|
What is the OklahomaDream 529 Plan? Which state sponsors the OklahomaDream 529 Plan? Who is the Program Manager? Who serves as the Program Administrator and Distributor? How do I open an account? Can I open an account on-line? Can I view my account balance on-line? What is the minimum amount with which I can establish an Account?
Who can be a beneficiary? Can others open an account for the same beneficiary I have designated? Can anyone else contribute to my account? How can I use the money in my account? What if I need the money for something else? What if my child (the Designated Beneficiary) does not go to college, or if the account assets exceed the Beneficiary's college costs? How do I make additional investments? How are my contributions invested? Will there ever be additional Investment Portfolios offered?
Will the percentages of the underlying Funds ever change? Can I change how my account is invested? How often can I change how my account is invested? What Classes are available? What are the fees and expenses?
What are the federal income tax advantages of the program?
What are qualified expenses? Are there any disadvantages of the program regarding federal income tax? What are the gift tax advantages of an account? How much can I invest in an account? Can I use my account to pay for any college?
What is the OklahomaDream 529 Plan?
The OklahomaDream 529 Plan (the "Program") is a college savings and investment program designed to enable individuals to save and invest for qualified higher educational expenses of a child or other beneficiary on a tax-favored basis.
Which state sponsors the OklahomaDream 529 Plan?
The Program has been issued by the State of Oklahoma and established under the laws of the State of Oklahoma.
Who is the Program Manager?
The Program is currently managed by TIAA-CREF Tuitions Financing Inc.
Who serves as the Program Administrator and Distributor?
Allianz Global Investors Distributors LLC, 1345 Avenue of the Americas, New York, NY 10105-4800.
Toll-free phone number: 1-800-628-1237.
Back Office: 1-877-529-9929.
How do I open an account?
You (the "Account Owner") may open an Account by contacting any broker or financial advisor authorized to place orders on your behalf for interests in the Trust (your "Advisor"). The broker dealer is required to have an approved agreement with Allianz Global Investors in order to participate. An Account is established by completing a (Program) Application Form — which is part of the Participation Agreement, and sending it together with a check to the Program's Transfer Agent (BFDS).
Can I open an account on-line?
No.
Can I view my account balance on-line?
Yes, Account Owners and their Advisors can now view current balances, and recent transactions. Visit www.okdream529.com and select the tab for "OklahomaDream 529" to find out more.
What is the minimum amount with which I can establish an Account?
The minimum initial contribution to open an Account is $1,000, with a minimum contribution of $250 per Investment Portfolio.
The minimum applicable if you contribute through an automatic investment plan (A/K/A, "Auto-Invest") is $250 (per portfolio) — with a required minimum monthly contribution of $50. You may terminate your participation in the automatic transfer program only at such time as you have contributed $1,000 in total to the Account.
Who can be a beneficiary?
You may open an Account for the benefit of any person who is a U.S. citizen or legal U.S. resident, with a social security or tax identification number, including yourself. Such person may be your child, your grandchild, your spouse, another relative, or even someone not related to you. The Designated Beneficiary may be of any age. However, the Designated Beneficiary must be an individual person; the Designated Beneficiary cannot be a trust or other entity. (In very limited circumstances, you do not have to name an individual person as the Designated Beneficiary.) The OklahomaDream 529 Plan is intended and designed for residents of the state of Oklahoma.
Can others open an account for the same beneficiary I have designated?
Yes, other people may also open their own Accounts for the same Designated Beneficiary. (Contribution limits may apply per beneficiary. Please see the Plan Disclosure Booklet for more information.)
Can anyone else contribute to my account?
Yes, anyone else may make contributions to your Account(s), although the investment of the contribution will be directed in accordance with your instructions. Another contributor will not retain any control over, or rights to, his or her contribution (or any other portion of the Account) after the contribution is made. The other contributor will not receive any statements or other information with respect to the account.
How can I use the money in my account?
You can use the money in the account when needed to pay for the "qualified higher education expenses," as defined in the Internal Revenue Code of 1986 (A/K/A, "Section 529"), of the person who is the Designated Beneficiary of the account.
What if I need the money for something else?
You can withdraw all or any portion of the money in the account at any time for any purpose, but withdrawals of earnings for purposes other than paying a Designated Beneficiary's qualified higher education expenses generally will be subject to federal income tax and a federal 10% penalty.
What if my child (the Designated Beneficiary) does not go to college, or if the account assets exceed the Beneficiary's college costs?
