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Bright Directions Advisor-Guided 529 College Savings Program logo

Bright Directions Advisor-Guided 529 College Savings Program

The Illinois Bright Directions Advisor-Guided 529 College Savings Program, sold through brokers and fee-based financial advisors, features an extensive multi-manager platform offering a large number of age-based, static multi-fund, and individual-fund options. In November 2017, the Bright Start Advisor-Sold College Savings Program combined with the Illinois Bright Directions Advisor-Guided 529 College Savings Program. Investments in Bright Start Advisor-Sold College Savings Program accounts were automatically transitioned to the corresponding Bright Directions portfolios. To find a financial advisor in your area, use the Directory of Financial Professionals.

Our Ratingx

4.5 of 5

Fee Scorex

4 of 5

Performancex

3.5 of 5

  • Program typeSavings
  • Inception2005
  • State agency
    Illinois State Treasurer
  • Tax deduction
    Tax deduction for single filers $10,000/yr
    Tax deduction for joint filers $20,000/yr
  • Program Manager
    Union Bank & Trust Company of Lincoln, Nebraska
  • Program distributor
    Northern Trust Securities, Inc.
  • Manager contract termUNLOCK PRO

Ratings & Rankings

Our overall rating for IL residents

This is a program that offers outstanding flexibility, attractive investments, and additional economic benefits (such as generous state tax incentives) that for some people, at least, will provide a substantial boost to their savings. There are few, if any, weaknesses noted in the program.

Our overall rating for non-residents

This is an excellent program with many benefits for the participant and positive investment attributes. If it has any significant weaknesses then it also has some particularly good things to recommend it.

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.


3.33of 5
top-ten

Each plan's performance score is developed directly from Savingforcollege.com's Quarterly 529 Performance Rankings. A 529 savings plan must have at least one year of performance history before they will be assigned a 5-cap rating. For those plans that are not part of our quarterly performance rankings, such as plans offering a single set of bank-based investment options, we assign a performance score by evaluating the returns currently available on similar types of investments outside of 529 plans.

Eligibility

State residency requirements:

None

Who can be a participant/owner in the program?

Individuals 18 years of age or older, UGMA/UTMA custodians, a Trust, and certain legal entities.

Significant time or age restrictions imposed by the program:

None.

Contributions

Maximum contributions:

Accepts contributions until all account balances in Illinois' 529 plans for the same beneficiary reach $450,000.

Minimum contributions:

No minimum.

Investment Options

Age-based investment options:

The Age-Based option is offered in 3 different risk levels (Aggressive, Moderate, and Conservative) each containing 9 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.View more age-based investment options

Static investment options:

Select among 7 multi-fund Target portfolios with varying risk tolerances and 32 individual-fund portfolios. Fifteen additional individual portfolios invest in Vanguard ETF funds and are available only to account owners who establish an account through a registered investment advisor or advisor who is not compensated through commissions.View more static investment options

Underlying investments:

T. Rowe Price, DFA, Dodge & Cox, PIMCO, BlackRock, American Century, Baird Funds, MainStay Investments, Delaware Funds, Harbor Funds, Northern Funds, William Blair, Calvert, Templeton, Causeway, Ariel Investments, MFS, Invesco, Oppenheimer Funds, Principal, Sit Mutual Funds and Vanguard (Class F only).View a full list of this plan's investment options

Underlying fund allocations:

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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:

0.18% manager fee (including 0.03% state fee), plus distribution/servicing fees of 0.25% (Classes A and E), plus distribution/servicing fees of 0.50% (Class C), or 0.00% distribution/servicing fee (Class F). 0.15% manager fee (no state or distribution fee) for Invesco Government Agency 529 Portfolio.

Expenses of the underlying investments:

Ranges from 0.31% to 0.43% (portfolio weighted average) in the age-based and static multi-fund portfolios, 0.025% to 1.18% in the individual-fund portfolios

Total asset-based expense ratio:

Class A: 0.32% - 1.61%
Class C: 0.32% - 1.86%
Class E: 0.32% - 1.61%
Class F: 0.205% - 1.36%
Class G: 0.32% - 1.61%
Class H: 0.21% - 1.36%

Broker loads and commissions:

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Breakpoint pricing:

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Taxes and other Benefits

  • Tax deduction for single filers$10,000/yr
  • Tax deduction for joint filers$20,000/yr

Example

Married filing jointly residents contributing $100/month can expect an additional $0 a year in tax savings.

Program match on contributions:

None.

State tax deduction or credit for contributions:

Contributions to an Illinois 529 plan of up to $10,000 per year by an individual, and up to $20,000 per year by a married couple filing jointly, are deductible in computing Illinois taxable income. For a rollover contribution, only the principal portion is eligible for the deduction. Contribution deadline is December 31 postmark. For tax years ending on or between 12/31/09 and 12/31/20, employers may claim a credit against Illinois tax for 25% of matching contributions made to an employee's account in an Illinois 529 plan, with a maximum annual credit of $500 per employee. Unused credits may be carried forward for five years.

State tax recapture provisions:

Effective January 1, 2007, rollovers from this plan to an out-of-state program are included in Illinois taxable income to the extent of prior Illinois deductions. Effective January 1, 2009, nonqualified distributions from this plan are included in Illinois taxable income to the extent of prior Illinois deductions.

State tax treatment of qualified distributions:

Qualified distributions from an Illinois 529 plan are exempt. Qualified distributions from a non-Illinois plan are exempt provided the plan meets certain disclosure requirements.

State tax treatment of rollovers:

Illinois follows federal tax-free treatment except that, beginning in 2007, 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, Bright Directions 529 Rewards Visa with a 1.529% reward on qualifying purchases.

The Upromise Rewards program can be linked to any 529 college savings plan. Upromise Rewards is free to join and offers members cash back for college.

Upromise Helps Families Save for College

Upromise Helps Families Save for College

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?

No

Documents and other services accessible or downloadable on the program's public Web site:

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Contact

Website:

http://www.brightdirections.com

Telephone:

1-866-722-7283

Telephone for broker use:

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