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Pennsylvania 529 Investment Plan

Pennsylvania's 529 Investment Plan is available to residents of any state, and offers 15 Vanguard investment options, including a socially responsible equity portfolio. Pennsylvania residents may enjoy a state tax deduction for contributions to the plan.

Our Ratingx

4 of 5

Fee Scorex

3.5 of 5

Performancex

N/A

  • Program typeSavings
  • Inception2002, but substantially changed in November 2006
  • State agency
    Pennsylvania Treasury Department
  • Tax deduction
    Tax deduction for single filers $15,000/yr
    Tax deduction for joint filers $30,000/yr
  • Program Manager
    Pennsylvania Treasury Department, with Ascensus College Savings as record-keeper and servicing agent, and Vanguard as investment manager.
  • Program distributor
    Pennsylvania Treasury Department
  • Manager contract termUNLOCK PRO

Ratings & Rankings

Our overall rating for PA 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.

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.


2.63of 5

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 at least 18 years old, UGMA/UTMA custodians, and trusts.

Significant time or age restrictions imposed by the program:

None

Contributions

Maximum contributions:

Accepts contributions until all account balances in Pennsylvania's 529 plans for the same beneficiary reach $511,758.

Minimum contributions:

$25 per transaction, or $15 per transaction via payroll deduction. $25 minimum contribution through Ugift.

Investment Options

Age-based investment options:

The Age-Based Options offer a choice between 3 risk levels (Conservative, Moderate, and Aggressive) each containing 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.View more age-based investment options

Static investment options:

Select among 6 multi-fund portfolios (Aggressive Growth, Growth, Moderate Growth, Conservative Growth, Income, and Conservative Income) and 7 individual-fund portfolios.View more static investment options

Underlying investments:

Vanguard mutual fundsView 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:

$10 annually, waived for accounts that have elected electronic delivery of all documents.

Program management fees:

0.205%, consisting of 0.07% fee to the Commonwealth and 0.135% combined fee to Upromise and Vanguard

Expenses of the underlying investments:

Ranges from 0.02% - 0.12%

Total asset-based expense ratio:

0.225% - 0.325%

Taxes and other Benefits

  • Tax deduction for single filers$15,000/yr
  • Tax deduction for joint filers$30,000/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 Pennsylvania AND non-Pennsylvania 529 plans of up to the gift-tax annual exclusion amount ($15,000 in 2018) per beneficiary are deductible in computing Pennsylvania taxable income. Spouses filing jointly must each have at least $15,000 in income to claim the maximum $30,000 per-beneficiary deduction. Rollovers from another 529 plan or from qualified U.S. savings bonds are not eligible for the deduction.

State tax recapture provisions:

Nonqualified distributions from any 529 plan are included by Pennsylvania taxpayers in Pennsylvania taxable income to the extent they are not a recovery of nondeductible contributions, following rules set forth in PIT Bulletin 2006-04. Rollovers are not subject to Pennsylvania tax.

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 Pennsylvania and non-Pennsylvania 529 plans are exempt. Accounts in a Pennsylvania 529 plan are also exempt from Pennsylvania inheritance tax.

State tax treatment of rollovers:

Pennsylvania follows federal tax-free treatment.

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?

Yes, 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.

Plan participants who are Pennsylvania residents are also eligible for "Tuition Rewards" - guaranteed tuition discounts at over 330 colleges participating in the privately-run SAGE Scholars program.

Upromise Helps Families Save for College

Upromise Helps Families Save for College

Statutory protection of an account from creditors:

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Want to Boost your Savings?

You could be saving more with gifts from family and friends. CollegeBacker makes it easy to start a 529 plan, and then invite others to contribute for birthday parties, holidays, or even on a monthly basis.

Start saving with family and friends

Distributions & Terminations

To whom are distributions made payable:

The account owner, designated beneficiary, or an eligible educational institution.

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:

http://www.pa529.com/investment-plan/

Telephone:

1-800-440-4000