What Are 529 College Savings Plans?
529 college savings plans are established by states under Internal Revenue Code (IRC) Section 529(b)(1)(A)(ii) as qualified tuition programs through which individuals may accumulate funds for certain qualified higher education expenses of beneficiaries. Individuals purchase interests in a trust or other financial arrangement established by the state or its instrumentality, with the collective assets invested according to the plan’s stated investment objectives.
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How Can 529 College Savings Plan Disclosures Be Accessed?
The MSRB’s Electronic Municipal Market Access (EMMA®) website provides free access to 529 college savings plan disclosures for states in which the primary distributor is subject to MSRB jurisdiction. However, a limited number of states do not engage municipal securities dealers to serve as primary distributors for some or all of their 529 college savings plans and therefore disclosures for such 529 college savings plans will only be available through EMMA if the issuer has voluntarily submitted the associated disclosure documents.
What Information is Available about 529 College Savings Plans?
For 529 college savings plans where a municipal securities dealer has been engaged as a primary distributor, such municipal securities dealer must receive from the issuer a copy of an official statement (usually referred to as a plan disclosure document, program description or disclosure statement) that includes, among other things, information concerning opening an account, fees and costs, risks, investment performance, plan governance and administration and tax considerations.
How Can Investors Use a 529 College Savings Plan Disclosure?
Plan disclosure documents typically provide key information that may be important to investors in making a decision to invest in the plan and to choose among the available investment options within the plan. This information also is designed to assist investors in understanding how the 529 college savings plan operates. Investors are encouraged to read the plan disclosures carefully before investing and to discuss their possible investment in a 529 College Savings Plan with their financial professional and tax advisor.