Glossary

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• ABLE Account

  An ABLE account is a savings account that is similar in design to a 529 plan, but is used to save for the future costs of a special needs beneficiary.

• Account Owner

  The person who establishes a 529 plan account. The account owner controls the investments in and distributions from such account and may change the beneficiary.

• Active Management

  A portfolio is actively managed when the portfolio manager dynamically changes the investments in the portfolio from time to time, with the goal of outperforming one or more benchmarks.

• Additional Tax

  See Tax Penalty.

• Administrative Fee

  A fee charged by the state that sponsors and administers the 529 plan.

  See also: Plan Management Fee.

• Advisor-Sold

  An advisor-sold 529 plan is a 529 plan in which accounts are sold by a financial professional, often with various fees and charges not applied to accounts in a direct-sold 529 plan.

• Age of Majority

  The age of majority is the age at which a child becomes an adult. It is typically an age from 18 through 21, depending on the state.

• Age-Based Asset Allocation Portfolio

  An age-based asset allocation portfolio is a portfolio offered as part of an age-based investment option.

• Annual Rate of Return

  The annual rate of return is the return on investment expressed as a percentage of the investment’s assets.

• Asset

  An asset is property with financial value that can be bought and sold.

• Asset Allocation Portfolio

  Account assets invested in an age-based investment option will be allocated initially to an age-based asset allocation portfolio which corresponds to the age of the account’s beneficiary. The allocation of each age-based asset allocation portfolio’s assets reflects the time horizon of the portfolio’s beneficiary population (based on the age and likely time until enrollment). Account assets in a portfolio are redeemed when the beneficiary attains an age greater than the age range that corresponds to such portfolio, and are reinvested in another portfolio that corresponds to the beneficiary’s age. The asset allocation strategy for this investment option becomes increasingly conservative with each successive age-based asset allocation portfolio.

• Asset Class

  An asset class is a type of investment. Examples include equities (stocks), fixed income (bonds), money market (short-term) and cash.

• Automated Clearing House (ACH)

  ACH is a form of electronic funds transfer that is popular with direct deposit for payroll and tax refunds.

• Automatic Investment Plan (AIP)

  An AIP periodically transfers money from a bank account or through payroll direct deposit to a 529 plan account.