Program Description Utah’s Official Nonprofit 529 College ... · PDF fileUtah’s...

UESP NAME CHANGEDescriptionThe Utah Educational Savings Plan (UESP) has received a Certificate of Registration from the State of Utah Department of Commerce to do business under the name of my529. Effective February 5, 2018, the UESP is doing business as my529. Note: All references to UESP in this Supplement going forward have been changed to my529. Use the following to replace all references in the July 14, 2017, Program Description to “Utah Educational Savings Plan,” “UESP,” “uesp.org,” and “[email protected].”• my529• my529.org• [email protected]

MY529 HOURS OF OPERATION HAVE BEEN EXTENDED TWO HOURS

Descriptionmy529’s hours of operation are Monday through Friday, 7 a.m. to 6 p.m. Hand-delivered forms and contributions must be received at my529 offices by 5 p.m. MT.Use the following to replace all references in the July 14, 2017, Program Description to “8:00 a.m.–5:00 p.m., Mountain Time,” “8 a.m. to 5 p.m. MT,” “before 5 p.m. MT,” and “before 5 p.m. Mountain Time.”• 7 a.m. to 6 p.m. MT• before 6 p.m. MT

Program Description800.418.2551 | uesp.orgUtah’s Official Nonprofit 529 College Savings Program

Read this Supplement in conjunction with the July 14, 2017, UESP Program Description. Please read all documents carefully and keep them for future use. This Supplement contains new information about:

UESP Name Change ................................................................. 1my529 Hours of Operation Have Been Extended Two Hours ............................................... 1Increase in Federal Gift Tax Exclusion for 529 Plan ............................................................... 2Change in Maximum Aggregate Account Balance ..................... 32018 Contribution Amounts Eligible for Utah Tax Benefits......3-5Change in Year-End Tax Deadlines ........................................5-6Annual Withdrawal Limits for K-12 Tuition Expenses .......................................................6-7Operating Expense Ratios Lowered, Prospectus Dates Changed for Two Underlying Investments ....................... 7Rollovers of Funds from a my529 Account to an Able Account ..................................................................7-8

UESP (my529) Contact InformationMailing address PO Box 145100, Salt Lake City, UT 84114

Toll-free telephone 800.418.2551

Website uesp.org (my529.org)

Hours of operation 7 a.m.–6 p.m. MT

Hand-delivered forms and contributions must be received at my529 offices by 5 p.m. MT

Days of operation Monday–Friday (closed federal, State of Utah, and Utah State Board of Regents holidays)

800.418.2551

1

SUPPLEMENTFebruary 5, 2018, Supplement to the July 14, 2017, Program Description

February 5, 2018, Supplement to the July 14, 2017, Program Description

2 800.418.2551 | my529.orgPO Box 145100, Salt Lake City, Utah 84114-5100

INCREASE IN FEDERAL GIFT TAX EXCLUSION FOR 529 PLANS

DescriptionEffective January 1, 2018, the IRS special gift provision for 529 plans that allows a person to elect to contribute up to five times the annual gift tax exclusion to a single beneficiary increased from $70,000 ($140,000 if married filing jointly) to $75,000 ($150,000 if married filing jointly). Use the following to replace the information on page 49 of the July, 14, 2017, Program Description, Part 9 | Tax Considerations, Federal Tax Considerations subsection, Estate and Gift Tax Considerations subsection, second paragraph:

A special provision for 529 plans allows a person to make a gift of $75,000 ($150,000 if married filing jointly) to a single beneficiary without creating a taxable gift if the person makes an election on IRS Form 709 to treat the entire gift as a series of five equal annual gifts. This means that a $75,000 five-year averaging election counts as a series of five $15,000 contributions, and a $150,000 five-year averaging joint election counts as a series of five $30,000 contributions. The account owner/agent cannot make any additional gifts to that beneficiary during the five-year period without being subject to federal gift tax rules.

Use the following to replace the information on page 50 of the July 14, 2017, Program Description, Part 9 | Tax Considerations, Federal Tax Considerations subsection, Estate and Gift Tax Considerations subsection, Supplemental Contributions Due to Exclusion Increases subsection, heading, all paragraphs and tables:

Supplemental Contributions Due to Exclusion IncreasesIf the IRS increases the annual gift tax exclusion, a person who took advantage of the five-year averaging election in a previous year is allowed to make an additional gift to the same beneficiary in each of the remaining years of the five-year election, beginning with the year that the gift tax exclusion increased.For example, in 2018, the annual gift tax exclusion increased from $14,000 to $15,000 per individual taxpayer, a difference of $1,000. A person who files an individual tax return can make a $1,000 supplemental contribution in each year that remains

in his or her five-year election period, beginning with the year that the gift tax exclusion increased. The following table provides an example of how to make supplemental contributions.

