In addition to payroll and college savings features, the product boasts estate planning incentives – employees will have the ability to gift five times the amount allowed under the existing $11,000 annual federal gift exclusion up front.
At the same time, account owners may elect to contribute up to $110,000 for married couples, or $55,000 for individuals, per beneficiary in a single year without federal gift-tax consequences provided that no additional gifts to the same beneficiary are made over a five-year period.
Employees will be able to choose from 15 investment portfolios composed of mutual funds offered by AIM Advisors, Franklin Templeton Investments, MFS and Merrill Lynch Investment Managers. There are no income or age limits, and assets can be used at most accredited public and private colleges as well as technical and graduate schools across the US.
The NextGen Plan also offers a maximum contribution $235,000 per beneficiary for contribution to college education funds.
« Sources: Fund Probe Uncovers Widespread Discount Problems