Plan Disclosure Booklet - Oregon College Savings Plan

Plan Disclosure Booklet

June 2020

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Plan Disclosure Booklet

This Plan Disclosure Booklet has been identified by the Oregon 529 Savings Board (the Board) as the Offering Material (as defined in the College Savings Plans Network Disclosure Principles, Statement No. 6, adopted July 1, 2017) intended to provide substantive disclosure of the terms and conditions of an investment in the Oregon College Savings Plan

If you or the Beneficiary are not an Oregon State resident, before investing you should consider whether you or the Beneficiary's home state offers a Qualified Tuition Program that provides its taxpayers with favorable state tax and other state benefits such as financial aid, scholarship funds and protection from creditors that may only be available through an investment in the home state's Qualified Tuition Program, and which are not available through an investment in the Oregon College Savings Plan. Since different states have different tax provisions, this Plan Disclosure Booklet contains limited information about the state tax consequences of investing in the Oregon College Savings Plan.

Keep in mind that state-based benefits should be one of many appropriately weighted factors to consider when making an investment decision. In addition, you should periodically assess, and if appropriate, adjust your 529 Plan investment choices with your time horizon, risk tolerance, and investment objectives in mind.

None of the Program Administrators insures or guarantees Accounts or investment returns on Accounts. Investment returns are not guaranteed. Your account may lose value.

This Plan Disclosure Booklet contains important information you should review before opening an Account in the Oregon College Savings Plan, including information about the benefits and risks of investing. Please read it carefully and save for future reference. Capitalized terms used in this Plan Disclosure Booklet are defined in the Glossary (beginning on page 71).

Accuracy of Information in Plan Disclosure Booklet

The information in this Plan Disclosure Booklet is believed to be accurate as of the cover date, but is subject to change without notice. No one is authorized to provide information that is different from the information in the most current form of this Plan Disclosure Booklet, and participants in the Oregon College Savings Plan may rely solely on the information contained in this Plan Disclosure Booklet, the amendments and written supplements to this Plan Disclosure Booklet.

Other Important Information

529 Plans are intended to be used only to save for Qualified Expenses. The Oregon College Savings Plan is not intended to be used, nor should it be used, by any taxpayer for the purpose of evading federal or state taxes or tax penalties. Taxpayers should seek tax advice from an independent tax advisor based on their own particular circumstances.

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Contents

Plan Disclosure Booklet .............................................................................................................. 2 Accuracy of Information in Plan Disclosure Booklet ......................................................................... 2 Other Important Information....................................................................................................... 2 Getting Started.......................................................................................................................... 9 Summary .................................................................................................................................10 About the Oregon College Savings Plan ........................................................................................10 My Account .............................................................................................................................10 Fees ........................................................................................................................................10 Important Risks You Should Know About......................................................................................11 Investment Choices...................................................................................................................11 College Enrollment Year Investment Option..................................................................................11 Static Investment Option ...........................................................................................................11 Important Federal Tax Information..............................................................................................12 Important State of Oregon Tax Information..................................................................................12 General Information..................................................................................................................12 Plan Administration...................................................................................................................12 Glossary ..................................................................................................................................13 Participant Agreement ..............................................................................................................13 Account Owner/Custodian .........................................................................................................13 Successor Owner ......................................................................................................................13 Beneficiary...............................................................................................................................13 Control over the Account ...........................................................................................................14 Documents in Good Order .........................................................................................................14 Minimum Contributions.............................................................................................................14 Contribution Date.....................................................................................................................15 Allocation for Future Contributions .............................................................................................15 Contributions by Check..............................................................................................................15 Automatic Investment Plan (AIP).................................................................................................15 Electronic Funds Transfer...........................................................................................................16 Limitations on AIP and EFT Contributions .....................................................................................16 Payroll Direct Deposits...............................................................................................................17 Gift Contributions .....................................................................................................................17

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Rollover Contributions...............................................................................................................17 Refunded Distributions ..............................................................................................................18 Moving Assets from a UGMA/UTMA Account ...............................................................................18 Moving Assets from a Coverdell Education Savings Account (ESA) ....................................................19 Redeeming U.S. Savings Bonds (Series EE or Series I Bonds) ............................................................19 Additional Form Requirements for Rollovers, ESA's and Series EE or Series I Bonds ............................19 Year End Contributions ..............................................................................................................20 Trusts, Corporations, and other Entities as Account Owners............................................................20 Maximum Account Balance Limit ................................................................................................21 Excess Contributions .................................................................................................................21 Failed Contributions ..................................................................................................................21 Confirmation of Transactions......................................................................................................22 Account Statements..................................................................................................................22 Options for Unused Contributions: Changing a Beneficiary, Transferring Assets to Another of your Accounts .................................................................................................................................23 Changing Investment Strategy....................................................................................................24 Change of Account Owner..........................................................................................................24 Recovery of Incorrect Amounts...................................................................................................24 Correcting Errors ......................................................................................................................24 Disclosure Relating to Internet Access..........................................................................................25 General ...................................................................................................................................26 Method of Payment ..................................................................................................................26 Timing of Distribution Request....................................................................................................26 Procedures for Distributions .......................................................................................................26 Qualified Distributions...............................................................................................................27 Non-Qualified Distributions ........................................................................................................27 Other Distributions ...................................................................................................................27 Records Retention ....................................................................................................................29 Tax Treatment of Distributions ...................................................................................................29 No Assets in Your Account..........................................................................................................30 Unclaimed Accounts..................................................................................................................30 Involuntary Termination of Accounts ...........................................................................................30 Account Restrictions .................................................................................................................31

