529 PLANS

Alaska ABLE Plan

Alaska

The Alaska ABLE Plan is offered through the National ABLE Alliance. The plan is established under the Alaska ABLE Savings Program Act and Section 529A to provide financial accounts for individuals with disabilities. The Alaska ABLE Plan is created within the Alaska Department of Revenue, which is the state agency responsible for implementing and administering the Alaska ABLE Plan.

General

Program type:

ABLE Savings plan

How to enroll:

Enroll directly with the program

Initial year of operation:

2016

State agency(ies):

Alaska Department of Revenue

Program manager:

Ascensus

Manager contract term:

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Investment Manager

BlackRock, Sallie Mae Bank, Schwab, Vanguard and Fifth Third Bank.

Eligibility

State residency requirements:

No

Who can be a participant/owner in the program?

An account may be opened by an eligible individual under section 529A or his/her authorized individual with legal guardianship or power of attorney.

Program restrictions:

To be eligible for an ABLE savings plan, an individual must have been diagnosed with a disability before age 26, and be eligible to receive benefits under Supplemental Security Income (SSI) and/or Social Security Disability Insurance (SSDI). Individuals who are not receiving SSI and/or SSDI may still be eligible if they meet the age requirement and have been diagnosed by a licensed physician and received a letter of certification.

Contributions

Maximum contributions:

$400,000

Minimum contributions:

The initial and additional contribution minimum is $25.

Investment Options

Target-Risk Options:

Select among 6 target risk options: Aggressive Option, Moderately Aggressive Option, Growth Option, Moderate Option, Moderately Conservative Option, Conservative Option.

Bank Money Market Investment / Checking Option:

None, but the conservative option allocates 60% to a Sallie Mae Bank High-Yield Savings Acount. An FDIC-insured checking account option is available through Fifth Third Bank.

Fees & Expenses

Enrollment or application fee:

None

Account maintenance fee:

$40, assessed at $10 per calendar quarter. The quarterly fee is discounted by $3.75 for account owners who elect to receive statements via electronic delivery and further discounted by $1.25 per quarter for residents of Alaska. Investors in the checking option are assessed a monthly service charge of $2.00, waived for accounts with an average daily balance of more than $250.

Program management fees:

0.32% for all investment options; none for the checking option.

Expenses of the underlying investments:

Ranges from 0.02% to 0.06%, depending on the investment option chosen

Total asset-based expense ratio:

0.34% - 0.38%, depending on the investment option chosen.

Fees or restrictions on the number of disbursements

None, though the plan reserves the right to establish a minimum withdrawal amount.

Taxes and other Benefits

Program match on contributions:

None

State tax deduction or credit for contributions:

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

State tax recapture provisions:

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

State tax treatment of qualified distributions:

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

State tax treatment of rollovers:

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

Medicaid eligibility

The Centers for Medicare and Medicaid Services have not yet provided detailed guidance on how funds in qualified ABLE accounts will be treated for purposes of determining Medicaid eligibility. Consult with your state's Medicaid office for questions.

Medicaid recapture provisions

Under Section 529A, following the death of the account owner, any state may file a claim against the account owner or the account itself for the amount of the total medical assistance paid for the account owner under the state's Medicaid plan after the establishment of the account (or any ABLE account from which amounts were rolled or transferred to the current account). The amount paid in satisfaction of such a claim is not a taxable withdrawal from the account. Further, the amount is to be paid only after the payment of all outstanding payments due for the qualified disability expenses of the account owner and is to be reduced by the amount of all premiums paid by or on behalf of the account owner to a Medicaid Buy-In program under that state's Medicaid plan. Procedures for filing claims may vary from state to state. Authorized individuals and executors and administrators should consider seeking legal counsel on the applicability of, and any available exceptions to, Medicaid recapture under applicable state law and regulation.

Is there a debit card/ purchasing card available, and if so, at what cost?

Not at this time.

Statutory protection of an account from creditors:

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Distributions & Terminations

To whom are distributions made payable:

Qualified withdrawals will be sent by check or ACH to the account owner at the address on the account or a third party designated by the account owner.

Account Changes

Policy regarding participant/owner changes:

Accepts requests to transfer account ownership provided the appropriate form and any additional requested documentation is submitted to the Plan.

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

Website:

Click here to visit

Telephone:

888-609-8871

Email:

ak.clientservice@savewithable.com

State News

 

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