General Plan Questions

What is a 529 plan?
What is the Utah Educational Savings Plan (UESP)?
What are the incentives for saving through UESP?
What if I don't live in Utah?
Does UESP have any FDIC-insured options?
Does the State of Utah or UESP make any guarantees?
What level of earnings can I expect to receive?


What is a 529 plan?
529 plans are tax-advantaged savings vehicles designed to encourage individuals to save for the costs of higher education. They were established by Section 529 of the Internal Revenue Code of 1986, as amended.

What is the Utah Educational Savings Plan (UESP)?
The Utah Educational Savings Plan is the official and only 529 plan sponsored by the State of Utah. It is a "direct-sold" 529 plan, which means that an account can be set up and contributions can be made by dealing directly with UESP. A financial adviser or broker-dealer does not need to be involved. The trust fund is authorized by the Utah Legislature and designed to comply with Section 529. It is administered by the Utah State Board of Regents acting in its capacity as the Utah Higher Education Assistance Authority.

What are the incentives for saving through UESP?
Your account will grow free from federal and Utah state income taxes while you save. If you use your account for qualified higher education expenses, earnings are also exempt from federal and Utah state income taxes. Utah taxpayers have the following additional state tax benefits:

Utah Individuals: The 2009 individual Utah state tax credit amount is up to $1,740 in contributions per beneficiary multiplied by five percent, equaling $87.00 per beneficiary. If filing jointly, the maximum credit is $3,480 in contributions multiplied by five percent, equaling $174.00 per beneficiary. The credit does not phase out based on the taxpayer’s income. Married couples taking the tax benefits are not required to have separate UESP accounts.

Utah Trusts: The Utah tax credit for Utah trusts for 2009 is up to $1,740 in contributions per beneficiary multiplied by five percent, equaling $87.00 per beneficiary. A joint tax credit is not allowed for institutional accounts.

Utah Corporations: Utah corporations are eligible for a tax deduction equal to $1,740 in contributions per beneficiary. A joint tax benefit is not allowed for UESP institutional accounts.

To take advantage of the credit or deduction, the account must be established before the beneficiary turns 19 years of age. You also can gift up to $65,000 ($130,000 if filing jointly) at one time without adverse gift tax consequences, as long as you elect to prorate the gift over five years. Finally, to meet the diverse needs of the many families we serve, UESP offers a wide range of investment options with low fees on all accounts and special fee waivers for Utah residents.

What if I don't live in Utah?
You don't need to be a Utah resident or taxpayer to open a UESP account—you can invest in any 529 plan and still enjoy the same federal tax benefits. You should check to see if your or your beneficiary’s home state offers a 529 plan and, if so, whether it offers state tax or other benefits to its residents or taxpayers that may not be available to investors in UESP. Forty-nine states and the District of Columbia currently offer at least one 529 plan.

Does UESP have any FDIC-insured options?
Yes. UESP’s saving account offered through Zions First National Bank carries FDIC insurance up to the maximum amount set by law. This savings account is the sole underlying investment for one of our static options, Option 11: FDIC-Insured Savings. Selecting Option 11 as your investment option for an account would give you FDIC insurance up to $250,000 (that changes to $100,000 after December 31, 2013). (Some limitations might apply if you hold other accounts at Zions First National Bank. Read the Program Description to learn more.)

Additionally, some age-based accounts eventually allocate funds to the FDIC-insured savings account as the beneficiary ages or enrolls in college. For example, if you invest in Option 8 for a beneficiary who is 16 years old, 20 percent of the account funds are allocated to the savings account and are insured by the FDIC. Be sure to read the UESP Program Description for more information on how the FDIC insurance would apply to your balance in the savings account.

Does the State of Utah or UESP make any guarantees?
No, neither the State of Utah nor UESP makes any guarantees concerning the rate of return or preservation of your contributions to UESP accounts. Additionally, investments are not guaranteed by the Utah State Board of Regents, the Utah Higher Education Assistance Authority, the FDIC (except as noted above), or any other government agency. Account owners assume all the investment risks associated with these kinds of investments, including loss of principal.

Subject to the application of Zions First National Bank (Bank) and FDIC rules and regulations to each account owner, funds in the underlying savings account will retain their value, whether in Option 11 or when allocated to portions of Options 2, 7, 8, and 9.

Please read the UESP Program Description for more information on how FDIC insurance would apply to your investments.

What level of earnings can I expect to receive?
Investments in UESP accounts are subject to market changes and performance of the underlying investments. There are no guarantees that accounts will increase in value, not decrease in value, or achieve any rate of return. You could lose money, including the principal you invest, or not make money by investing in UESP.

© 2009 Utah State Board of Regents, all rights reserved.
The terms Utah Educational Savings Plan and UESP are registered service marks.

Investors should read the Program Description and consider all investment objectives, risks, charges, and expenses before investing. The Program Description is available for download on the Web or a hard copy can be mailed to you by requesting it online from this Web site.

FDIC Insurance. Except for the underlying investment specified below, investments in UESP are not insured by the Federal Deposit Insurance Corporation (FDIC). FDIC insurance is provided for the FDIC-insured savings account held in trust by UESP at Zions First National Bank (Bank). Funds in the savings account are insured by the FDIC on a pass-through basis to each account owner up to the maximum amount set by federal law—currently $250,000 through December 31, 2013, and $100,000 thereafter. The amount of FDIC insurance provided to an account owner is based on the total of (1) the value of an account owner’s investment in UESP’s FDIC-insured savings account plus (2) the value of other accounts held (if any) at the Bank, as determined by the Bank and by FDIC regulations.

No Other Insurance and No Guarantees. Investments in UESP are not insured nor guaranteed by the State of Utah, UESP, the Utah State Board of Regents, the Utah Higher Education Assistance Authority, other state agencies, federal government agencies (except to the extent noted above regarding FDIC insurance ), or any employees or directors of any such entities. Units in UESP have not been registered with the United States Securities and Exchange Commission or with any state securities commission.

Account Value. The value of your UESP account may vary depending on market conditions and the performance of the investment option you select. It could be more or less than the amount you contribute; in short, your investment could lose value. However, subject to the application of Bank and FDIC rules and regulations to each account owner, funds in UESP’s FDIC-insured savings account will retain their value, whether in Option 11 or when allocated to portions of Options 2, 7, 8, and 9.

Non-Utah taxpayers and residents should determine whether the state in which they or their beneficiary live or pay taxes offers a 529 plan that provides state tax or other benefits not otherwise available to them through UESP.

 

For more details about how our plan works, download a copy of our Program Description.

Click here to download a pdf.
Click here to request a mailed copy.