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 “We are always looking for ways to provide investors with the
highest quality investment options for the best value,” Treasurer
Frerichs said. “We are grateful to see Morningstar’s improved rating
reflect the hard work our team has done to make saving for higher
education more affordable for Illinois families.”
Morningstar identified 29 plans expected to outperform peers on a
risk-adjusted basis, assigning those plans Gold, Silver, and Bronze
Morningstar Analyst Ratings. The plans are evaluated based on five
key pillars -- Process, Performance, People, Parent, and Price.
According to Morningstar, Illinois’ advisor-sold Bright Directions
College Savings Program was upgraded from bronze to silver for a
number of reasons, including cutting fees significantly in the
process of renegotiating a contract with program manager Union Bank
and Trust.
Earlier this month, Treasurer Frerichs announced the elimination of
the Bright Directions $10 set-up fee and $3 quarterly maintenance
fee to ensure more investment dollars will go to college savings.
Management fees also will be slashed by 43 percent. More than
104,000 accounts will benefit from the new terms, which take effect
Nov. 15.
In addition to Bright Directions, the Treasurer’s Office also
manages the Bright Start College Savings Program. Both plans are
designed as “qualified tuition programs” under Section 529 of the
Internal Revenue Code. They are different than pre-paid tuition
plans. Currently, more than 400,000 residents hold a Bright
Directions or Bright Start account.
Money in a 529 college savings account can be used at eligible
educational institutions, including public and private, two-year,
four-year colleges and universities and certain technical and
vocational schools.
For more information about the Treasurer’s Office 529 College
Savings programs, visit
www.illinoistreasurer.gov.
About the Illinois Treasurer
The Illinois Treasurer is the state’s Chief Investment Officer and
Frerichs is a Certified Public Finance Officer. He protects
consumers by encouraging savings plans for college or trade school,
increasing financial education among all ages, and removing barriers
to a secured retirement. As the state’s Chief Investment Officer, he
actively manages approximately $25 billion. Currently, the portfolio
includes $13 billion in state funds, $7 billion in college savings
plans and $5 billion on behalf of local and state governments. The
investment approach is cautious to ensure the preservation of
principal and returns $28 to the state for every $1 spent in
operations. The Treasurer’s office predates Illinois’ incorporation
in 1818. Voters in 1848 chose to make it an elected office.
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About the Bright Directions College Savings Program
The Bright Directions College Savings Program is part of the
Illinois College Savings Pool and is designed to qualify as a
qualified tuition program under the provisions of Section 529 of the
Internal Revenue Code. The Bright Directions College Savings Program
is sponsored by the State of Illinois and administered by the
Illinois State Treasurer, as Trustee. Union Bank & Trust Company
serves as Program Manager, and Northern Trust Securities, Inc. acts
as Distributor. Investments in the Bright Directions College Savings
Program are not guaranteed or insured by the State of Illinois, the
Illinois State Treasurer, Union Bank & Trust Company, Northern Trust
Securities, Inc., the Federal Deposit Insurance Corporation, or any
other entity.
An investor should consider the investment objectives, risks, and
charges and expenses associated with municipal fund securities
before investing. This and other important information is contained
in the fund prospectuses and the Bright Directions Program
Disclosure Statement (issuer’s official statement), which can be
obtained from your financial professional and on
BrightDirections.com and should be read carefully before investing.
You can lose money by investing in a portfolio. Each of the
portfolios involves investment risks, which are described in the
Program Disclosure Statement.
An investor should consider, before investing, whether the
investor’s or designated beneficiary’s home state offers any state
tax or other benefits that are only available for investments in
such state’s 529 plan. Investors should consult a tax advisor.
[Office of the Illinois State
Treasurer Michael Frerichs]
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