529 PLANS

Kentucky Education Savings Plan Trust NEW! PDF ReportPRO

Kentucky

The Kentucky Education Savings Plan Trust is similar to other TIAA-managed 529 savings programs. The Plan features an age-based option, two 100% equity options, a balanced option, a fixed income option, and a guaranteed option.

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
3.43 2.84 3.00 3.50 0.20

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General

Program type:

Savings

How to enroll:

Enroll directly with the program. Enroll Now

Initial year of operation:

1990

State agency(ies):

Kentucky Higher Education Assistance Authority

Program manager:

TIAA-CREF Tuition Financing, Inc.

Program distributor:

TIAA-CREF Individual & Institutional Services, LLC

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 resident aliens at least 18 years old, UGMA/UTMA custodians, and legal entities.

Significant time or age restrictions imposed by the program:

None

Contributions

Maximum contributions:

Accepts contributions until all account balances in Kentucky's 529 plans for the same beneficiary reach $350,000.

Minimum contributions:

$25, or $15 per pay period via payroll deduction.

Investment Options

Age-based investment options:

The Managed Allocation Option contains 9 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 2 100% equity options (one using actively managed funds and the other using mostly index funds), a balanced option, a fixed income option, and the Guaranteed Option.

Underlying investments:

TIAA-CREF institutional mutual funds; the Guaranteed Option is invested in a funding agreement with TIAA-CREF Life Insurance Company that guarantees principal and a minimum 1% annual rate of interest (actual rate is declared annually and as of July 1, 2017 is 1.50% till June 30, 2018).

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:

0.60% manager fee for the Managed Allocation option includes underlying fund expenses; 0.47% manager fee for the Equity Index, Balanced, and Fixed Income options, and 0.41% fee for the Active Equity Option, which do not include underlying fund expenses. No fee for the Guaranteed Option.

Expenses of the underlying investments:

Managed Allocation Option: included in the program management fee.
100% equity options: 0.07% to 0.50%
Balanced Option: 0.26%
Fixed Income Option: 0.16%

Total asset-based expense ratio:

0.54% - 0.91%. None for the Guaranteed Option.

Taxes and other Benefits

Program match on contributions:

None.

State tax deduction or credit for contributions:

None.

State definition of qualified expenses

The state conforms with the federal definition of qualified education expenses, which includes expenses for higher education, as well as up to $10,000 per year in tuition in connection with enrollment or attendance at an elementary or secondary public, private, or religious school.

State tax treatment of qualified distributions:

Qualified distributions from Kentucky and non-Kentucky 529 plans are exempt.

Does the state consider K-12 tuition expenses qualified?

Yes

State tax treatment of rollovers:

Kentucky follows federal tax-free treatment. The intent of the Kentucky statutes that govern the Kentucky Education Savings Plan Trust is to conform with the IRS 529 tax code. The recent federal tax reform law, the “Tax Cuts and Jobs Act” signed into law on December 22, 2017, made changes to the IRS 529 tax code which will require that the Kentucky Higher Education Assistance Authority (KHEAA) change specific statutory provisions to maintain this conformity. Among other changes, the tax reform law expands the use of 529 savings accounts to include tuition costs for K-12 education, up to $10,000/year. This will apply prospectively only for costs incurred in or after 2018. Rules and definitions for this change are still being determined on the federal level. KHEAA’s 529 plan will continue to conform with the IRS tax code, and we will make any needed changes once the specific provisions are determined.

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?

Yes, beneficiaries with eight years of program participation and $2,400 in total contributions who move out-of-state remain eligible for resident tuition rates at Kentucky public institutions

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:

Eligible educational institution or account owner, as directed by the account owner.

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

Website:

visit Enroll Now

Telephone:

1-877-598-7878

State News

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