You can use the funds for the Designated Beneficiary's graduate or professional school expenses, designate a new beneficiary who is a member of the Designated Beneficiary's family or, subject to the imposition of federal income taxes and penalty, close the Account by withdrawing all the funds. You also may leave the Account open — indefinitely — until you determine the proper course of action. Note that the normal 10% federal penalty and tax on the earnings withdrawn and the Obligation to add the deductions taken back into your Oklahoma taxable income is not assessed if you terminate the account because the beneficiary has died or is disabled, or if you withdraw funds not needed for college because the beneficiary has received a scholarship equal to or less than the amounts withdrawn.
How do I make additional investments?
You may send money by check directly to the address listed on the application form, or ask your Advisor to do so, along with instructions on how to invest the contribution. You also may choose to make periodic contributions by automatic transfers from your bank account.
How are my contributions invested?
The Program has established multiple Investment Portfolios, including:
Will there ever be additional Investment Portfolios offered?
Additional Investment Portfolios may be established in the future. At the time you establish an Account, and at any time a subsequent contribution is made to the Account, you may select one or more of the Investment Portfolios and designate what portion of the contribution should be invested in each selected Investment Portfolio.
Will the percentages of the underlying Funds ever change?
The percentage allocations and mutual funds in which the Investment Portfolios are invested (the "Underlying Funds") are subject to change from time to time in accordance with the Investment Policy.
Can I change how my account is invested?
For each contribution that is made to your account, you can elect how such contribution should be allocated among the Investment Portfolios (regardless of how your initial contribution was made).
How often can I change how my account is invested?
You may reallocate the existing assets in your account — to one or more other Investment Portfolios — at least twice during calendar year for 2009. The frequency is subject to change thereafter.
Alternatively, you may reallocate whenever you change the Account's Designated Beneficiary.
What Classes are available?
Account Owners may allocate each contribution to one of several different classes of units in the selected Investment Portfolio, each of which has a different fee structure. The following Classes are available.
-
Class A Units (w/initial sales charge)
-
Class A Units (load waived for fee-based advisors)
-
Class C Units (asset-based sales charge)
What are the fees and expenses?
Account Owners will bear expenses at the Program level and also the expenses of investing in the Underlying Funds. For recent expenses of the Underlying Funds, please refer to the current Plan Disclosure Statement. Account Owners may select from among two available classes of Units, each with a different fee structure. All fees and charges applicable are subject to change from time to time.
Asset-Based Fees. At the Program level, the Account will be subject to an Advisor Program Management Fee and certain other asset-based fees. Such fees paid by the Account are received by the Advisor Program Distributor and Administrator, and there are no additional fees payable to the Board or to the State of Oklahoma. The asset-based fees noted below for each class of Units are accrued daily and paid to the Program Distributor & Administrator monthly. A portion of the Program Management Fee applicable to C share units is paid by the Program Distributor & Administrator to the Program Manager monthly.
| Fee |
A |
C |
| Program Management Fee |
0.50% |
0.50% |
| Servicing and Administrative Fee |
0.25% |
0.25% |
| Distribution Fee |
None |
0.75% |
Account Maintenance Fee. In addition to the Program expenses described above, each Account, unless certain conditions are met, will be subject to a fixed annual Account Maintenance Fee (Low Balance Fee) of $20 for each Account. This fee will be payable in installments of $5 each on the last business day of each calendar quarter and on the date on which an Account is closed. The annual Account Maintenance Fee will be waived if any of the following conditions are met:
- an account maintains a balance in excess of $20,000
- an Account Owner has Accounts for one or more Designated Beneficiaries and the aggregate balance in those Accounts equals or exceeds $50,000 on the assessment date;
- the Account Owner is an employee of Allianz Global Investors of America L.P. or a company affiliated with Allianz Global Investors of America L.P.;
- the Account Owner is a broker who is affiliated with a Selling Institution with whom the Program Manager has a selling agreement; or
- the Account Owner has selected the Auto-Invest option to contribute at least $50 per month automatically to the Account (please see the Account application for details on the Auto-Invest option). Auto-Invest is an option available for investors making systematic deductions from a bank account, and is not available for most payroll deduction contributions. If you have questions about whether Auto-Invest applies to your contributions, please ask your financial advisor for additional details.