Year 1(2017)

Year 2(2018)

Year 3(2019)

Year 4(2020)

Year 5(2021)

Initial Contribution

$70,000

Averaged Gift $14,000 $14,000 $14,000 $14,000 $14,000Additional Contributions

$1,000 $1,000 $1,000 $1,000

Account owners who file joint tax returns can also make supplemental contributions. For example, for a couple who files a joint tax return, the annual gift tax exclusion increased in 2018 from $28,000 to $30,000 for that person and his or her spouse, a difference of $2,000. That person can make a $2,000 supplemental contribution to the same beneficiary each year that is left in the five-year election period, beginning with the year that the gift tax exclusion increased. The following table illustrates how to make supplemental contributions.

Year 1(2017)

Year 2(2018)

Year 3(2019)

Year 4(2020)

Year 5(2021)

Initial Contribution

$140,000

Averaged Gift $28,000 $28,000 $28,000 $28,000 $28,000Additional Contributions

$2,000 $2,000 $2,000 $2,000

Federal gift tax and generation-skipping transfer tax consequences are possible if an account is rolled over or transferred to a new beneficiary who is not a “member of the family” of the current beneficiary or who is in a younger generation than the current beneficiary.These federal tax provisions are complex, and you should consult a tax advisor regarding how estate, gift, and generation-skipping transfer taxes apply to your particular situation.

Use the following to replace the information on page 63 of the July 14, 2017, Program Description, Summary of Rules, Dollar Amounts subsection, Maximum Gift without Incurring Federal Gift Tax subsection:

A person can contribute $15,000 ($30,000 if filing jointly) each year for the benefit of one beneficiary without incurring gift tax liability, or up to $75,000 ($150,000 if filing jointly) in one year if a five-year election is made.


3PO Box 145100, Salt Lake City, Utah 84114-5100 800.418.2551 | my529.org

CHANGE IN MAXIMUM AGGREGATE ACCOUNT BALANCE

DescriptionOn January 1, 2018, my529 increased the allowed maximum aggregate balance for a single beneficiary from $430,000 to $446,000.Use the following to replace the information on page v of the July 14, 2017, Program Description, Summary of Plan Features, Contributions and Account Balances subsection, fourth bullet:• my529 will accept contributions for a beneficiary until all

account balances for that beneficiary total $446,000.Use the following to replace the information on page 14 of the July 14, 2017, Program Description, Part 4 | Contributions, Before Contributing subsection, Maximum Aggregate Account Balance subsection, first paragraph:

Section 529 requires my529 to set a limit on the maximum aggregate account balance for a single beneficiary. my529’s current limit is $446,000, which reflects the maximum estimated qualified higher education expenses of an undergraduate and graduate degree, including room and board.

Use the following to replace the information on page 14 of the July 14, 2017, Program Description, Part 4 | Contributions, Before Contributing subsection, Maximum Aggregate Account Balance subsection, third paragraph:

my529 will accept contributions for a beneficiary until all my529 account balances for that beneficiary reach $446,000. It is possible that balances may exceed $446,000 because of market performance. Contributions or portions of contributions that exceed this maximum will be returned to the contributor.

Use the following to replace the information on page 63 of the July 14, 2017, Program Description, Summary of Rules, Dollar Amounts subsection, Maximum Aggregate Account Balances subsection:

my529 will accept contributions for a beneficiary until all my529 account balances for that beneficiary reach $446,000.

2018 CONTRIBUTION AMOUNTS ELIGIBLE FOR UTAH TAX BENEFITS

DescriptionThe maximum contribution to a my529 account that qualifies for a Utah state income tax credit or deduction was raised, effective January 1, 2018. The 2018 maximum contribution for individuals, trusts, and corporations is $1,960 per qualified beneficiary. The maximum contribution for married couples filing a joint return, and for trusts whose grantor filing status is married and filing jointly, is $3,920 per qualified beneficiary.Use the following to replace information on page vi of the July 14, 2017, Program Description, Summary of Plan Features, Tax Advantages subsection, Utah State Income Tax Benefits subsection, fourth, fifth, and sixth bullets:

• Individuals. For the 2018 tax year, Utah taxpayers filing an individual tax return can claim a 5 percent Utah state income tax credit for contributions up to $1,960 per qualified beneficiary. Utah taxpayers who are married and filing a joint return can claim a 5 percent Utah tax credit for contributions up to $3,920 per qualified beneficiary.

