New Administrator For Illinois’ Bright Start 529 Plan
The Illinois 529 College Savings Program, named Bright Start, is currently in the process of transitioning to a new program administrator.
For plan participants, this looks to be a very positive change and should provide a few new attractive options for your investments including the introduction of index fund options from Vanguard.
The new administrator will be OFI Private Investments Inc., a subsidiary of OppenheimerFunds, Inc. and there will be lower annual fees, enhanced online account management and a wider selection of investment options. The transition will not require any action on the part of participants and account balances will be moved to similar investments in the new plan.
Beginning July 23rd, Bright Start investors will be able to choose between an actively managed strategy or an index strategy. The active investments will be managed by OppenheimerFunds while the index investments will be managed by Vanguard. Further, there will be a choice between an age-based portfolio or a static portfolio.
The static portfolios will include an equity portfolio, balanced portfolio, fixed income portfolio, and principal protection income portfolio. There will be 6 different age-based portfolios with the asset allocation becoming more conservative as the child gets older.
One of the most attractive changes will be the lower account fees. The previous plan administrators had fees that were on the high side so this will be a welcome change. For investors that select the index strategies, they will have plan fees that range from 0.20% to 0.23% although there will be an annual account fee of $10 per index portfolio. The active strategies come with plan fees between 0.38% and 0.63% which is still a nice improvement.
If you’re currently enrolled in the Illinois Bright Start College Savings Plan, you should be seeing these changes in the next week and it appears that the plan will be much more competitive with other state plans. Please stop by and share your thoughts regarding the new plan and investment options.