important changes coming to the pa 529 investment plan! · determine if your investment portfolio...

Important Changes Coming to the PA 529 Investment Plan!The PA 529 Investment Plan (IP) is redesigning the three age-based options, increasing international stock and bond allocations, plus adding a new international bond portfolio, giving you more flexibility and choice as you help save for education.

See Inside for More Details!

PRESORTEDSTANDARD MAIL

U.S. POSTAGEPAID

HARRISBURG, PAPERMIT NO. 676

PO Box 62220Harrisburg, PA 17106

2

What’s Changing?The PA 529 College Savings Program is making some important changes to your PA 529 Investment Plan (IP) account. An overview of these changes is outlined in this brochure.

First, the PA 529 IP will be offering the Vanguard Total International Bond Index Portfolio for investors interested in diversifying investments with international exposure.

Second, the PA 529 IP is increasing the international equity and bond allocations in multi-fund portfolios.

Third, the PA 529 IP is making changes to the three age-based options by adding seven new portfolios which will allow for a smoother transition from more aggressive to more conservative investments as your loved one approaches college (Glide Path Smoothing).

Addition of Vanguard Total International Bond Index PortfolioPA 529 IP account owners will now be able to save in the Vanguard Total International Bond Index Portfolio, which is designed to provide broad exposure to non-U.S. investment-grade bonds.

Changes to International Equity and Bond AllocationsTo increase exposure to international markets, the PA 529 IP will be increasing international equity and bond allocations by adjusting the overall allocation of the following portfolios:

• Aggressive Growth Portfolio

• Growth Portfolio

• Moderate Growth Portfolio

• Conservative Growth Portfolio

• Income Portfolio

• Conservative Income Portfolio

An overview of the current and new portfolio asset allocations can be found on the following chart.

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Age-Based Option Glide Path Smoothing

Portfolios with higher concentrations in bonds and short-term investments tend to be less volatile than those with more stocks. Less volatile portfolios generally may not decline in value as much when markets decline, but also may not appreciate in value as much when markets go up. Investments in bonds are subject to interest rate, credit and inflation risk.

Age of Beneficiary Conservative Option Moderate Option Aggressive Option

5 or younger

6 through 10

11 through 15

16 through 18

19 or older

35% Stocks65% Bonds

60% Stocks40% Bonds

20% Stocks80% Bonds

75% Bonds25% Short-term Reserves

100% Short-term Reserves

Moderate Growth Portfolio

Conservative Growth Portfolio

Income Portfolio

Conservative Income Portfolio

Interest Accumulation Portfolio

80% Stocks20% Bonds

60% Stocks40% Bonds

35% Stocks65% Bonds

20% Stocks80% Bonds

75% Bonds25% Short-term Reserves

Growth Portfolio



Income Portfolio

Conservative Income Portfolio

100% Stocks

80% Stocks20% Bonds

60% Stocks40% Bonds

35% Stocks65% Bonds

20% Stocks80% Bonds

Aggressive Growth Portfolio

Growth Portfolio



Income Portfolio

Current PA 529 IP Age-Based Option Glide Paths Available until April 26, 2018

When you invest in an age-based option, your assets are managed according to the age of your student and your risk tolerance, based on a series of investment portfolios which gradually change over time.

For younger beneficiaries, assets are placed in portfolios that invest in funds with higher concentrations of stocks. As the beneficiary grows and approaches college, the assets are automatically shifted to more conservative funds that invest in bonds and short-term reserves to reduce your exposure to risk before you start making withdrawals.

Currently, PA 529 IP age-based options invest in seven different portfolios which decrease exposure to risk as your beneficiary nears college age.

The new PA 529 IP age-based glide paths will incorporate seven new portfolios to provide a more gradual reduction in market exposure as your beneficiary nears college age. If you are currently invested in any of the age-based options, you do not need to do anything. Please note that this automatic change will not count against your permitted twice per year asset reallocations.

Between April 27 and April 30, 2018, your current IP age-based investments will be automatically transitioned into the new age-based investment portfolios and your future contribution allocations will also be automatically adjusted.

