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CollegeBoundfund (Direct-sold, Alternative RI)

Rhode Island

Alternative RI of the CollegeBoundfund program is the direct-sold version, available only to those who meet certain Rhode Island residency requirements. It features a menu of age-based and static portfolio options utilizing AllianceBernstein mutual funds along with a stable value option and three Vanguard index options. (The program is available nationally through brokers, but at higher cost and without the Vanguard option. Rhode Island residents purchasing through a financial advisor should use Alternative RA or RZ.)

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
2.80 4.57 3.80 4.50 0.60

General

Program type:

Savings

How to enroll:

Enroll directly with the program.

Initial year of operation:

1998

State agency(ies):

Rhode Island Higher Education Assistance Authority

Program manager:

AllianceBernstein L.P.

Program distributor:

AllianceBernstein Investments, Inc.

Manager contract term:

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Eligibility

State residency requirements:

The account owner or beneficiary must be a Rhode Island resident, or the account owner must work in Rhode Island, at the time of program enrollment.

Who can be a participant/owner in the program?

U.S. citizens and resident aliens, 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 Rhode Island's 529 plan for the same beneficiary reach $395,000.

Minimum contributions:

With lump-sum contributions, the minimum initial contribution is $250, and the minimum subsequent contribution is $50. With the automatic investment plan, the contribution level may be any amount.

Investment Options

Age-based investment options:

The Age-Based Portfolios option offers a choice between 3 risk levels: Aggressive, Moderate and Conservative. An additional age-based option, the CBf Morningstar Index option seeks a balance of return potential and risk through investment in passively managed funds. Each contains 7 age bands comprised of 8-13 underlying mutual funds. Contributions are placed into the portfolio corresponding to the selected risk level and the age of the beneficiary. The portfolios shift to a more conservative investment allocation over time.

Static investment options:

Select among 3 multi-fund portfolios (Appreciation, Balanced, and Conservative), a stable value portfolio (Principal-Protection Income Portfolio), and 11 individual-fund portfolios. A dollar-cost averaging option provides for automatic monthly reallocations between any of the portfolios.

Underlying investments:

AllianceBernstein mutual funds along with three Vanguard index 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:

None.

Program management fees:

Included with the expenses of the underlying investments (not disclosed separately by program manager).

Expenses of the underlying investments:

0.16% - 0.20% in the age-based options, ranges from 0.72% to 0.94% in the static multi-fund portfolios (portfolio weighted average), and from 0.04% to 1.03% in the individual-fund portfolios.

Total asset-based expense ratio:

0.04% - 1.03%

Taxes and other Benefits

Program match on contributions:

The CollegeBoundfund Matching Grant Program will match the applicant's contribution to a CollegeBoundfund account up to the first $500 contributed annually, subject to availability of funds. The applicant must meet the income guidelines established for the contribution year and provide verification of the familiy's adjusted gross income for the most recently completed tax year. For each year the individual is eligible, RIHEAA will match up to $500.00 of contributions made to the account for the beneficiary. Those eligible for the $2 for $1 level may receive a maximum annual matching award of $1,000.00. Also, the CollegeBoundbaby program offers a $100 CollegeBoundfund starter account to new babies born or adopted in RI.

State tax deduction or credit for contributions:

Contributions to the Rhode Island 529 plan of up to $500 per year by an individual, and up to $1,000 per year by married taxpayers filing jointly who each make contributions to their own account, are deductible in computing Rhode Island taxable income, with an unlimited carryforward of excess contributions. Only contributions made by the account owner are deductible. Rollovers from another 529 plan are not deductible. Contribution deadline is December 31.

Value of in-state tax benefits:

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State tax recapture provisions:

The principal portion of rollovers and nonqualified withdrawals from this plan within two taxable years of the contribution are included in Rhode Island taxable income to the extent of prior Rhode Island tax deductions.

State tax treatment of qualified distributions:

Qualified distributions from Rhode Island and non-Rhode Island 529 plans are exempt.

State tax treatment of rollovers:

Rhode Island follows federal tax-free treatment except that, in the two taxable years following the year of deduction, 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?

Yes

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?

No

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

Web site:

Click here to visit

Telephone:

1-888-324-5057

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