The Vermont Higher Education Investment Plan offers you the choice of six investment portfolios. These options vary in their investment strategy and degree of risk, allowing you to select which portfolio or combination of portfolios is best for your needs.
See the Disclosure Booklet for more information about which investments are appropriate for different types of investors.
(Risk Level Shifts from Aggressive to Conservative)
The Managed Allocation Portfolio seeks to match up the investment objective and level of risk to the investment horizon by taking into account the beneficiary’s current age and the number of years before the beneficiary turns 18 and is expected to enter college. Depending on the beneficiary’s age, allocations to this investment portfolio will be placed in one of six age bands, each of which has a different investment objective and investment strategy. The age bands for younger beneficiaries seek a favorable long-term return by investing primarily in mutual funds that invest primarily in equity securities, each of which has a high level of risk, but greater potential for returns than more conservative investments. As a beneficiary nears college age, the age bands allocate less to mutual funds that invest in equity securities and allocate more to mutual funds that invest in fixed-income and money market securities.
As the beneficiary ages, assets in your account that are attributable to this investment portfolio are moved from one age band to the next promptly following the beneficiary’s birthday at ages 2, 4, 6, 8, 10, 12, 14, 15, 16, 17 and 18.
Asset Allocations for the Managed Allocation Portfolio
The following table provides the percentage allocation to each mutual fund within the Managed Allocation Portfolio for each age band.
(Risk Level — Aggressive)
The Diversified Equity Portfolio seeks to provide a favorable long-term total return, mainly through capital appreciation and some investment income. This investment portfolio attempts to achieve its objective by allocating assets to mutual funds of various asset classes, including mutual funds that invest in equity securities of larger, well-established companies that offer a growing stream of dividend income, medium-sized and smaller companies, companies engaged in the real estate industry, and companies located outside the United States, including in emerging markets.
Asset Allocations for the Diversified Equity Portfolio
The following table provides the percentage allocation to each mutual fund within the Diversified Equity Portfolio.
|TIAA-CREF Large-Cap Value Index Fund||TIAA-CREF Large-Cap Growth Index Fund||Vanguard Mid-Cap Index Fund||Vanguard Small-Cap Index Fund||Vanguard REIT Index Fund||TIAA-CREF International Equity Index Fund||Vanguard Emerging Markets Stock Index Fund|
|15.0% – 23.0%||16.0% – 24.0%||7.0% – 11.0%||3.0% – 5.0%||6.0% – 10.0%||26.0% – 40.0%||6.0% – 8.0%|
(Risk Level — Aggressive)
The Equity Index Portfolio seeks to provide a favorable long-term total return, mainly from capital appreciation, by investing in equity index funds. This investment portfolio has a high exposure to domestic and foreign equities.
Asset Allocations for the Equity Index Portfolio
The following table provides the percentage allocation to each mutual fund within the Equity Index Portfolio.
|Vanguard Total Stock Market Index Fund||TIAA-CREF International Equity Index Fund||Vanguard Emerging Markets Stock Index Fund|
|48.0% – 72.0%||26.0% – 40.0%||6.0% – 8.0%|
(Risk Level — Moderate)
This Balanced Portfolio seeks to provide favorable returns that reflect the broad investment performance of the financial markets through capital appreciation and investment income by allocating assets to a balanced combination of equity and fixed-income mutual funds. (At this time, approximately 61% is allocated to equity funds and 39% is allocated to fixed-income funds.)
Asset Allocations for the Balanced Portfolio
The following table provides the percentage allocation to each mutual fund within the Balanced Portfolio.
|Vanguard 500 Index Fund||Vanguard Mid-Cap Index Fund||Vanguard Small-Cap Index Fund||Vanguard REIT Index Fund||TIAA-CREF International Equity Index Fund||Vanguard Emerging Markets Stock Index Fund||Vanguard Total Bond Market Index Fund||DFA Inflation Protected Securities Portfolio||Vanguard Short-Term Bond Index Fund||Vanguard High-Yield Corporate Fund||Vanguard Total International Bond Index Fund|
|19.0% – 29.0%||3.0% – 5.0%||2.0% – 4.0%||4.0% – 6.0%||17.0% – 25.0%||3.0% – 5.0%||16.0% – 24.0%||5.0% – 7.0%||4.0% – 6.0%||4.0% – 6.0%||2.0% – 4.0%|
(Risk Level — Moderate)
The Fixed Income Portfolio seeks to provide preservation of capital along with a moderate rate of return through a diversified mix of fixed-income mutual funds.
