Exciting Plan Enhancements for Bright Start Direct-Sold Investors
Investing in your young student’s future is an important decision and we take pride in sharing that responsibility with you. That’s why I’m proud to announce that our Bright Start Direct-Sold 529 College Savings Plan will undergo some exciting changes this July, offering you even more great ways to plan for your child’s future. Here’s what you can expect from the enhanced plan:
- Lower Costs. We have successfully negotiated lower fees, keeping more money in the accounts of future learners. In addition, we eliminated the $10 annual account fee on index portfolios. These changes will take effect on July 17, 2017.
- Additional Investment Diversity and Choice. Bright Start will be expanding the number of quality fund families we utilize, to include Vanguard, T. Rowe Price, Dodge and Cox, DFA, and others. In addition, more age-based and investment options will be added.
- A New Program Manager. Through a competitive bid process, we selected Union Bank & Trust as our new program manager. For the past 11 years, they’ve served as program manager for our highly regarded advisor-sold program, Bright Directions.
- Transition Details. Your Bright Start Direct account will automatically and seamlessly transition to the new investment portfolios, with no action required on your part.
- Same Great Tax Benefits. Bright Start will still offer all the same great tax benefits you’re used to, including an Illinois tax deduction for contributions (up to $10,000 for individuals and $20,000 for joint filers)1.
- Tax-Free Withdrawals. 529 funds can still be used for tuition and fees, room and board (if enrolled at least ½ time), books, supplies and equipment required for enrollment, computers, and required software. Funds can also be used at one-year, two-year, four-year, public, private, graduate, technical, and vocational schools nationwide, along with select foreign schools2.
- Transition Information. For additional information and assistance with any questions you may have, please visit or call our special transition website and toll-free assistance line.
- Visit BrightStartTransition.com for more information regarding the mid-July changes
- Call the special transition assistance line at 844.473.8558
Please note, our highly-regarded Bright Directions Advisor-Guided 529 College Savings Program will not be subject to these changes.
The Bright Start website — BrightStartSavings.com — and toll-free phone number — 877.432.7444 — will remain the same, for your convenience.
1 An individual who files an individual Illinois state income tax return will be able to deduct up to $10,000 per tax year (up to $20,000 for married taxpayers filing a joint Illinois state income tax return) for their total, combined contributions to the Bright Directions College Savings Program, the Bright Start College Savings Program, and CollegeIllinois! during that tax year. The $10,000 (individual) and $20,000 (joint) limit on deductions will apply to total contributions made without regard to whether the contributions are made to a single account or more than one account. The amount of any deduction previously taken for Illinois income tax purposes is added back to Illinois taxable income in the event an Account Owner takes a Nonqualified Withdrawal from an Account or if such assets are rolled over to a non-Illinois 529 plan. If Illinois tax rates have increased since the original contribution, the additional tax liability may exceed the tax savings from the deduction.
2 Withdrawals used to pay for qualified higher education expenses are free from federal and Illinois state income tax. Qualified higher education expenses include tuition, fees, books, supplies, and equipment required for enrollment or attendance; certain room and board expenses incurred by students who are enrolled at least half-time; the purchase of computer or peripheral equipment, computer software, or Internet access and related services, if used primarily by the beneficiary during any of the years the beneficiary is enrolled at an eligible educational institution; and certain expenses for special needs services needed by a special needs beneficiary.
Important Legal Information