Fees and Expenses
The following table describes the fees and expenses that you pay if you open and contribute to a particular Investment Option in the Path2College 529 Plan. These fees are indirectly paid out of the assets of your account. Except for the fees listed below, there are currently no other fees, charges or penalties imposed by or payable to the Plan in connection with opening or maintaining an account. The Board reserves the right to change the current fees, or to impose new or additional fees, expenses, charges or penalties in the future.
| Annual Asset-Based Fees | ||||||
|---|---|---|---|---|---|---|
| Investment Option | Estimated Underlying Mutual Fund Expenses(1) | Plan Manager Fee(2)(3) | Administrative Fee(4) | Misc. Fees | Total Annual Asset-Based Fees(5) | Additional Investor Expense |
| Managed Allocation Option | ||||||
| Age Band 0-3 Years | 0.14% | 0.15% | 0.06% | None | 0.35% | None |
| Age Band 4-7 Years | 0.14% | 0.15% | 0.06% | None | 0.35% | None |
| Age Band 8-11 Years | 0.15% | 0.15% | 0.06% | None | 0.36% | None |
| Age Band 12-14 Years | 0.15% | 0.15% | 0.06% | None | 0.36% | None |
| Age Band 15-17 Years | 0.17% | 0.15% | 0.06% | None | 0.38% | None |
| Age Band 18 and Over | 0.18% | 0.15% | 0.06% | None | 0.39% | None |
| Aggressive Managed Allocation Option | ||||||
| Age Band 0-3 Years | 0.12% | 0.15% | 0.06% | None | 0.33% | None |
| Age Band 4-7 Years | 0.13% | 0.15% | 0.06% | None | 0.34% | None |
| Age Band 8-11 Years | 0.14% | 0.15% | 0.06% | None | 0.35% | None |
| Age Band 12-14 Years | 0.14% | 0.15% | 0.06% | None | 0.35% | None |
| Age Band 15-17 Years | 0.15% | 0.15% | 0.06% | None | 0.36% | None |
| Age Band 18 and Over | 0.17% | 0.15% | 0.06% | None | 0.38% | None |
| 100% Equity Option | ||||||
| 0.08% | 0.15% | 0.06% | None | 0.29% | None | |
| Balanced Fund Option | ||||||
| 0.16% | 0.15% | 0.06% | None | 0.37% | None | |
| 100% Fixed-Income Option | ||||||
| 0.19% | 0.15% | 0.06% | None | 0.40% | None | |
| Money Market Option(6) | ||||||
| 0.15% | 0.15% | 0.06% | None | 0.36% | None | |
| Guaranteed Option(7) | ||||||
| None | None(7) | None | None | None | None | |
(1) For each Investment Option that invests in multiple underlying Mutual Funds, the figures in this column are based on a weighted average of the expenses of each underlying Mutual Fund’s expense ratio as reported in the applicable Mutual Funds’ most recent prospectus available prior to the date of this Disclosure Booklet, in accordance with the Investment Option’s asset allocation among its underlying Mutual Funds. For each Investment Option that invests in a single Mutual Fund, the figures in the column represent the underlying Mutual Fund’s expense ratio as reported in the Mutual Fund’s most recent prospectus available prior to the date of this Disclosure Booklet. Each Investment Option (other than the Guaranteed Option) indirectly bears its pro rata portion of the underlying Mutual Funds’ expenses because when fees are deducted from an underlying Mutual Fund’s assets, the value of the underlying Mutual Fund’s shares is reduced.
(2) The Plan Manager Fee and the Administrative Fee are the only fees deducted from Plan assets. The Plan Manager Fee and the Administrative Fee may change at any time. Although there are no fees that are deducted from your Savings Trust Account, when you invest in the Plan, you indirectly bear a pro rata portion of the Plan expenses because when fees are deducted from Plan assets the value of the Units is reduced.
(3) For its services as Plan Manager, each Investment Option (with the exception of the Guaranteed Option) pays TFI a Plan Manager Fee equal to the stated percentage of the average daily net assets held by that Investment Option. The Plan Manager Fee indicated applies on total assets in the Plan up to $1.5 billion. The Plan Manager Fee will be reduced to 0.12% when total assets in the Plan are $1.5 billion to $2.0 billion for a period of at least 90 consecutive days, and will be further reduced to 0.10% when total assets in the Plan reach $2.0 billion to $3.0 billion for a period of at least 90 consecutive days. The Plan Manager Fee will be further reduced if total assets in the Plan reach certain levels.
