Vermont Higher Education Savings Plan

Fees and Expenses

The following table describes the fees and expenses that you pay if you open and contribute to an account in VHEIP.

These fees are directly or indirectly paid out of the assets of your Account. Except for the fees listed below, there are currently no other fees, charges or penalties imposed by or payable to VSAC in connection with opening or maintaining an Account. The Board reserves the right to change the current fees, or to impose new or additional fees, expenses, charges or penalties in the future.

Fee Table

Investment Option Plan Manager Fee(1)(2)  Estimated Underlying Mutual Fund Expenses(3) VSAC  Fee(4) Total Annual Asset-Based Fees (5)
Managed Allocation(6)
Age Band 1 (0-3 Years)
 0.34% 0.19% None 0.53%
Age Band 2 (4-7 Years)
 0.30% 0.23% None 0.53%
Age Band 3 (8-11 Years)
 0.28% 0.25% None 0.53%
Age Band 4 (12-14 Years)
 0.26% 0.27% None 0.53%
Age Band 5 (15-17 Years)
 0.27% 0.26% None 0.53%
Age Band 6 (18 and Over)
 0.30% 0.23% None 0.53%
 
Diversified Equity Option
(strategy and name change
effective 11/30/09)(7)
 
 0.45% 0.46% None 0.91%
 
Equity Index Option
 
 0.45% 0.10% None 0.55%
 
Balanced Option
 
 0.45% 0.27% None 0.72%
 
Fixed Income Option
 
 0.45% 0.35% None 0.80%
 

Principal Plus
Interest Option
(strategy and name change
effective 11/30/09)(8)

 
 None None None None
 

(1) The Plan Manager Fee is the only fee deducted from Plan assets.  This fee may change at any time.  Although no fees are deducted from your Account, when you invest in the Plan, you indirectly bear a pro rata portion of the Plan expenses because when fees are deducted from Plan assets, the value of the Plan Units is reduced
(2) Each Investment Option (with the exception of the Principal Plus Interest Option) pays TFI an annualized Plan Manager Fee equal to the stated percentage of the average daily net assets held by that Investment Option.  However, for the Managed Allocation Option, the percentages listed in this column may fluctuate because generally, if the underlying Fund expenses increase, then the Plan Manager Fee decreases.
(3) For each Investment Option (with the exception of the Principal Plus Interest Option), the figures in this column are based on a weighted average of the expenses of each underlying Fund's expense ratio as of February 1, 2009, in accordance with the Investment Option's asset allocation among its underlying Funds.  Each Investment Option (with the exception of the Principal Plus Interest Option) indirectly bears its pro rata portion of the underlying Funds' expenses because when fees are deducted from an underlying Fund's assets, the value of the underlying Fund's shares is reduced.
(4) No fee is charged to any Account by VSAC or the Plan.  See "Oversight of the Plan" for a description of the administrative fee paid by the Plan Manager to VSAC.
(5) The Total Annual Asset-Based Fees ("Total Fees") equal the Estimated Underlying Fund Expenses plus the Plan Manager Fee.  The portion of Total Fees attributable to the Plan Manager Fee is assessed on a daily basis over the course of the year against assets in each Investment Option (with the exception of the Principal Plus Interest Option).  The portion of Total Fees attributable to Estimated Underlying Fund Expenses is indirectly borne by each Investment Option as discussed in footnote (3).  You should refer to the Investment Cost Example for the total assumed investment cost over 1-, 3-, 5-, and 10-year periods.
(6) When the total assets in the Plan become equal to or greater than $150 million, the Total Fees for the Managed Allocation Option will be reduced by 0.03% (3 basis points).  When total assets in the Plan become equal to or greater than $225 million, the Total Fees for the Managed Allocation Option will be reduced by an additional 0.05% (5 basis points) for a total reduction of 0.08% (8 basis points).
(7) Prior to November 30, 2009, the Total Fees for the Diversified Equity Option (called the 100% Equity Option until November 30, 2009) are 0.80%.  Of this amount, 0.42% is the Plan Manager Fee and 0.38% is the Estimated Underlying Mutual Fund Expenses.
(8) The Principal Plus Interest Option (called the Interest Income Option until November 30, 2009) does not pay a Plan Manager Fee.  As of November 30, 2009, TFI will, however, receive from TIAA-CREF Life, the issuer of the Funding Agreement, an annual asset based fee to pay TFI for distribution, administration, and other services that TFI will provide for this Investment Option.  TIAA-CREF Life may discontinue this fee at any time.