• Trusts. For the 2018 tax year, Utah-based trusts can claim a 5 percent Utah state income tax credit for contributions up to $1,960 per qualified beneficiary. Utah-based grantor trusts whose grantor filing status is married and filing jointly can claim a 5 percent Utah state income tax credit for contributions up to $3,920 per qualified beneficiary.

• Corporations. For the 2018 tax year, Utah-based corporations are eligible for a Utah state income tax deduction for contributions up to $1,960 per qualified beneficiary.

Use the following to replace information on page 51 of the July 14, 2017, Program Description, Part 9 | Tax Considerations, State Tax Considerations subsection, Utah Individuals subsection, Single Tax Return heading, single paragraph:

Single Tax ReturnFor the 2018 tax year, Utah taxpayers filing a single individual, head of household, married filing separately, or qualifying widow(er) tax return can claim a 5 percent Utah state income tax credit per qualified beneficiary for contributions up to $1,960.



Use the following to replace information on page 51 of the July 14, 2017, Program Description, Part 9 | Tax Considerations, State Tax Considerations subsection, Utah Individuals subsection, Joint Tax Return heading, first paragraph:

Joint Tax ReturnFor the 2018 tax year, Utah taxpayers who are married and filing a joint tax return can claim a 5 percent Utah state income tax credit per qualified beneficiary for contributions up to $3,920.

Use the following to replace the table on page 51 of the July 14, 2017, Program Description, Part 9 | Tax Considerations, State Tax Considerations subsections, Utah Individuals subsection:

Tax Filermy529

Account Type

2018 Maximum Allowable Contribution for a Utah State Income

Tax Credit

2018 Maximum Utah State Income

Tax Credit per Beneficiary (5%)

Single Individual $1,960 $98Joint Individual $3,920 $196

Use the following to replace the Utah State Income Tax Credit Example heading, text, and table on page 51 of the July 14, 2017, Program Description, Part 9 | Tax Considerations, State Tax Considerations subsection, Utah Individuals subsection:

Utah State Income Tax Credit Example The table below illustrates the impact of contributions and the Utah state income tax credit for a joint income tax return.

2018 ContributionsTax Credit

Percentage2018 Utah State Income

Tax Credit

$0-$3,919.99 x 5% = Product of contributionmultiplied by 5%

$3,920.00 x 5% = $196

$3,920.00 x 5% = $196 + amounts over x $3,920.00

0% = $0$196

Use the following to replace the Utah Trusts heading, text, and table on page 52 of the July 14, 2017, Program Description, Part 9 | Tax Considerations, State Tax Considerations subsection, Utah Trusts subsection:

Utah TrustsFor the 2018 tax year, Utah-based trusts can claim a 5 percent Utah state income tax credit for contributions up to $1,960 per qualified beneficiary. Utah-based grantor trusts whose grantor filing status is married

and filing jointly can claim a 5 percent Utah state income tax credit for contributions up to $3,920 per qualified beneficiary.

Tax Filermy529

Account Type


Tax Credit



Trusts Institutional $1,960 $98Grantor Trust, Married Filing Jointly

Institutional $3,920 $196

Use the following to replace the Utah Corporations heading, text, and table on page 52 of the July 14, 2017, Program Description, Part 9 | Tax Considerations, State Tax Considerations subsection, Utah Corporations subsection:

Utah CorporationsFor the 2018 tax year, Utah-based corporations can claim a Utah state income tax deduction for contributions up to $1,960 per qualified beneficiary.