See the charts on the following pages for more details on the current age-based options and new age-based options.

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New PA 529 IP Age-Based Option Glide Paths Effective date April 27, 2018

4 or younger

5 through 6

7 through 8

9 through 10

11 through 12

13 through 14

15 through 16

17 through 18

19 and older

Balanced Income Portfolio*

Interest Accumulation Portfolio

Growth Portfolio



Aggressive Growth Portfolio

Growth Portfolio

*Portfolio available only within a PA 529 IP age-based savings track. Cannot be purchased individually as a stand-alone portfolio.

Blended Growth Portfolio*

Disciplined Growth Portfolio*



Conservative Portfolio*

Blended Income Portfolio*

Moderate Income Portfolio*

Aggressive Portfolio*













50% Bonds50% Stocks

37.5% Bonds62.5% Stocks


75% Bonds25% Stocks



75% Bonds


50% Bonds


25% Bonds

100% Short-term Reserves 25% Short-term

Reserves

75% Bonds


75% Bonds


75% Bonds25% Stocks


50% Bonds50% Stocks


25% Bonds75% Stocks

12.5% Bonds87.5% Stocks 100% Stocks



25% Bonds75% Stocks


50% Bonds50% Stocks


75% Bonds25% Stocks


Portfolios with higher concentrations in bonds and short-term investments tend to be less volatile than those with more stocks. Less volatile portfolios generally may not decline in value as much when markets decline, but also may not appreciate in value as much when markets go up. Investments in bonds are subject to interest rate, credit and inflation risk.

Age of Beneficiary Conservative Option Moderate Option Aggressive Option

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7

How Will These Changes Impact Your PA 529 IP Account?Before the Transition

While these changes may not impact your PA 529 IP account, it is important to be aware of them. If you invest in an age-based option, the age of your beneficiary will determine if your investment portfolio will change.

Likewise, the allocations between stocks and bonds of certain stand-alone portfolios will also be changing.

While these changes are being implemented to provide you with more flexibility, your PA 529 IP account investment option may change to a portfolio with more or less stock exposure.

You may also elect to process up to two investment exchanges per calendar year for 2018. If you elect to make an investment exchange before these changes take effect, you must do so before 4:00pm (EST) on April 26.

Account owners should determine how a change in risk tolerance affects their accounts. For additional assistance, please consult a qualified financial professional.

During the TransitionDuring the time PA 529 implements these changes, PA 529 IP account owners will not be able to access their accounts online or by phone. The implementation period will be 4:00pm (EST) on Thursday, April 26, 2018 through 7:00am (EST) on Monday, April 30, 2018. Account owners that need to access their accounts around the implementation dates should contact PA 529 before 4:00pm (EST) on April 26 at 800-440-4000.

Remember, you may change your future contribution allocations at any time without restriction. If you have an automatic investment plan (AIP) contribution that is scheduled for April 27, your account will be credited with a trade date of April 26. If you have an AIP that is scheduled for April 28 - April 30, or make a one-time electronic bank transfer (EBT) after 10:00pm (EST) on Wednesday, April 25, 2018, through Sunday, April 29, 2018, your account will be credited with a trade date of Monday, April 30, 2018.

PA 529 Investment Plan Transition DatesAPRIL 26Requests for all transactions, including withdrawals, contributions, or exchanges must be made in good order before 4:00pm (EST) on Thursday, April 26, 2018. Requests received in good order after 4:00pm (EST) on Thursday, April 26, 2018 (including any one-time EBTs initiated after 10:00pm (EST) on Wednesday, April 25, 2018), will be processed on Monday, April 30, 2018, using the net asset values of Monday, April 30, 2018.

NOTE: To allow for a successful transition, account owners will not be able to access PA 529 IP accounts during the period of 4:00pm (EST) on April 26, 2018 until 7:00am (EST) on Monday, April 30, 2018.

During this “blackout period,” you will not be able to initiate any account transactions, either online or by phone.

APRIL 27 – APRIL 29PA 529 will:

• Transition assets from the existing age-based portfolios into the new age-based portfolios as described on pages 4 and 5.

