Exciting Plan Enhancements for the Bright Start Advisor-Sold Plan
Thank you for making the important decision to invest in a student’s future through the Bright Start Advisor-Sold College Savings Plan. Saving for college is an important investment, and I take pride in sharing that responsibility with you.My office is committed to ensuring our Illinois 529 programs are an excellent value for college savers. That’s why I’m excited to announce several new enhancements to the program, effective mid-July:
- Lower Costs. We have worked hard to negotiate lower fees, keeping more money in the accounts of future learners. On average, portfolio expense ratios will decrease 8%.
- Additional Investment Diversity. We will add additional investment choices to the fund lineup, with quality funds from T. Rowe Price, DFA, Dodge & Cox, Northern Funds, and several additional fund families. Additional details and information on the new funds will be shared in the upcoming weeks. The investment portfolios in your account will remain the same.
- A New Program Manager. Through an open and competitive bid process, we selected Union Bank & Trust as our new program manager. For the past 11 years, they’ve served in that role for our Morningstar Silver Rated Bright Directions Advisor-Guided 529 College Savings Plan.
- Transition Details. Please note that your Bright Start investments and account information will automatically and seamlessly transition from OFI Private Investments (Oppenheimer Funds) to Union Bank & Trust, with no action required by you. The change of plan records and conversion will occur over the July 14-17, 2017 weekend.
- Same Great Tax Benefits. The Illinois advisor-sold 529 plans 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 filers1).
There is no action required from you at this time. The phase one changes above will automatically become part of your account in mid-July. We have enclosed a Program Disclosure Statement Supplement for your review and records.
In November 2017, Bright Start will officially merge into Bright Directions. In addition to providing more investment options for you, we will offer more age-based options to you and your financial advisor. In the fall, additional details about this phase of the transition will be sent to you.
But right now, I simply wanted to take this opportunity to announce the program’s upcoming, exciting improvements and thank you for your investment in the future of Illinois.
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.