Tax Filermy529

Account Type


Tax Deduction

2018 Maximum Utah State Income Tax Deduction per

BeneficiaryCorporation Institutional $1,960 $1,960

Use the following to replace the information on page 63 of the July 14, 2017, Program Description, Summary of Rules, Dollar Amounts subsection, Utah State Income Tax Credit/Deduction subsection, headings, and second, third, and fourth paragraphs:

Utah IndividualsFor the 2018 tax year, Utah taxpayers filing an individual tax return can claim a 5 percent Utah state income tax credit per qualified beneficiary for contributions up to $1,960. Utah taxpayers who are married and filing a joint tax return can claim a 5 percent Utah state income tax credit per qualified beneficiary for contributions up to $3,920.Utah TrustsFor the 2018 tax year, Utah-based trusts can claim a 5 percent Utah state income tax credit for contributions up to $1,960 per qualified beneficiary. Utah-based grantor trusts whose grantor filing status is married and filing jointly can claim a 5 percent Utah state income tax credit for contributions up to $3,920 per qualified beneficiary.



Utah CorporationsFor the 2018 tax year, Utah-based corporations can claim a Utah state income tax deduction for contributions up to $1,960 per qualified beneficiary.

CHANGE IN YEAR-END TAX DEADLINES

DescriptionThe year-end tax deadlines applicable for the 2018 tax year have changed from those provided for the 2017 tax year. Use the following to replace the information on page vi of the July 14, 2017, Program Description, Summary of Plan Features, Year-End Deadlines subsection, single bullet:• For mailed Account Agreements, contributions, or

withdrawals to be processed for the 2018 tax year, they must be received in good order by my529 before 6 p.m. MT, Monday, December 31, 2018. Online Account Agreements, contributions, or qualified withdrawal requests must be received in good order by my529 before 11:59 p.m. MT, Monday, December 31, 2018. Contributions or withdrawal requests postmarked or initiated in 2018 but received in 2019 will be considered contributions or withdrawals for the 2019 tax year.

Use the following to replace the information on page 17 of the July 14, 2017, Program Description, Part 4 | Contributions, 2017 Year-End Contributions Deadlines subsection, heading and first paragraph:

2018 Year-End Contribution DeadlinesSee 2018 Year-End Deadlines on page 60. Any contribution received after these deadlines will not be eligible for the Utah state income tax credit or deduction

for tax year 2018. A mailed contribution postmarked in 2018, but received by my529 in 2019, will not count as a contribution for 2018 and will be recorded as a 2019 tax-year contribution.

Use the following to replace the information on page 26 of the July 14, 2017, Program Description, Part 6 | Withdrawals, 2017 Year-End Withdrawal Deadlines subsection, heading and first paragraph:

2018 Year-End Withdrawal DeadlinesSee 2018 Year-End Deadlines on page 60. An online electronic withdrawal request received by my529 in good order by 11:59 p.m. MT, on December 31, 2018, will count as a withdrawal for that year even though it may not be processed until the following year.

Use the following to replace the information on page 26 of the July 14, 2017, Program Description, Part 6 | Withdrawals, 2017 Year-End Withdrawal Deadlines subsection, fourth paragraph:

A mailed withdrawal request postmarked in 2018 but received by my529 in 2019 will be recorded as a 2019 tax-year withdrawal.

Use the following to replace the information on page 64 of the July 14, 2017, Program Description, Summary of Rules, Year-End Deadlines subsection, Utah State Income Tax Credit/Deduction subsection:

For contributions to count toward the Utah state income tax credit or deduction, contributions to Utah taxpayers’ accounts must be received online before 11:59 p.m. MT, Monday, December 31, 2018, or received in the my529 office before 6 p.m. MT, Monday, December 31, 2018. Hand-delivered forms and contributions must be received at my529 offices by 5 p.m. MT.



ANNUAL WITHDRAWAL LIMITS FOR K-12 TUITION EXPENSES

DescriptionEffective January 1, 2018, qualified withdrawals from my529 accounts include withdrawals used to pay Kindergarten through 12th grade (K-12) tuition expenses at a public, private, or religious school. Such withdrawals cannot exceed a total of $10,000 per year per beneficiary from all 529 accounts (regardless of who owns the account).On page i of the July 14, 2017, Program Description, Program Description section, UESP—A 529 Plan subsection, add the following second paragraph:

Effective January 1, 2018, kindergarten through 12th grade (K-12) tuition expenses are qualified higher education expenses. Withdrawals for K-12 tuition expenses cannot exceed a total of $10,000 per year per

beneficiary from all 529 accounts (regardless of who owns the account).

On page iii of the July 14, 2017, Program Description, Key Terms, Qualified Higher Education Expenses definition, add a fifth bullet point.• Kindergarten through 12th grade (K-12) tuition expenses

at a public, private, or religious school. Withdrawals for K-12 tuition expenses cannot exceed a total of $10,000 per year per beneficiary from all 529 accounts (regardless of who owns the account).