(4) For its services related to administering the Plan, each Investment Option (with the exception of the Guaranteed Option) pays to the Board an Administrative Fee equal to the stated percentage of the average daily net assets held by that Investment Option.
(5) The Total-Annual Asset-Based Fees equal the Estimated Underlying Mutual Fund Expenses plus the Plan Manager Fee and the Administrative Fee. You should refer to the Investment Cost Example below for the total assumed investment cost over 1-, 3-, 5-, and 10-year periods.
(6) Effective July 1, 2011, the Plan Manager and the Board have agreed to voluntarily waive the Money Market Option’s Plan Manager Fee and Administrative Fee, respectively, as necessary in an attempt to maintain at least a 0.00% return. The Plan Manager and the Board may discontinue the waiver at any time without notice. Please note that after the waivers, the net return for the Money Market Option may be negative.
(7) The Guaranteed Option does not pay a Plan Manager Fee or an Administrative Fee. TIAA-CREF Life, the issuer of the Funding Agreement, pays to TFI an annual asset-based fee for the services that TFI provides for this Investment Option. TIAA-CREF Life also pays the Board a fee, equal to 0.06% of the average daily net assets held by the Guaranteed Option for expenses related to administering this Investment Option. TIAA-CREF Life takes these fees, among other factors, into consideration when determining the interest credited to the Board on Funding Agreement accumulations.
Investment Cost Example
The example in the following table is intended to help you compare the cost of investing in the different Investment Options over various periods of time. This hypothetical example assumes that:
- You invest $10,000 in a Savings Trust Account for the time periods shown below.
- Your investment has a 5% compounded return each year, except for the Guaranteed Option, which is assumed to have a 3% compounded return each year.
- You withdraw the assets from your Savings Trust Account at the end of the specified periods for qualified higher education expenses.
- Total annual asset-based fees remain the same as shown in the Fee Table above.
- The example does not consider the impact of any potential state or federal taxes on the redemption.
Although your actual costs may be higher or lower, based on the above assumptions your costs would be:
| Investment Cost Example | ||||
|---|---|---|---|---|
| Investment Option | Approximate Cost of $10,000 Investment |
|||
| One Year | Three Years | Five Years | Ten Years | |
| Managed Allocation Option | ||||
| Age Band 0-3 Years | $36 | $113 | $197 | $444 |
| Age Band 4-7 Years | $36 | $113 | $197 | $444 |
| Age Band 8-11 Years | $37 | $117 | $202 | $456 |
| Age Band 12-14 Years | $37 | $116 | $202 | $456 |
| Age Band 15-17 Years | $39 | $122 | $214 | $481 |
| Age Band 18 and Over | $40 | $126 | $219 | $494 |
| Aggressive Managed Allocation Option | ||||
| Age Band 0-3 Years | $34 | $106 | $186 | $419 |
| Age Band 4-7 Years | $35 | $109 | $191 | $431 |
| Age Band 8-11 Years | $36 | $113 | $197 | $444 |
| Age Band 12-14 Years | $36 | $113 | $197 | $444 |
| Age Band 15-17 Years | $37 | $116 | $202 | $456 |
| Age Band 18 and Over | $39 | $122 | $214 | $481 |
| 100% Equity Option | ||||
| $30 | $93 | $163 | $369 | |
| Balanced Fund Option | ||||
| $38 | $119 | $202 | $469 | |
| Money Market Option | ||||
| $41 | $129 | $225 | $506 | |
| 100% Fixed-Income Option | ||||
| $37 | $116 | $202 | $456 | |
| Guaranteed Option | ||||
| $0 | $0 | $0 | $0 | |
The table below indicates that there are no additional fees and expenses deducted from each account/paid directly by the Account Owner.
| Additional Fees | ||||
|---|---|---|---|---|
| Percent | Dollars | |||
| Application Fee | 0% | $0 | ||
| Cancellation Fee | 0% | $0 | ||
| Change in Beneficiary Fee | 0% | $0 | ||
| Change in Investment Options | 0% | $0 | ||
| Other Charges as applicable | 0% | $0 | ||
