Changes in Oregon's 529 Plan

Oregon 529 announced a change from TIAA to BNY Mellon for the State's plan.  BNY Mellon recently joined with Oregon on last year's launch of OregonABLE.  Looks like the beginning of a wonderful partnership.

Here is the FAQ from Oregon 529:

1. What’s changing?

To be able to provide better customer service, a better user experience, more robust investments and innovative technology, the Oregon College Savings Plan will begin working with Sumday Administration, LLC, a wholly-owned subsidiary of BNY Mellon, as its new financial partner.

2. Why are you switching financial partners?

TIAA has been our financial partner for 8 years and it has been a solid and fruitful partnership. Just last year, contributions increased by 14%, qualified withdrawals by 15.2% and new accounts by 12.4% with their help. However, a lot has changed in the industry during that time. There are new tools and technologies out there that Oregonians could benefit from. Switching financial partners will allow us to provide better customer service, more robust investment options and innovative technology.

3. Are my fees increasing?

No. Fees will not increase. Current annual asset-based fees range between .27% and .7% depending on the investment option you choose. You can learn more about our current fees at https://www.oregoncollegesavings.com/research/fees.shtml.

4. What does this mean for me?

This switch will ultimately make it easier for you to save for your higher education goals. What changes will you notice?

• We will be designing a new mobile-friendly and ADA-compliant website. It will be much easier for you to access your account from your phone or tablet.
• We will be building an enhanced online gifting platform that will allow you to create a private webpage you can send to friends and family so they can contribute to your account online.
• We will now be able to offer a variety of investment funds that were previously not available to us.
• We will be switching from an age-based portfolio to a target-date portfolio. Instead of entering a student’s age, you will enter the date you expect them to go to college. If that date changes because they skip a grade or enter the military, you just change the date you expect them to go and the investments will be adjusted. We expect this change will make the plan more accessible for non-traditional students, graduate students and adult learners, as well as families.

5. When is this happening?

The switch will happen during the second half of 2018. We are using historical data to determine which times account use is slowest. We will make sure to avoid the times when account owners have traditionally needed to withdraw funds to pay for tuition. There will be a day or two (over a weekend) when you won’t have access to your account. We will make sure to give you ample notice (at least 30 days) so you can plan accordingly.

6. Do I need to do anything?

You don’t need to do anything at this time. We will give you ample notice (at least 30 days) before you need to do anything.

7. Can I still add money?

Absolutely! A lot of work will be going on behind the scenes, but you shouldn’t notice a difference until it’s time for the switch to take place. Once that happens, you will have a new website and your current investment options will be populated with new investment funds that have the same level of risk as your current ones. Until then, everything is business as usual. Accounts can still be opened, deposits can still be made and withdrawals can still be taken. You don’t need to do anything at this time. We will give you ample notice (at least 30 days) before you need to do anything.

8. Where is my money going with the new investment options?

The investment options you are using will be made up of new investment funds that have the same level of risk as your current ones. In the coming months, the Oregon 529 Savings Board will approve the new investment line-up. We’ll be able to share more information about the investments after that.

9. What if I don’t like the new investment options you put my money in, can I move it? Will that use up one of my twice yearly options to move funds?

When your money is moved into the new investment options, it does not count against one of your two investment allocations for the year. If you want to move your money after the switch has happened, you can use one of your twice yearly transfers.

The Oregon 529 Savings Board will approve the new investment line-up in the coming months. We will be able to share more information on the investments after that.

10. Will I still have access to my money? Will there be any days when I don’t have access to my account/money?

Yes, until we go live, everything will be business as usual on your end. When the switch happens, there will be a day or two (over a weekend) when you won’t have access to your account. We are working to make sure these days are kept at a minimum. We will make sure to give you ample notice (at least 30 days) of when this will occur so that you can plan ahead.

11. I automatically deposit money from my bank account into the Oregon College Savings Plan. Will I have to do something different?

Yes, your contributions will need to be sent using a new routing number to a different bank. We will update you with the information you will need once that is available.

12. I send contributions straight from my paycheck. Does my employer need to do something different?

Yes, your contributions will need to be sent using a new routing number to a different bank. We will update you with the information your employer will need once that is available.

13. Can I keep withdrawing money while this is happening?

Yes! Everything is business as usual until a switch is flipped and the changes go live in the second half of 2018. There will be a day or two (over a weekend) when you won’t have access to your account. We will make the switch during a time when historically, account owners have not been making large withdrawals for college. We will also make sure to give you ample notice of the days you will be unable to make withdrawals so that you can plan accordingly.

14. What will the investments look like?

Until the Oregon 529 Savings Board votes on an investment line-up in the coming months, we don’t know exactly what the line-up will look like. We will update you after a decision has been made.

15. What exactly is a financial partner?

The state of Oregon (through the Oregon Savings Network) works with a financial partner to manage the Oregon College Savings Plan. The financial partner provides administrative services, keeps track of records, protects data and manages investments. The Oregon Savings Network and Oregon 529 Savings Board oversees the financial partners’ work, creates and implements the vision for the plan and provides outreach and education about the plan.

16. Who is Sumday?

Sumday is a wholly-owned subsidiary of BNY Mellon, the oldest bank in the country. They have lots of experience managing 529, ABLE and retirement plans. In fact, Sumday is managing the Oregon ABLE Savings Plan which helps people with disabilities save money without losing their benefits. They’ve led the way in building a mobile-friendly and ADA-compliant website, launching an online live chat feature and offering a prepaid card so users have direct access to their accounts. To see an example of their work, go to www.oregonABLEsavings.com

17. What was the process like for choosing a new financial partner?

We engaged in an open and competitive process to choose a new financial partner. All of the finalists provided very competitive applications. At the end of the day, Sumday blew us away with their passion for and track record of innovation.