On page v of the July 14, 2017, Program Description, Summary of Plan Features, Qualified Withdrawals subsection, add a fourth bullet point.• K-12 tuition expenses at a public, private, or religious

school. Withdrawals for K-12 tuition expenses cannot exceed a total of $10,000 per year per beneficiary from all 529 accounts (regardless of who owns the account).

Online Process DeadlineMust be received by my529 before 11:59 p.m. MT

Manual Process Deadline1

Must be received by my529 before 6 p.m. MT. Hand deliveries at my529 offices by 5 p.m. MT.

Contributions Monday, December 31, 2018 Monday, December 31, 2018

New Accounts Monday, December 31, 2018 Monday, December 31, 2018

Withdrawals Monday, December 31, 2018 Monday, December 31, 2018

Investment Option Change Monday, December 31, 2018 Monday, December 31, 2018

Incoming Rollovers (money received) N/A Monday, December 31, 2018

Transfers (between accounts with the same account owner) Monday, December 31, 2018 Monday, December 31, 2018

Transfers (between accounts with different account owners) N/A Monday, December 31, 2018

Outgoing Rollovers N/A Friday, December 14, 2018

Note1Paper forms and incoming faxes are considered manual submissions and must meet the deadlines for the manual process. Hand-delivered forms and contributions must be received at my529 offices by 5 p.m. MT. Faxes must be received by 6 p.m. MT. A mailed contribution postmarked on or before the December 31, 2018, deadline but received in 2019 will be recorded as a 2019 tax-year contribution.

Use the following to replace the information on page 60 of the July 14, 2017, Program Description, 2017 Year-End Deadlines, heading, text, table, and note:

2018 Year-End DeadlinesTo qualify for tax year 2018, account transactions must meet the following deadlines. All documents must be received by my529 in good order to be processed.

Note: my529 does not guarantee that a transaction received on the last day my529 conducts business for that year will be completed on that day.



On page 23 of the July 14, 2017, Program Description, Part 6 | Withdrawals, Withdrawing Funds subsection, Eligible Payees subsection, insert the following paragraph between the third and fourth paragraphs:

Withdrawals to pay for K-12 tuition expenses will be distributed only to the account owner.

On page 25 of the July 14, 2017, Program Description, Part 6 | Withdrawals, Qualified Withdrawal subsection, Qualified Higher Education Expenses subsection, add a fifth bullet:• K-12 tuition expenses at a public, private, or religious

school. Withdrawals for K-12 tuition expenses cannot exceed a total of $10,000 per year per beneficiary from all 529 accounts (regardless of who owns the account).

On page 25 of the July 14, 2017, Program Description, Part 6 | Withdrawals, Qualified Withdrawals subsection, Eligible Educational Institutions subsection, add the following fourth paragraph:

my529 distributes withdrawals to pay for K-12 tuition expenses only to the account owner.

OPERATING EXPENSE RATIOS LOWERED, PROSPECTUS DATES CHANGED FOR TWO UNDERLYING INVESTMENTS

DescriptionOperating Expense Ratios were lowered and prospectus dates were changed for Vanguard FTSE Social Index Fund (VFTSX) and Vanguard International Growth Fund (VWILX).Use the following to replace information in the table on page 45 of the July 14, 2017, Program Description, Part 8 | Expenses and Fees, Operating Expense Ratios of the Underlying Funds subsection, FTSE Social Index Fund and International Growth Fund entries:

Ticker Symbol

Total Operating Expense Ratio Prospectus Date

Vanguard FundsFTSE Social Index Fund

VFTSX 0.20% December 21, 2017

International Growth Fund1, 2

VWILX 0.32% December 21, 2017

ROLLOVERS OF FUNDS FROM A MY529 ACCOUNT TO AN ABLE ACCOUNT

DescriptionEffective December 23, 2017, rollovers of funds from a my529 account to an ABLE account are allowed.On page 20 of the July 14, 2017, Program Description, Part 5 | Rollovers and Transfers, Rollovers subsection, after the Outgoing Rollover to Another 529 Plan subsection, add the following header and subsection:

