select among 6 multi-fund portfolios (Aggressive Growth, Growth, Moderate Growth, Conservative Growth, Income, and Conservative Income) and 4 individual-fund portfolios (Total Stock Market Index, Social Index, Inflation Protected Securities, and Money Market).

Underlying investments:

Vanguard mutual funds

Underlying fund allocations:

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Investment performance link:

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Portfolio Fees & Performance Lookup

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Fees & Expenses

Enrollment or application fee:

None.

Account maintenance fee:

$18 annually, waived for accounts that have elected electronic delivery of all documents.

Program management fees:

0.34%, consisting of 0.07% fee to the Commonwealth and 0.27% combined fee to Upromise and Vanguard

Expenses of the underlying investments:

Ranges from 0.02% - 0.16%

Total asset-based expense ratio:

0.36% - 0.50%

Taxes and other Benefits

Program match on contributions:

None.

State tax deduction or credit for contributions:

Contributions to Pennsylvania AND non-Pennsylvania 529 plans of up to the gift-tax annual exclusion amount ($14,000 in 2014) per beneficiary are deductible in computing Pennsylvania taxable income. Spouses filing jointly must each have at least $14,000 in income to claim the maximum $28,000 per-beneficiary deduction. Rollovers from another 529 plan or from qualified U.S. savings bonds are not eligible for the deduction.

Value of in-state tax benefits:

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State tax recapture provisions:

Nonqualified distributions from any 529 plan are included by Pennsylvania taxpayers in Pennsylvania taxable income to the extent they are not a recovery of nondeductible contributions, following rules set forth in PIT Bulletin 2006-04. Rollovers are not subject to Pennsylvania tax.

State tax treatment of qualified distributions:

Qualified distributions from Pennsylvania and non-Pennsylvania 529 plans are exempt. Accounts in a Pennsylvania 529 plan are also exempt from Pennsylvania inheritance tax.

State tax treatment of rollovers:

Pennsylvania follows federal tax-free treatment.

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

Yes

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?

Yes, with the Upromise rewards service. Plan participants who are Pennsylvania residents are also eligible for "Tuition Rewards" - guaranteed tuition discounts at over 200 colleges participating in the privately-run SAGE Scholars program.

Statutory protection of an account from creditors:

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Distributions & Terminations

To whom are distributions made payable:

The account owner, designated beneficiary, or an eligible educational institution.

Account Changes

Policy regarding participant/owner changes:

Accepts requests to transfer account ownership.

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:

1-800-440-4000

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