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Fees ........................................................................................................................................32 Total Annual Asset Based Fees....................................................................................................32 College Enrollment Year Portfolio Fee Structure Tables ..................................................................33 Service-Based and Other Fees.....................................................................................................34 Approximate Cost for $10,000 Investment....................................................................................35

...........................................................................................................................................35 College Enrollment Year Portfolios...........................................................................................36 Static Portfolios.....................................................................................................................37 Key Factors of the Oregon College Savings Plan .............................................................................37 The Oregon College Savings Plan Investment Vehicle .....................................................................37 Principal and Returns Not Guaranteed; No Insurance.....................................................................37 Market Uncertainties ................................................................................................................38 Inflation ..................................................................................................................................38 Limited Investment Direction; Liquidity........................................................................................38 Discretion of the Board; Potential Change to the Oregon College Savings Plan...................................39 Suitability ................................................................................................................................40 The Oregon College Savings Plan Investment Options Not Designed for K-12 Tuition ..........................40 Meeting Education Expenses Not Guaranteed...............................................................................40 IRS Regulations Not Final ...........................................................................................................40 Effect of Future Law Changes .....................................................................................................41 Death of Account Owner............................................................................................................41 Tax Considerations....................................................................................................................41 Securities Law ..........................................................................................................................41 Financial Aid ............................................................................................................................42 Medicaid Eligibility....................................................................................................................42 General Portfolio Risks ..............................................................................................................43 Investment Choices...................................................................................................................44 Investments Overview...............................................................................................................44 College Enrollment Year Investment Option..................................................................................45 Determining the Appropriate Portfolio .....................................................................................45 Here's how it Works ..................................................................................................................46 College Enrollment Year Investment Option..............................................................................47 Portfolio Rebalancing.............................................................................................................47

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College Enrollment Year Investment Option Portfolios ...................................................................48 Objective: ............................................................................................................................48 Strategy ...............................................................................................................................48 Risks....................................................................................................................................50

Static Investment Option Portfolios .............................................................................................51 Target Risk Conservative ........................................................................................................52 Target Risk Model .................................................................................................................53 Target Risk Aggressive............................................................................................................54 Diversified US Equity..............................................................................................................55 Diversified International Equity ...............................................................................................56 Diversified Fixed Income ........................................................................................................56 Diversified Inflation Protection................................................................................................58 Balanced Index .....................................................................................................................59 Social Choice Brand ...............................................................................................................60 Short Term Fixed Income Index ...............................................................................................61 US Equity Index.....................................................................................................................62 International Equity Index ......................................................................................................62 Fixed Income Index................................................................................................................63 FDIC- Insured........................................................................................................................63 Interest Rates ........................................................................................................................64 Principal Plus Interest ............................................................................................................64

Underlying Fund Descriptions .....................................................................................................65 Underlying Funds ..................................................................................................................65

..............................................................................................................................................67 Additional Investment Information..............................................................................................68

Assets Held in Trust ...............................................................................................................68 Treatment of Dividends and Capital Gains.................................................................................68 The Target Indexes of Certain Underlying Funds May Change ......................................................68 Portfolio Changes ..................................................................................................................68 Requesting Additional Information about the Underlying Funds ...................................................69 Investment Direction Control by Account Owner ...........................................................................70 Investment Selection .............................................................................................................70 Changing Portfolios ...............................................................................................................70

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Investment Performance ...........................................................................................................70 Important Federal Tax Information..............................................................................................71

General................................................................................................................................71 Risk of Tax Law Changes.........................................................................................................71 Federal Tax-Deferred Earnings ................................................................................................71 Federal Gift/Estate Tax...........................................................................................................71 Transfers and Rollovers ..........................................................................................................72 ABLE Rollover Distributions.....................................................................................................72 Coverdell Education Savings Account (ESA) ...............................................................................72 Education Tax Credits ............................................................................................................72 All Distributions ....................................................................................................................72 Qualified Expense Distributions ...............................................................................................73 Other Distributions................................................................................................................73 Refunded Distributions ..........................................................................................................73 Non-Qualified Distributions ....................................................................................................73 Determination of Taxable Earnings ..........................................................................................73 General Information..................................................................................................................74 Your Account........................................................................................................................74 Customer Identification Verification.........................................................................................74 Suspension of Services ...........................................................................................................74 Changes to an Account...........................................................................................................74 Keep Legal Documents for Your Records...................................................................................75 Changes to the Plan Disclosure Booklet ....................................................................................75 Changes to State Statutes; Adoption of Rules ............................................................................75 Determination of Maximum Account Balance Limits...................................................................75 Guide to Interpretation..........................................................................................................75 Continuing Disclosure ............................................................................................................75 Custodial Arrangements.........................................................................................................76 Creditor Protections ..............................................................................................................76 Representation .....................................................................................................................76 Severability ..........................................................................................................................76 Precedence ..........................................................................................................................76 Oregon State Law..................................................................................................................76

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Claims; Disputes....................................................................................................................77 Lawsuits Involving Your Account..............................................................................................77 Binding Nature......................................................................................................................77 Plan Administration...................................................................................................................78 The Oregon College Savings Plan .............................................................................................78 Other Qualified Tuition Programs Administered by the Board......................................................78 The Oregon 529 Savings Board (Board).....................................................................................78 Assets Held in Trust ...............................................................................................................78 Program Manager .................................................................................................................78 Glossary ..................................................................................................................................79 Defined Terms ......................................................................................................................79 ..............................................................................................................................................85 Participation Agreement............................................................................................................86 Indemnity ............................................................................................................................86 Contact Information..................................................................................................................89

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