Sales Charges. In addition to the asset-based fees and annual Account Maintenance Fee, Account Owners investing in Class A (subject to certain exceptions) will pay an initial sales charge, all or a substantial portion of which will be paid to the Selling Institution through which Account Owner makes the investment. Account Owners with Class C Units and certain Account Owners with Class A Units will pay a deferred sales charge (also called a redemption fee) on all withdrawals made within twelve months of contribution for Class C Units and eighteen months of contribution for certain Account Owners with Class A Units.
| Class A |
| |
Initial Sales Charge (as a % of assets contributed) |
| Amount of
Contribution(s)
|
Equity Fund
Portfolios and Fixed Income Portfolios
|
| $0 - $99,999 |
4.25% |
| $100,000 - $249,999 |
3.50% |
| $250,000 - $499,999 |
2.50% |
| $500,000 - $999,999 |
2.00% |
| $1,000,000+* |
None** |
|
| |
| Class C |
| Amount of Contribution(s) |
Equity Fund Portfolios and Fixed Income Portfolios |
| Maximum of $499,999 |
1.00% for the first 12 months for any amount up to the maximum purchase |
|
What are the federal income tax advantages of the program?
There are two main federal income tax advantages to the Program. First, any earnings on the money you invest in your Account will not be subject to federal income taxes before they are distributed.
Second, there is special federal income tax treatment for money that is used to pay for the Designated Beneficiary's qualified higher education expenses. Any amounts in the Account that are withdrawn to pay for the Designated Beneficiary's qualified higher education expenses will not be subject to federal income tax.
What are qualified expenses?
In general, tuition, room and board, books, equipment and fees necessary to attend an institution of higher education are considered qualified higher education expenses. Qualified higher education expenses also include expenses of a special needs beneficiary that are necessary in connection with his or her enrollment or attendance at an "eligible educational institution" as defined in the Code.
Are there any disadvantages of the program regarding federal income tax?
There is one potential federal income tax disadvantage to the Program. Any earnings on your Account that are subject to federal income tax upon withdrawal (e.g., earnings withdrawn but not used to pay qualified higher education expenses) will be taxed to the Account Owner or Designated Beneficiary as ordinary income, rather than as capital gains, and may be subject to a federal 10% additional tax, if not used to pay for the Designated Beneficiary's qualified higher education expenses or otherwise exempted from such additional tax.
Earnings withdrawn for payment of one Designated Beneficiary's qualified higher education expenses generally are not excludable from gross income to the extent other federal tax credits and incentives are used for the same expenses. You are encouraged to consult your accountant, financial or tax advisor for a better understanding as to how the specific application of these tax rules apply to your particular circumstances.
Oklahoma residents benefit from the following tax deductions:
- Allows up to $10,000 of contributions to be deducted from your Oklahoma taxable income annually ($20,000 for joint filers). The contributor need not be the Account Owner to qualify for the deduction.
- Contributions may be made up to April 15th to earn a deduction for the prior calendar year.
- Amounts contributed and not deducted may be deducted in the succeeding five years. For example, a $120,000 contribution at once entitles the contributor to an annual $20,000 deduction for six years for joint filers.
- Rollovers from other 529 college savings plans qualify for the Oklahoma tax deduction.
What are the gift tax advantages of an account?
Normally, a gift of more than $13,000 to a single person in one year is subject to federal gift tax. With the Program, an individual can potentially contribute up to $65,000 (and married couples can potentially contribute up to a total of $130,000) to an Account for a particular Designated Beneficiary in one year without triggering the tax. To do this the contributor must elect to treat the entire gift as a series of five equal annual gifts. The five-year prorating is elected by filing a gift tax return for the year in which the gift is made. If the Donor dies before the start of the fifth year, a portion of the contribution must be added back to the Donor's estate for tax purposes. You should consult with a tax advisor regarding the gift and estate tax consequences of contributing to (or making any other transaction with respect to) an account.
How much can I invest in an account?
The maximum balance limit in effect is currently $300,000 per beneficiary. (This amount will be adjusted periodically.)
Federal income tax law applicable to the Program requires that the Program prohibit contributions in excess of what is necessary to provide for the qualified higher education expenses of the Designated Beneficiary. An additional contribution may not be made to your Account to the extent that the amount of the contribution, when added to the balance of all accounts for the same Designated Beneficiary under the OklahomaDream Plan or any other 529 plan sponsored by the State of Oklahoma, would exceed the maximum balance limit then in effect.
Can I use my account to pay for any college?
Yes, you can get the full benefits from the Program if your Designated Beneficiary attends any eligible educational institution or accredited institution of higher education that is eligible to participate in certain federal student aid programs.
This might be a college or graduate or professional school, or a post-secondary vocational or trade school, private or public, in your state or out-of-state.
You should be certain that the school is accredited. If you use the money to pay for costs associated with a non-accredited institution, you will not qualify for favorable tax treatment, and the earnings portion of your withdrawal for such purpose will be subject to federal income tax and a federal 10% penalty.
To learn more about eligible and accredited educational institutions, visit www.savingforcollege.com.
|