• Transition the international equity and bond allocations in the portfolios as described on pages 2 and 3.

• Add the Vanguard Total International Bond Index Portfolio as a stand-alone portfolio as described on page 2.

APRIL 30PA 529 IP account owners may resume account transactions at 7:00am (EST) on Monday, April 30, 2018. Additionally, any recurring contributions scheduled between Saturday, April 28, 2018 and Monday, April 30, 2018, or any contributions received by mail between 4:00pm (EST) on Thursday, April 26, 2018, and Sunday, April 29, 2018, will be credited using net asset values of Monday, April 30, 2018.

More information may be found in the transition dates section below.

Please note that during this transition, you will not be able to complete any transactions, including contributions, withdrawals, and rollovers in your PA 529 IP account.

None of the Portfolios, including the Conservative Income Portfolio’s and Interest Accumulation Portfolio’s investments in the Vanguard Short-Term Reserves Account, are insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

Before you invest, consider whether your or the beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in that state’s qualified tuition program.

The PA 529 IP is sponsored by the Commonwealth of Pennsylvania and administered by the Pennsylvania Treasury Department. Ascensus Recordkeeping Services, LLC, serves as Recordkeeping and Servicing Agent for the Investment Plan. The Vanguard Group, Inc., serves as Investment Manager for the Investment Plan. The Investment Plan’s Portfolios, although they invest in mutual funds, are not mutual funds.

Investment returns are not guaranteed, and you could lose money by investing in the PA 529 IP. Account owners assume all investment risks, including the potential for loss of principal, as well as responsibility for any federal and state tax consequences.

For more information about the PA 529 IP, call 800-440-4000 or visit PA529.com to obtain a Disclosure Statement. Investment objectives, risks, charges, expenses and other important information are included in the Disclosure Statement; read and consider it carefully before investing.

Vanguard and the ship logo are trademarks of The Vanguard Group, Inc. All other marks are the exclusive property of their respective owners.

Pennsylvania offers a second 529 plan, the PA 529 Guaranteed Savings Plan (GSP), which is designed to help savings grow to meet the future cost of education. When used for qualified higher education expenses, PA 529 GSP contributions grow based on tuition inflation (subject to fees and premiums). For more information about the PA 529 GSP, call 800-440-4000 or visit PA529.com to obtain a Disclosure Statement.

© Commonwealth of Pennsylvania

March 2018

STILL HAVE QUESTIONS?Please call the PA 529 College Savings Program at 800-440-4000 or visit PA529.com to learn more.

Portfolio NameTotal Annual

Asset-Based FeeTotal Annual

Asset-Based Fee

Aggressive Growth Portfolio ................................. 0.2450%

Conservative Growth Portfolio .............................. 0.2413%

Conservative Income Portfolio .............................. 0.2525%

Interest Accumulation Portfolio............................. 0.2750%

Total Stock Market Index Portfolio ........................ 0.2250%

Social Index Portfolio ........................................... 0.3250%

Total International Stock Index Portfolio ............... 0.2750%

Total Bond Market Index Portfolio ......................... 0.2450%

Total International Bond Index Portfolio ................ 0.2750%

Short-Term Inflation-Protected

Securities Index Portfolio ..................................... 0.2450% *Portfolio available only within a PA 529 IP age-based saving track. Cannot be purchased individually as a stand-alone portfolio.

Growth Portfolio..............................0.2438%

Moderate Growth Portfolio...............0.2425%

Income Portfolio .............................0.2410%

*Aggressive Portfolio ......................0.2444%

*Blended Growth Portfolio ...............0.2431%

*Disciplined Growth Portfolio ..........0.2419%

*Conservative Portfolio ...................0.2406%

*Blended Income Portfolio...............0.2549%

*Moderate Income Portfolio.............0.2649%

*Balanced Income Portfolio .............0.2750%

Portfolio Name

PA 529 Investment Plan Fee ChartFees effective April 27, 2018

important changes coming to the pa 529 investment plan! · determine if your investment portfolio...

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