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529 PLANS

National College Savings Program

North Carolina

Having removed its state residency requirements in early 2005, this 529 savings program now offers its diverse variety of investment options to anyone. The age-based option offers a choice between Vanguard and Seligman mutual funds, while each of the static options employs its own unique investment strategy. The Protected Stock Fund was the first equity-indexed guaranteed option found in any 529 savings program, but is now closed to new contributions.

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(Non-Resident Rating)

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Obtain this plan's official enrollment materials by completing our form. It's free and we will forward your details to the program manager. Enroll Today!

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.

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Program type:

Savings

How to enroll:

Enroll directly with the program.

Initial year of operation:

2001

State agency(ies):

North Carolina State Education Assistance Authority

Program manager:

College Foundation, Inc.

Program distributor:

College Foundation, Inc.

Manager contract term:

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Eligibility

State residency requirements:

None

Who can be a participant/owner in the program?

Individuals at least 18 years old, emancipated minors, UGMA/UTMA custodians, and legal entities

Significant time or age restrictions imposed by the program:

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Contributions

Maximum contributions:

For 2008, accepts contributions until all account balances in North Carolina's 529 plan for the same beneficiary reach $358,496.

Minimum contributions:

The minimum initial contribution is $25 and the minimum subsequent contribution is $25.

Investment Options

Age-based investment options:

The Seligman CollegeHorizonFunds Strategy consists of 7 portfolios of underlying mutual funds. Contributions are placed into the portfolio corresponding to the number of years to expected enrollment, and later reassigned to more conservative portfolios as the beneficiary approaches college age.

The V Fund Age-Based Option offers a choice among three different risk levels (Aggressive, Moderate, or Conservative), each containing five portfolios of underlying Vanguard mutual funds. Contributions are placed into the portfolio corresponding to the selected risk level and number of years to expected enrollment, and later reassigned to more conservative portfolios until the beneficiary reaches age 19.

Static investment options:

Select among a 100% equity portfolio (The Aggressive Stock Fund), a balanced portfolio (The Balanced Fund), a fixed-income portfolio (The Dependable Income Fund), and eight individual-fund portfolios (The V Fund Individual Investment Options). An equity-indexed investment, the Protected Stock Fund, was closed to new investments on February 27, 2008.

Underlying investments:

The age-based option offers a choice between the Vanguard mutual funds (The V Fund) and J. & W. Seligman & Co. mutual funds. Eight V Fund options are offered as individual options. The Aggressive Stock Fund divides its investment between the Legg Mason Value Trust and a separately-managed account (NCM Capital's Focused Equity Discipline). The Balanced Fund uses Evergreen mutual funds and a portfolio of Treasury Inflation Protection Securities managed by Wachovia Bank. The Dependable Income Fund uses the state treasurer's short-term investment portfolio. The Protected Stock Fund (now closed to new investments) is invested in a funding agreement issued by MetLife that guarantees principal plus the greater of a minimum annualized interest rate or 70% of the five-year price appreciation, excluding dividends, of the S&P 500 Index.

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:

Seligman CollegeHorizonFunds: 0.10%

Other options: Maximum 0.25%

Expenses of the underlying investments:

Seligman CollegeHorizonFunds: Approximately 0.74% to 1.15% (portfolio weighted average)

Aggressive Stock Fund: Approximately 0.65% to 0.70%

Balanced Fund: Approximately 0.40% to 1.06%

NC Treasurer Dependable Income Fund: Less than 0.05%

V Fund Options: Approximately 0.15% to 0.24%

Total asset-based expense ratio:

0.30% - 1.40%

Taxes and other Benefits

Program match on contributions:

None

State tax deduction or credit for contributions:

Contributions to the North Carolina 529 plan of up to $2,500 per year for an individual taxpayer, and $5,000 per year for married taxpayers filing a joint return, are deductible in computing North Carolina taxable income. Beginning in 2012, income limitations are imposed.

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 are included in North Carolina taxable income to the extent of prior North Carolina tax deductions. Nonqualified withdrawals for this purpose do not include withdrawals made as the result of the beneficiary's death or disability.

State tax treatment of qualified distributions:

North Carolina law exempts qualified distributions from North Carolina and non-North Carolina 529 plans via conformity to the federal tax exclusion.

State tax treatment of rollovers:

North Carolina follows federal tax-free treatment 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:

Participant, designated beneficiary, or copayable to the beneficiary and eligible educational institution, as directed by the participant.

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:

1-800-600-3453

Web site:

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