FAQs: How your MOST 529 Plan is changing

Changes effective February 10, 2016:
Expense ratios, contribution limits, and fees

How are the expense ratios changed?

Expense ratios for MOST 529 Plan investment options have dropped, from a range of 0.32% to 0.61% to a range of 0.23% to 0.58%. This change means more of your money stays invested in your account to use for college costs.

What are the new expense ratios for each portfolio?

Portfolio

Previous expense

New expense

Vanguard Aggressive Growth Portfolio

0.32%

0.23%

Vanguard Growth Portfolio

0.32

0.23

Vanguard Moderate Growth Portfolio

0.32

0.23

Vanguard Conservative Growth Portfolio

0.32

0.23

Vanguard Income Portfolio

0.32

0.23

Vanguard Conservative Income Portfolio

0.32

0.23

Vanguard Interest Accumulation Portfolio

0.29

0.23

Vanguard Windsor™ II Portfolio*

0.54

0.47

Vanguard Explorer™ Portfolio*

0.60

0.57

Vanguard International Growth Portfolio*

0.61

0.58

Vanguard Morgan™ Growth Portfolio*

0.52

0.45

Vanguard Total Bond Market Index Portfolio

0.32

0.23

Vanguard Total International Bond Index Portfolio

0.38

0.31

Vanguard Total Stock Market Index Portfolio

0.32

0.23

Vanguard Total International Stock Index Portfolio

0.36

0.28

*These portfolios will be closing effective April 8, 2016. Five new investment options from Dimensional Fund Advisors (DFA) will be opened in their place. Refer to "Changes effective April 8, 2016: Investment options" for more information.

 

How have the plan's contribution limits changed?

There is now no minimum contribution to open a MOST 529 Plan account, or for subsequent contributions to an existing account.

How have the plan's program fees changed?

The $10 account fee has been eliminated. This fee was previously charged to account owners who weren't residents of Missouri, who weren't signed up for e-delivery, or who had accounts with less than $10,000. We've also eliminated the fees for outgoing wires, reissuing disbursement checks, and requests for historical statements.

Changes effective April 8, 2016: Investment options

How are the MOST 529 Plan investment options changing?

The plan is closing four portfolios and opening five new portfolios. Portfolios being closed:

  • Vanguard Windsor II Portfolio
  • Vanguard Explorer Portfolio
  • Vanguard International Growth Portfolio
  • Vanguard Morgan Growth Portfolio

New portfolios from Dimensional Fund Advisors (DFA) being opened:

  • DFA U.S. Large Cap Value Portfolio
  • DFA U.S. Small Cap Portfolio
  • DFA International Core Equity Portfolio
  • DFA U.S. Core Equity 1 Portfolio
  • DFA Two-Year Global Fixed Income Portfolio

What are the expense ratios for the new DFA investments?

Portfolio

Total annual asset-based fee*

DFA U.S. Large Cap Value Portfolio

0.47%

DFA U.S. Small Cap Portfolio

0.57

DFA International Core Equity Portfolio

0.58

DFA U.S. Core Equity 1 Portfolio

0.39

DFA Two-Year Global Fixed Income Portfolio

0.37

*Total annual asset-based fee as of April 8, 2016.

 

Do I need to do anything with my investments because of these changes?

No. You don't need to do anything at this time. All future contributions and existing accounts in the portfolios being closed will automatically be moved to a new portfolio with a similar investment strategy.

If I have money in a portfolio that's closing, which new portfolio will it be moved to?

Your money will move from here …

To here …

Vanguard Windsor II Portfolio

DFA U.S. Large Cap Value Portfolio

Vanguard Explorer Portfolio

DFA U.S. Small Cap Portfolio

Vanguard International Growth Portfolio

DFA International Core Equity Portfolio

Vanguard Morgan Growth Portfolio

DFA U.S. Core Equity 1 Portfolio

When will the transition between the closed and new portfolios take place?

As of 3 p.m., Central time, on Thursday, April 7, 2016, all contributions into the portfolios being closed will be automatically directed to the new portfolios. Balances in the closed portfolios will move to the new portfolios after 3 p.m., Central time, on Friday, April 8, 2016.

During the transition, you won't be able to request withdrawals or exchanges from the portfolios being closed. Any requests received in good order after 3 p.m., Central time, on Thursday, April 7, 2016, or on Friday, April 8, 2016, will be processed on Monday, April 11, 2016, using the net asset value of the new portfolios as of Friday, April 8, 2016.

How will I know that my assets were transferred successfully?

You'll receive a confirmation statement after the transition, and you'll be able to review your account activity online, beginning Monday, April 11, 2016.

Will this transition count toward my two annual exchanges?

No. Federal law permits you to move existing 529 plan account assets to a different mix of investment options up to two times within a calendar year—or whenever you change the beneficiary of your account. Because this transition is initiated by the plan, it won't be considered as one of your two permitted annual exchanges.

What if I don't like the investment option that my money is transferred to?

You may move some or all of your investments to any other portfolio before or after the transition. Just remember that any changes that you make will count toward your two permitted annual exchanges. (If you've already used your two exchanges for 2016, you won't be able to make any others.)

Do I need to make changes to my recurring contributions (also known as an automatic investment plan or AIP) or to my payroll direct deposit?

No. There's nothing you need to do to ensure that your recurring contributions or payroll direct deposit continues to withdraw funds from your designated account. After the transition, your recurring contributions or payroll direct deposit will continue to apply to your account and will be adjusted, as appropriate, to make contributions to the new portfolios.

Where can I find out more information about these new portfolios?

To learn more about MOST 529's investment options, go to the Individual portfolios page on this site.

To learn more about the underlying DFA mutual funds, visit us.dimensional.com.

Changes due to the PATH Act of 2015

What is the Protecting Americans from Tax Hikes (PATH) Act of 2015?

On December 18, 2015, the Protecting Americans from Tax Hikes (PATH) Act of 2015 (the "PATH Act") was signed into law. The PATH Act introduces various improvements to 529 plan tax treatment effective for tax years beginning after December 31, 2014, including but not limited to computers as qualified expenses and the recontribution of refunded qualified higher-education expenses.

When are expenses for computers considered qualified expenses?

Expenses for the purchase of computer or peripheral equipment (e.g., printers), computer software, or internet access and related services that are to be used primarily by the beneficiary during any of the years the beneficiary is enrolled at an eligible educational institution are now included in the definition of qualified higher-education expenses. A distribution from a 529 account to pay for these expenses generally won't be subject to federal income tax.

What are the tax rules for the recontribution of qualified higher-education expenses?

A refund from an eligible educational institution of amounts paid out of the beneficiary's 529 plan account for qualified higher-education expenses won't be included in the beneficiary's gross income if the refunded amounts are recontributed to a 529 plan account of the beneficiary within 60 days of the refund. The recontributed amount can't exceed the amount of the refund.

Who can I consult regarding my specific situation as it relates to the PATH Act?

Account owners are encouraged to consult their tax advisors with questions about how these improvements and other 529 plan-related changes due to the PATH Act might impact their individual situations.

Note: If you started your MOST 529 account through a financial advisor (MOST 529 Advisor Plan), there are changes coming to your plan that you should be aware of.

Learn about changes to your MOST 529 Advisor Plan