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With nine different investment options, the Utah Educational Savings Plan lets you choose options with varying degrees of risk—and potential reward. You might choose an aggressive option that takes advantage of the equity markets if you are starting early and have a longer amount of time to save. Or you might get started with a more conservative choice if you are close to needing the funds for college and want to reduce the risk of loss of your contributions and any earnings you may have already accumulated.
Eight of the options include investments in funds offered by The Vanguard Group; the ninth investment option is an investment in the Utah Public Treasurers Investment Fund (PTIF). You must select one option per account when completing the Account
Agreement, Form 100. All of your future contributions to the account will be invested according to the investment option you selected when you opened your account. Keep in mind that subject to Section 529 and the rules of UESP, you can only change your investment option once per calendar year or in connection with a change in the beneficiary. To do so, you must submit an Investment Option Change, Form 405 to UESP.1
Age-Based Options
UESP offers the following five age-based options:
- Option 2, S&P Index/Bonds/Money Market
- Option 3, S&P Index/Bonds
- Option 7, Diversified-A
- Option 8, Diversified-B
- Option 9, Diversified-Bonds Emphasis
Each of these options is designed to take into account the beneficiary’s age and the number of years before the beneficiary is expected to attend an eligible educational institution. Within these options, you can invest according to your risk tolerance, allowing you to invest in a conservative, moderate or aggressive plan. Each option provides you with a portfolio that automatically changes the allocation of money to be weighted less in stocks and more in bonds and/or Public Treasurers Investment Fund (PTIF) investments as the beneficiary approaches college enrollment age. As the beneficiary ages, assets are automatically moved to more conservative investments to preserve capital as disbursements begin.
If you establish an age-based account, UESP will look at the age of the beneficiary and allocate all contributions according to the asset allocations specified for that beneficiary’s age bracket. The assets in each account will be reallocated at the end of the business day following the beneficiary’s birthday that places them into the next age bracket, as long as no other transactions are pending on your account at that time. In each age-based option, UESP will move the account balance into the “College Enrolled” investment bracket once it receives a disbursement request indicating that the beneficiary is enrolled. If the beneficiary is over 18 years old at the time the account is established but has not yet enrolled in an eligible educational institution and you select an age-based option, your contribution(s) will be invested with those investment brackets for beneficiaries who are age 16 and older but have not yet enrolled in college.
Static Options
UESP offers the following four static options:
- Option 1, Public Treasurers Investment Fund (PTIF)
- Option 4, S&P Index
- Option 5, Bonds
- Option 6, Diversified Stocks
Unlike the age-based options, the static options do not change asset allocations as your child ages. Instead, the allocation of money to the investment type in each account remains the same over time. If you choose to invest in a static option that has a significant weighting in stocks, you may want to consider reallocating your investment option to a more conservative option as your beneficiary approaches college enrollment.2
Utah Public Treasurers Investment Fund
UESP also invests account money in the Utah Public Treasurers
Investment Fund (PTIF). Securities in the fund include certificates
of deposit, commercial paper, short term corporate notes, and
obligations of the U.S. Treasury and certain agencies of the U.S.
Government. These securities are issued by top rated, highly
credit-worthy corporations and government agencies and are
intended to represent very limited risk to the investor. The yield
of the fund will fluctuate with current interest rates. Past performance
is not necessarily indicative of future results. Investments
in the pool are not insured or otherwise guaranteed by the
Federal Deposit Insurance Corporation (FDIC), the State of
Utah, or any other government agency. More information about
the PTIF including interest rates can be found at http://www.treasurer.state.ut.us/ptifrate.html.
Vanguard (http://www.vanguard.com)
When you invest in Utah Educational Savings Plan, you receive
units of the UESP investment pool that invests in the underlying
investments managed by Vanguard and the PTIF. You will
not own shares of the underlying investments. For information on the Vanguard funds click on link below to learn about
fund performance, current market price, prospectus, risk, and other
valuable information. You may also request a prospectus for any of the Vanguard funds listed below by calling UESP at 800-418-2551, or by sending an email request to info@uesp.org.
Vanguard Institutional Total Bond Market Index Fund
Vanguard Institutional Index Fund Plus Shares
Vanguard Mid-Cap
Index Fund Institutional Shares
Vanguard Small-Cap Index Fund Institutional Shares
Vanguard International
Growth Fund Admiral Shares
Vanguard International
Value Fund
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Age-Based Investment Option Underlying Funds and Allocations.
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Static Investment Option Underlying Funds and Allocations.
Click here to download
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