529 PLANS

IAble Plan

Iowa

IABLE is offered through the National ABLE Alliance. The program is sponsored and administered by Michael L. Fitzgerald, Treasurer of the State of Iowa. IAble is part of the Iowa Able Savings Plan Trust, which was created under the state legislation in 2015. IAble, established as an investing vehicle to encourage and make possible savings to secure funding for disability-related expenses on behalf of individuals with disabilities, is designed to qualify for treatment as a qualified ABLE program under Section 529A and any regulations and other guidance issued thereunder.

General

Program type:

ABLE Savings plan

How to enroll:

Enroll directly with the program.

Initial year of operation:

2017

State agency(ies):

Treasurer of State of Iowa as Trustee of the Iowa ABLE Savings Plan Trust

Program manager:

Ascensus

Manager contract term:

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Investment Manager

Underlying mutual funds and ETFs managed by BlackRock, Schwab, and Vanguard. Sallie Mae Bank provides the high yield savings account.

Eligibility

State residency requirements:

No

Who can be a participant/owner in the program?

An account owner must be an eligible individual under Section 529A as well as a U.S. Citizen or resident alien with a SSI/TIN number and valid permanent U.S. street address.

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:

The member plan's annual contribution limit is currently $14,000 per account owner from all sources. No additional contributions may be made for the benefit of an account owner when the fair market value of the account exceeds the account balance limit of $420,000. Accounts that have reached the account balance limit may continue to accrue earnings, although future contributions may not be made to such accounts. If however, the market value of such account falls below the account balance limit due to market fluctuations and not as a result of withdrawals from such account(s), additional contributions will be accepted.

Minimum contributions:

The initial and additional contribution minimum is $25.

Investment Options

Target-Risk Options:

Select among 6 portfolio options: Aggressive Option, Moderately Aggressive Option, Growth Option, Moderate Option, Moderately Conservative Option, or Conservative Option.

Bank Money Market Investment Option:

None, but the conservative option allocates 60% to a Sallie Mae Bank High-Yield Savings Acount

Fees & Expenses

Enrollment or application fee:

None

Account maintenance fee:

$5 monthly, discounted by $3.75 if the owner elects to receive electronic statements and confirmations

Program management fees:

0.32% for all investment options

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, but a $25 fee applies to all outgoing wires and priority delivery service

Taxes and other Benefits

Program match on contributions:

None

State tax deduction or credit for contributions:

Iowa individual taxpayers who make a contribution can deduct up to $3,239 for 2017 (adjusted annually for inflation) of their contributions including rollovers from a Non-Iowa 529A plan, in determining their adjusted gross income for Iowa income tax purposes.

State tax recapture provisions:

None

State tax treatment of qualified distributions:

Any earnings on contributions are not subject to Iowa state income tax, which means account assets grow free of current Iowa income tax and are tax-free if withdrawn.

State tax treatment of rollovers:

Iowa follows federal tax-free treatment of rollovers, though tax-free rollovers are restricted to once per 12-month period.

Medicaid eligibility

The Centers for Medicare & Medicaid Services have not yet provided detailed guidance on how funds in qualified ABLE accounts will be treated for purposes of determining Medicaid eligibility.

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.

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

Yes, the IAble Plan offer a checking option with a debit card tied directly to a Fifth Third checking account.

Statutory protection of an account from creditors:

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Distributions & Terminations

To whom are distributions made payable:

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

Email:

ia.clientservice@savewithable.com

State News

 

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