Outgoing Rollover to an ABLE Accountmy529 does not offer ABLE accounts.An account owner/agent may request to roll over funds from a my529 account to another state’s ABLE account by submitting a my529 Withdrawal Request form (Form 300) or an applicable rollover request form from the receiving ABLE program. The account owner/agent must date and sign the request. He or she must include the amount to be rolled over, to whom the check should be made payable, and the address where it should be sent. my529 will provide information to the receiving ABLE program that specifies which portion of the rollover is principal and which portion is earnings, if any.Funds in a my529 account may be rolled over only to an ABLE account owned by either the designated beneficiary or a member of the family of the designated beneficiary. Any funds rolled out will count toward the current annual ABLE account contribution limit. Please consult with the ABLE program to which you are rolling over funds if you have any questions about an ABLE account. If the entire account balance is rolled over, my529 will stop scheduled contributions and close the account.See Part 6 | Withdrawals to learn how my529 treats a rollover if funds are rolled out of accounts with the same account owner, same beneficiary, and same account type.The account owner/agent is responsible for maintaining records showing that money was rolled over to an ABLE program.The provision of federal law allowing rollovers from a 529 account to an ABLE account is currently scheduled to sunset or expire after 2025.



On page 20 of the July 14, 2017, Program Description, Part 5 | Rollovers and Transfers, Rollovers subsection, Outgoing Rollover to Another 529 Plan subsection, under Tax Considerations for an Outgoing Rollover, replace the second and third paragraphs:

For Utah state income tax purposes, a rollover from a my529 account to another state’s 529 plan or to an ABLE account is subject to recapture (addback) of all previously claimed Utah state 529 tax credits or deductions in the year the rollover is made. Utah taxpayers cannot claim a Utah state income tax credit for contributions made to any other state’s 529 plan, but they can claim a Utah state income tax credit for contributions to an account in another state’s ABLE program.

On page 25 of the July 14, 2017, Program Description, Part 6 | Withdrawals, Nonqualified Withdrawal subsection, Utah Tax Penalties subsection, replace the first sentence of the first paragraph:

If funds withdrawn from a my529 account (including rollovers to an ABLE account) are not used for qualified higher education expenses and a Utah state 529 income tax credit or deduction was claimed in any prior tax year, the account owner must recapture (add back) previously claimed Utah state 529 income tax credits or deductions.

Program DescriptionJULY 14, 2017

SAVE FOR COLLEGE. INSPIRE THEIR FUTURE.®

Utah’s official nonprofit 529 college savings program | 800.418.2551 | uesp.org

UESP Contact InformationMailing address UESP, PO Box 145100, Salt Lake City, UT 84114-5100Physical address UESP, State Board of Regents Building, Gateway 2, 60 South 400 West, Salt Lake City, UT 84101-1284Toll-free telephone 800.418.2551Local telephone 801.321.7188Toll-free fax 800.214.2956Email [email protected] uesp.orgHours of operation 8:00 a.m.–5:00 p.m., Mountain TimeDays of operation Monday–Friday (closed federal, State of Utah, and Utah State Board of Regents holidays)

Copyrights & TrademarksThe terms Utah Educational Savings Plan and UESP are registered service marks. Vanguard is a legally registered trademark of The Vanguard Group, Inc.

• All names of Vanguard funds are the property of The Vanguard Group.• UESP is not affiliated with The Vanguard Group and makes no representation

about the advisability of investing in Vanguard funds.

Dimensional is a legally registered trademark of Dimensional Fund Advisors LP.• Dimensional and DFA are legally registered trademarks of Dimensional Fund

Advisors LP in the United States and other countries. All rights reserved.• UESP is not affiliated with Dimensional Fund Advisors and makes no

representation about the advisability of investing in Dimensional funds.

July 14, 2017

Program Description i

Key Terms ii

Summary of Plan Features iv

Part 1 | Introduction 1About 529 Plans �� 1Understanding the Nature of a UESP Investment �� 1

Part 2 | Getting Started 3Before Starting �� 3Opening an Account �� 3Welcome to UESP �� 5

Part 3 | Program Participation Information 6Individual Accounts �� 6Institutional Accounts �� 7UGMA/UTMA Accounts �� 8Scholarship Programs �� 9Changing the Beneficiary �� 10Selecting an Investment Option �� 11Contributing to an Account �� 11Changing Account Contact Information �� 11Closing an Account �� 11Managing an Unused Account Balance �� 12Timing of Transactions �� 12Managing an Account Online �� 13

Part 4 | Contributions 14Before Contributing �� 14Contribution Methods �� 152017 Year-End Contribution Deadlines �� 17

