Summary of Options

With eleven different investment options, the Utah Educational Savings Plan (UESP) 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 losing contributions and earnings you may have already accumulated.

Nine of the options include investments in funds offered by The Vanguard Group®; Option 1 is an investment in the Utah Public Treasurer's Investment Fund (PTIF); and Option 11 is an FDIC-insured savings account offered by Zions First National Bank. You must select one option per account when opening an account online or completing the Account Agreement form. All of your future contributions to the account will be invested according to the investment option you selected when you open your account. Keep in mind that subject to Section 529 and the rules of UESP, you can change your investment option twice during calendar year 2009 or in connection with a change in the beneficiary. To do so, you must submit an Investment Option Change form to UESP.1

Age-Based Options
UESP offers the following five age-based options:

Learn more about individual age-based investment options.

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 choose a conservative, moderate, or aggressive investment 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 an FDIC-insured savings account 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. With the exception of Option 3, all the age-based options are moved to the FDIC-insured savings account at college enrollment. Option 3, at college enrollment, continues to invest in equity markets and bonds.

If you establish an age-based account, UESP will allocate all contributions according to the asset allocations specified for your beneficiary’s age bracket. The assets in each account will be reallocated at the end of the business day on 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 a disbursement request is received 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 six static options:

Learn more about individual static investment options.


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 Treasurer's Investment Fund
UESP also invests account money in the Utah Public Treasurer's 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.utah.gov/investmentfund.html.

FDIC-Insured Savings (the May 2009 APY was 1.19%)
Money invested in Option 11 is pooled into a savings account at Zions First National Bank (Bank). Additionally, some age-based accounts allocate funds to the savings account as the beneficiary ages. This savings accoun t is held in trust by UESP, with the ownership interest of each account owner kept distinct in UESP’s records. Deposits 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 individual is based on the total of (1) the value of an account owner’s investments in UESP’s FDIC-insured savings account plus (2) the value of other accounts held (if any) at Zions First National Bank, as determined by the Bank and by FDIC regulations. It is the account owner’s responsibility to determine how investments in the savings account would be aggregated with other investments at the Bank for purposes of the FDIC insurance. UESP’s FDIC-insured savings account is offered in partnership with Zions First National Bank. Established in 1873, Zions Bank is a subsidiary of Zions Bancorporation, which operates approximately 500 offices in ten Western and Southwestern states. For more information, visit www.zionsbank.com.

The Vanguard Group® (http://www.vanguard.com)
When you invest in the Utah Educational Savings Plan, you can choose to select an investment option with the underlying investments owned by UESP and managed by Vanguard. Click on link below to learn about Vanguard 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 e-mail request to info@uesp.org.

Vanguard Institutional Total Bond Market Index Fund
Vanguard Institutional Index Fund 
Vanguard Mid-Cap Index Fund
Vanguard Small-Cap Index Fund 
Vanguard International Growth Fund
Vanguard International Value Fund
Vanguard Total Stock Market Index Fund
Vanguard Institutional Developed Markets Index Fund

1 For calendar year 2009, you can change the investment option twice on an existing UESP account for the same beneficiary. You can also change the investment option at any time in connection with a transfer of the account to a new beneficiary. Please see the current Program Description for details and limitations.

2 As a result of market gains and losses, dividend earnings, and account fees, the allocation of assets within a UESP account may differ over time from the target asset allocation for each UESP investment option, as shown in the Program Description. In order to maintain the target asset allocation for the age-based investment options (Options 2, 3, 7, 8 and 9) and for the static investment option in diversified stocks (Option 6 and Option 10), UESP will rebalance each applicable UESP account annually on the beneficiary’s birthday.

Please note that there are limitations on your ability to reallocate investment options for the same beneficiary. For more information, see the Investment Information section in the UESP Program Description,  

 

© 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.

 

Learn more about individual age based investment options.
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Learn more about individual static investment options
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