Investment Cost Example

The example in the following table is intended to help you compare the cost of investing in the different Investment Options over various periods of time. This hypothetical example assumes that:

  • You invest $10,000 in an account for the time periods shown below.
  • Your investment has a 5 percent compounded return each year.
  • You withdraw the assets from your Account at the end of the specified periods for Qualified Higher Education Expenses.
  • Total annual asset-based fees remain the same as shown in the Fee Table above.
  • The example does not consider the impact of any potential state or federal taxes on the redemption.


Although your actual costs may be higher or lower, based on the above assumptions your costs would be:

INVESTMENT OPTIONS APPROXIMATE COST OF
$10,000 INVESTMENT
     1  Year    3 Years    5 Years    10 Years
Managed Allocation Option
Age Band 1
(0-3 Years)
 $54 $170 $297 $666
Age Band 2
(4-7 Years)
 $54 $170 $297 $666
Age Band 3
(8-11 Years)
 $54 $170 $297 $666
Age Band 4
(12-14 Years)
 $54 $170 $297 $666
Age Band 5
(15-17 Years)
 $54 $170 $297 $666
Age Band 6
(18 and Over)
 $54 $170 $297 $666
 
Diversified Equity Option
(effective 11/30/09)
 
 $91 $285 $495 $1100
 
Equity Index Option
 
 $54 $170 $297 $666
 
Balanced Option
 
 $72 $225 $391 $873
 
Fixed-Income Option
 
 $80 $250 $435 $969
 
Principal Plus Interest Option
(effective 11/30/09)
 
 $0 $0 $0 $0



Additional Fees
The table below provides information concerning additional fees and expenses deducted from each account/paid directly by the Account Owner.


   Percent   Dollars 
Application Fee
  0% $0
 
Cancellation Fee
  0% $0
 
Change in Beneficiary Fee
  0% $0
 
Change in Investment Options
  0% $0
 
Other Charges as applicable
  0% $0
 

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The tax information contained on the Vermont Higher Education Investment Plan (the Plan) Web site is not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding tax penalties that may be imposed on the taxpayer. It was written to support the promotion of the products and services addressed in the Web site. Taxpayers should seek advice based on their own particular circumstances from an independent tax advisor.

The Plan is administered by the Vermont Student Assistance Corp. (VSAC). TIAA-CREF Tuition Financing, Inc. (TFI) serves as Plan Manager.

The investment approaches described are not recommendations and do not take into consideration personal goals or preferences. After evaluating information you consider important in making an investment choice, the ultimate decision is up to you. It is a good idea to revisit your investment strategy periodically as your goals, personal financial situation, and market conditions change.

Consider the investment objectives, risks, charges and expenses before investing in the Plan. Please call toll-free 1-800-637-5860 for a Disclosure Booklet containing this information. Read it carefully.

Before investing in a 529 plan, you should consider whether the state you or your designated beneficiary reside in or have taxable income in has a 529 plan that offers favorable state income tax or other benefits that are only available if you invest in that state's 529 plan.

The State of Vermont, its agencies, VSAC, TIAA-CREF Tuition Financing, Inc., Teachers Insurance and Annuity Association of America and its affiliates do not insure any Account or guarantee its principal or investment return. Account value will fluctuate based upon a number of factors, including general market conditions.

The Plan Web site is for informational purposes only, and does not constitute an offer to sell or solicitation of an offer to buy any security that may be referenced on the site. Such offer or solicitation can be made only through the Disclosure Booklet.

The Plan Web site contains links to other Web sites. Neither the Plan nor TFI and its affiliates are responsible for the content of those other Web sites. The accuracy of information on those sites cannot be confirmed.

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© 2010 TIAA-CREF Tuition Financing Inc.
Vermont Student Assistance Corp.