Part 5 | Rollovers and Transfers 19Rollovers �� 19Transfers �� 20

Part 6 | Withdrawals 22Withdrawing Funds �� 22Qualified Withdrawal �� 24Nonqualified Withdrawal �� 25Outgoing Rollover to Another 529 Plan �� 26Transfer Between UESP Accounts �� 262017 Year-End Withdrawal Deadlines �� 26

Part 7 | Investment Information 27About the Investment �� 27Investment Options �� 28Age-Based Investment Options �� 28Static Investment Options �� 29Customized Investment Options �� 29Changing Investment Options �� 31

UESP Investment Option Asset Allocations Table �� 32Underlying Investments �� 33Investment Risks Associated with Underlying Investments �� 38Summary of Primary Investment Risks Associated with Investment Options Table �� 41Summary of Primary Investment Risks Associated with Underlying Investments Tables �� 42Investment Option Performance as of May 31, 2017, Table �� 43Investment Option Performance as of May 31, 2017, Table �� 44

Part 8 | Expenses and Fees 45Fee Structure �� 45Operating Expense Ratios of the Underlying Funds �� 45UESP Administrative Asset Fee �� 46Transaction Fees �� 46UESP Asset Fee Structure Table �� 47UESP Approximate Cost of a $10,000 Investment Table �� 48

Part 9 | Tax Considerations 49General Information �� 49Federal Tax Considerations �� 49State Tax Considerations �� 51

Part 10 | Key Risk Factors 54Understanding Investments �� 54Higher Education Costs and Attendance �� 54Potential Changes �� 55Federal Financial Aid Risks �� 55

Part 11 | Other Legal and Administrative Information 56Quarterly Account Statements �� 56No Pledging as Security for a Loan �� 56Limits on Representations �� 56Information Subject to Change �� 56Provision for Periodic Audits �� 57Extraordinary Events �� 57No Indemnification �� 57Limits on Protection from Creditors �� 57Privacy Policy �� 57Account Owner/Agent Obligations and Responsibilities �� 58

2017 Year-End Deadlines 60

Forms 61

Summary of Rules 63

Index 65

C O N T E N T S

Utah Educational Savings Plan

July 14, 2017

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iUtah Educational Savings Plan

The Program Description contains information you should know before participating in the Utah Educational Savings

Plan (UESP). It includes information about certain risks, limitations, restrictions, and fees in connection with opening and owning an account. Before you invest in UESP, carefully read the Program Description and any Supplements to it and keep them for future reference.

No one is authorized to provide information that is different from the information contained in the Program Description and any Supplements. The information in the Program Description is believed to be accurate as of July 14, 2017, and is subject to change without notice. This version of the Program Description supersedes all previous versions of the Program Description and Supplements.

UESP—A 529 PlanUESP is a 529 plan legally known as a “qualified tuition program.” UESP is designed as a tax-advantaged vehicle to encourage saving for the future qualified higher education expenses of a beneficiary. You should invest in UESP for this purpose only. Investing in a 529 plan to save for something other than qualified higher education expenses is inappropriate.

Understanding the Nature of Your InvestmentAccount ValueExcept to the extent specified below regarding Federal Deposit Insurance Corporation (FDIC) insurance, the value of your UESP account may vary depending on market conditions and the performance of the UESP investment option you select. The account’s value could be more or less than the amount you contribute. In short, your investment could lose value.Only contributions to and any subsequent earnings on FDIC-insured accounts, up to certain limits, offered by UESP will retain their value. This limitation applies to the FDIC-Insured investment option and to the portions of another UESP investment option with FDIC-insured accounts included as an underlying investment. Otherwise, investments in UESP are not insured by the FDIC.FDIC InsuranceExcept for the underlying investment specified below, investments in UESP are not insured by the FDIC.FDIC insurance, up to applicable FDIC limits, is provided for the FDIC-insured accounts held in trust by UESP at Sallie Mae Bank and U.S. Bank National Association (U.S. Bank) (collectively, Sallie Mae Bank and U.S. Bank are referred to herein as “Banks”). Contributions to and earnings on the FDIC-insured accounts for each UESP account owner are apportioned between

the Banks according to the following percentages: Sallie Mae Bank (90 percent) and U.S. Bank (10 percent). Money in the FDIC-insured accounts is insured by the FDIC on a pass-through basis to each account owner up to the maximum amount set by federal law, which is $250,000 at each Bank. The amount of FDIC insurance provided to an account owner at each Bank is based on the total of (1) the proportional value of an account owner’s investment in the FDIC-insured accounts at each Bank, plus (2) the value of the account owner’s other personal bank accounts (if any) held at each Bank, as determined by the Banks and by FDIC regulations.

