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GIFT College Investing Plan
Arkansas
The team of Upromise Investments and The Vanguard Group took over management of this 529 savings program from Merrill Lynch in February 2005. It now features age-based and static portfolio options utilizing Vanguard mutual funds, and accounts can be linked to the Upromise Rewards Service.
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General
Did you know?
Residents are not limited to investing in their own State's plan. Another state may offer a plan that performs better and has lower fees. If there is no tax break offered for in-state investors... shop around!
Also, the plan chosen does not affect which state the student enrolls in. An investor can live in NY, invest in a plan from NV and send a student to college in FL.
Program type:
Savings
How to enroll:
Enroll directly with the program.
Initial year of operation:
1999, but substantially changed in February 2005
State agency(ies):
The Arkansas 529 Plan Review Committee, composed of the Director of the Department of Higher Education, the Executive Director of the Arkansas Teacher Retirement System, and the Arkansas State Treasurer
Program manager:
Upromise Investments, Inc.
Program distributor:
Upromise Investments, Inc.
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 18 years old or older, 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 Arkansas' 529 plans for the same beneficiary reach $366,000.
Minimum contributions:
With lump-sum contributions, the minimum initial contribution is $25, and the minimum subsequent contribution is $10. With the automatic investment plan, the minimum contribution level is $10 per month or $30 per quarter via bank transfer or $5 per pay period via payroll deduction.
Investment Options
Age-based investment options:
The Age-Based option is offered in three different risk levels (Aggressive, Moderate, and Conservative) each containing four or five portfolios of underlying mutual funds. Contributions are placed into the portfolio corresponding to the risk level selected and the number of years to expected enrollment, and later reassigned to more conservative portfolios as the beneficiary approaches college age.
Static investment options:
Select among five multi-fund portfolios with varying risk tolerances and a money-market portfolio.
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:
$20 annually (waived for Arkansas residents)
Program management fees:
0.75% manager fee; fee includes underlying fund expenses and a 0.125% fee to the state
Expenses of the underlying investments:
Not applicable, included in the program management fee.
Total asset-based expense ratio:
0.75%
Taxes and other Benefits
Program match on contributions:
Beginning in 2008, the program provides matching grants of up to $500 annually to eligible Arkansas families, based on household income level. For adjusted household income of $30,000 or less, the matching rate is $2 for each $1 contributed. For income of $30,001 to $60,000, the matching rate is $1 for each $1 contributed. Applications for matching grants are accepted each year between January 1 and April 30.
State tax deduction or credit for contributions:
Contributions to the Arkansas 529 plan of up to $5,000 ($10,000 for married taxpayers filing jointly) per year are deductible in computing Arkansas taxable income. Contribution deadline is December 31, and state must receive it by a specified date following December 31.
Value of in-state tax benefits:
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State tax recapture provisions:
The principal portion of rollovers and non-qualified withdrawals from this plan are included in Arkansas taxable income to the extent of prior Arkansas tax deductions.
State tax treatment of qualified distributions:
Arkansas law specifically exempts qualified distributions from Arkansas and non-Arkansas 529 plans.
State tax treatment of rollovers:
Arkansas follows federal tax-free treatment for rollovers except that outbound rollovers are subject to the recapture of prior state tax deductions.
Does the sponsoring state exclude the value of an account for state financial aid purposes?
No
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
Statutory protection of an account from creditors:
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Distributions & Terminations
To whom are distributions made payable:
Eligible educational institution, beneficiary, 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
Telephone:
1-800-587-7301
Web site:
Plan News
- Arkansas GIFT 529 reduces expenses (05/24/2009)
State News
- Arkansas to develop a 529 matching contribution program (04/14/2007)
- Arkansas creates deduction for 529 contributions (04/14/2005)
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