Sponsored by the State of Rhode Island, JP Morgan Fleming Asset Management and Alliance Capital Management have teamed up to offer the program, which is distributed by J.P. Morgan Fund Distributors Inc.
Created as part of the Small Business Jobs Protection Act of 1996, these state-administered college savings plans were turbocharged by the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) that, among other things, made qualified withdrawals from the plans free of federal income taxes. States have responded by rolling out new and enhanced plans that provide participants with broader arrays of investment choices and higher funding limits.
The JPMorgan Higher Education Plan offers four asset allocation portfolios that invest in a mix of stock and bond mutual funds managed by JPMorgan Fleming Asset Management and Alliance Capital Management. According to JPMorgan, three of the investment portfolios retain a consistent focus over time – equity growth, balanced, and conservative. The fourth option employs an age-based allocation approach, which becomes more conservative as the beneficiary approaches college age.
The program currently has a contribution limit of $287,070 and a minimum contribution of $50 per month for investors participating in the automatic contribution plan.
The JPMorgan Higher Education Plan also offers estate-planning benefits, such as a five-year accelerated gifting feature, which means a donor can contribute up to five years worth of maximum single year contributions in one year. Clients can generally contribute up to $55,000 per beneficiary in a single year to the JPMorgan Higher Education Plan, or up to $110,000 for married couples, without federal gift tax consequences.
More information, including a college savings calculator is available at a dedicated JPMorgan Fleming 529 plan site, www.jpmorganfleming.com/education . The site also offers up to date individual account information including account balances and performance of the funds, as well as frequently asked questions (FAQs), registration forms and other literature.