529 PLANS

Vermont ABLE

Vermont

Through the Vermont ABLE program, the Vermont Treasurer's Office is offering STABLE Accounts to Vermonters with disabilities. STABLE Accounts allow individuals with disabilities to save and invest money without losing eligibility for certain public benefits programs, like Medicaid, SSI, or SSDI. Earnings in your STABLE Account are not subject to federal income tax, so long as you spend them on qualified disability expenses.

General

Program type:

ABLE Savings Plan

How to enroll:

Enroll directly with the program

Initial year of operation:

2017

State agency(ies):

Vermont State Treasurer

Program manager:

Intuition ABLE Solutions

Manager contract term:

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Investment Manager

Marquette Associates is the Investment Advisor, and The Vanguard Group and Fifth Third Bank are the providers of the investment options.

Eligibility

State residency requirements:

Yes

Who can be a participant/owner in the program?

An account may be opened by a qualfied beneficiary under section 529A or by an authorized legal representative on his/her behalf.

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 plan's annual contribution limit is currently $14,000 per year per beneficiary from all sources. There is also a lifetime account limit of $352,800, at which point no new contributions may be made.

Minimum contributions:

The minimum initial contribution amount is $50.00 per STABLE Account. The minimum subsequent contribution amount is $1.00 per STABLE Account.

Investment Options

Target-Risk Options:

Select among four Investment Options: Income, Conservative Growth, Moderate Growth, Growth.

Bank Money Market Investment Option:

The BankSafe Option offers FDIC insurance protection for amounts invested in the option, up to FDIC-permitted limits. The option allocates 100% of its assets to Fifth Third Bank's BankSafe Product.

Fees & Expenses

Enrollment or application fee:

There is no application fee for online enrollments, but a fee of $50 will be assessed to all paper applications

Account maintenance fee:

$5 monthly

Program management fees:

State administrative fee of 0.19%

Expenses of the underlying investments:

Ranges from 0.12% to 0.15%, none for the BankSafe option

Total asset-based expense ratio:

0.19% - 0.34%, depending on the selected investment option

Fees or restrictions on the number of disbursements

None

Taxes and other Benefits

Program match on contributions:

None

State tax deduction or credit for contributions:

None

State tax recapture provisions:

None

State tax treatment of qualified distributions:

The State of Vermont does not tax distributions for qualified disability expenses.

State tax treatment of rollovers:

Vermont follows federal tax-free treatment.

Medicaid eligibility

Under the ABLE Act, funds in a STABLE Account should be disregarded (i.e., treated as an excluded resource) for purposes of determining eligibility for Medicaid benefits. Additionally, suspension of SSI benefits due to a STABLE Account balance of over $100,000 (see above) will have no effect on Medicaid eligibility.

Medicaid recapture provisions

Under Section 529A, following the death of the beneficiary, any state may file a claim against the beneficiary or the STABLE Account itself for the amount of the total medical assistance paid for the beneficiary under the state's Medicaid plan after the establishment of the STABLE Account (or any ABLE account from which amounts were rolled or transferred to the current STABLE Account). The amount paid in satisfaction of such a claim is not a taxable distribution from the STABLE Account.

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

Beneficiaries can transfer funds from a STABLE Account onto a STABLE Card and use the card to pay for qualified disability expenses.

Statutory protection of an account from creditors:

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Distributions & Terminations

To whom are distributions made payable:

Only the beneficiary, or, if one has been named, the authorized legal representative may direct withdrawals from a STABLE Account.

Account Changes

Policy regarding participant/owner changes:

A change in the beneficiary of a STABLE Account is not treated as a distribution and is not subject to federal gift or GST taxes if the new beneficiary is an eligible individual and a sibling of the current beneficiary. However, if the new beneficiary is not a sibling of the current beneficiary, the change is treated as a non-qualified withdrawal by the current beneficiary and may have federal gift tax or GST tax consequences.

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:

1-800-439-1653

Email:

team@stableaccount.com

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