Asset Allocations for the Fixed Income Portfolio
The following table provides the percentage of assets of the Fixed Income Portfolio allocated to each mutual fund.
|Vanguard Total Bond Market Index Fund||DFA Inflation Protected Securities Portfolio||Vanguard Short-Term Bond Index Fund||Vanguard High-Yield Corporate Fund||Vanguard Total International Bond Index Fund|
|36.0% – 54.0%||12.0% – 18.0%||12.0% – 18.0%||12.0% – 18.0%||8.0% – 12.0%|
The Principal Plus Interest Option seeks to preserve capital and provide a stable return. 100% of the assets of this Portfolio are allocated to a Funding Agreement issued by the TIAA-CREF Life Insurance Company. This Portfolio bears all of the risks of its underlying investment in the Funding Agreement. See Appendix I of the Disclosure Booklet for a summary of the Funding Agreement, including principal investment risks.
The total annual fees for any option in the plan are 0.39% of the assets. You do not pay these fees separately and 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 as fees are deducted from plan assets, the value of the plan units is reduced.
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 example assumes that:
Your actual costs may be higher or lower. Based on the above assumptions, your costs would be:
Annual Print/Mail Fee for Paper Delivery. Beginning April 2017, the plan manager will begin charging a $10 annual account print/mail fee to account owners who have not elected to receive official plan documents via electronic delivery. The fee will be deducted as $0.83 per account on or about the 20th day of each month and will be waived if the account’s available balance is less than $25 at the time of assessment. This fee will not be charged for tax documents delivered via U.S. mail. Account owners can avoid the fee by signing up for electronic delivery of official plan documents. Signing up for electronic delivery is as easy as going to www.vheip.org, logging into your account and selecting electronic delivery in the Profile section. New applicants who enroll via a paper account enrollment form will be given a 30-day grace period from the date their account is created to establish their delivery preferences online prior to incurring this fee.
In the event that an account owner has elected electronic delivery for official plan documents and fails to provide a valid email address, the plan manager will send paper documents to the account owner and charge the $10 annual print/mail fee as applicable.
Fees for Additional Services. The plan manager may debit your account for costs incurred in connection with failed contributions (e.g., returned checks, rejected AIPs, rejected EFTs) or for additional services you request (e.g., overnight delivery, outgoing wires, re-issue of disbursement checks, requests for historical statements, and rollovers).
Reflects current allocations for all investment options. Allocations are reviewed and adjusted periodically.
Account values are not guaranteed and will fluctuate with market conditions. For a complete discussion of risks associate with each investment option, please refer to the Disclosure Booklet.
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Contributions by check should be accompanied by a completed Additional Contribution by Mail Form or should include reference the VHEIP account number(s) to which the contribution should be applied.×
As Vermont’s official 529 college savings plan, VHEIP is the only 529 plan that qualifies for a Vermont state income tax credit.
A qualifying family member includes any siblings or step-siblings, natural or legally adopted children, stepchildren, parents or ancestors of parents, step-parents, first cousins, nieces or nephews, and aunts or uncles. In addition, the spouse of the beneficiary or the spouse of any of those listed above also qualifies as a family member of the beneficiary.×
Qualified higher education expenses include tuition, fees, and the cost of books, supplies, and equipment required for the enrollment and attendance of the beneficiary at an eligible educational institution, and certain room and board expenses. Qualified higher education expenses also include certain additional enrollment and attendant costs of a beneficiary who is a special needs beneficiary in connection with the beneficiary’s enrollment or attendance at an eligible institution. For this purpose, an eligible educational institution generally includes accredited postsecondary educational institutions offering credit toward a bachelor’s degree, an associate’s degree, a graduate-level degree or professional degree, or another recognized postsecondary credential.×
A non-qualified withdrawal is any withdrawal that does not meet the requirements of being: (1) a qualified withdrawal; (2) a taxable withdrawal; or (3) a rollover. The earnings portion of a non-qualified withdrawal may be subject to federal income taxation, and the additional tax. Recapture provisions apply. See the Disclosure Booklet for details.×
Eligible education institutions are accredited, post-secondary educational institutions offering credit towards a bachelor’s degree, an associate’s degree, a graduate level or professional degree, or another recognized post-secondary credential. Use the Federal School Code Search on the Free Application for Federal Student Aid (FAFSA) website or contact your school to determine if it qualifies as an eligible educational institution. 529 Plan assets can also be used at some accredited foreign schools. If you have a question, contact your school to determine if it qualifies.×
The federal tax act of 2017, signed into law in December 2017, includes provisions related to 529 plan accounts, beginning with the 2018 tax year:
VSAC, as administrator of the Vermont 529 plan, will provide information as details about the Vermont income tax effects are clarified. We encourage you to consult a qualified tax advisor or the Vermont Department of Taxes at tax.vermont.gov concerning federal and state tax implications for tax years 2018 and beyond, and to save documentation for how all VT 529 fund withdrawals are used.×
Simply login to your account and navigate to Upload Documents, located under the Documents tab.