No Other Insurance and No GuaranteesExcept to the extent already noted above regarding FDIC insurance, investments in UESP are not insured or guaranteed by any federal government agency, the State of Utah, UESP, the Utah State Board of Regents, the Utah Higher Education Assistance Authority (UHEAA), other state agencies, or any employees or directors of those entities.Units in UESP are not registered with the United States Securities and Exchange Commission (SEC) or with any state securities regulators.

Utah Tax BenefitsThe Utah state individual income tax credit, trust income tax credit, and corporate income tax deduction for contributions to UESP are available only to account owners who are Utah taxpayers.

Taxpayers and Residents of Other StatesNon-Utah taxpayers and residents: You should determine whether the state in which you or your beneficiary pays taxes or lives offers a 529 plan that provides state tax or other benefits not otherwise available to you by investing in UESP. You should consider such state tax treatment and benefits, if any, before investing in UESP.

P R O G R A M D E S C R I P T I O N

Quick Reference Page

Key terms ............................................................................................... ii

Contributing to an account ............................................................. 11, 14

Limitations on transfers ....................................................................... 20

Nonqualified withdrawal ..................................................................... 25

Risk factors ............................................................................... 38-42, 54

Investment options .............................................................................. 28

Investment option performance .....................................................43-44

Expenses and fees ................................................................................ 45

Federal and state tax considerations .................................................... 49

Key Terms

ii July 14, 2017

529 Plan or Qualified Tuition Program: a tax-advantaged college savings plan created pursuant to Section 529 of the Internal Revenue Code of 1986, as amended. Such plans and programs are designed to encourage saving for future qualified higher education expenses.Account Agent: the individual who is legally responsible for the account and authorized to act in the capacity of the account owner.

• For an individual account, the agent is also the owner.• For an institutional account, the agent is the authorized

trustee or authorized officer of the institution. The institution is the account owner.

• For an UGMA/UTMA account, the agent is normally the custodian and the account owner is the beneficiary.

• For a scholarship account owned by UESP, the agent is UESP.

• For a scholarship account owned by a foundation, government entity, or nonprofit organization (e.g., a children’s savings account), the agent is generally a representative of the foundation, government entity, or organization.

Account Agreement: the document submitted to UESP to open an account. Each account type has a separate Account Agreement:

• Individual Account Agreement (form 100), for an individual account

• Institutional Account Agreement (form 102), for an institutional account

• UGMA/UTMA Account Agreement (form 104), for an UGMA/UTMA account

• Scholarship Account Agreement (form 106), for a scholarship account

Account Owner: the person, company, trust, or other organization listed as the owner who is legally responsible for the account. For an UGMA/UTMA account, the beneficiary is also the account owner.Age-Based Investment Option: an investment option in which the mix of investments depends on and changes with the age of the beneficiary.Asset Fee: a fee assessed against the total funds in an account as a percentage of the account value.Bank or Banks: UESP’s FDIC-insured accounts are held in trust by UESP at Sallie Mae Bank and U.S. Bank National Association (U.S. Bank) (collectively, Sallie Mae Bank and U.S. Bank are referred to herein as “Banks”).Beneficiary: the person specified on the Account Agreement for whom the account is being opened and whose qualified higher education expenses are expected to be paid from the account.Collected Money: contributions that have cleared the contributor’s bank. Collected money is available for withdrawal or an internal transfer to another UESP account. See also Uncollected Money in this section.

Customized Investment Options: includes the Customized Age-Based and Customized Static investment options. An account owner/agent who invests in a customized investment option takes full responsibility to design his or her own customized asset allocation from the available underlying investments. See also Age-Based Investment Option and Static Investment Option in this section.Electronic Withdrawal: an account owner/agent-initiated qualified withdrawal that is deposited electronically into an account owner or beneficiary’s checking or savings account at a financial institution.Eligible Educational Institution: an institution described in Section 481 of the Higher Education Act of 1965 (20 U.S.C. Sec. 1088) that is eligible to participate in a program under Title IV of such Act. An eligible educational institution is usually any accredited university, college, or vocational school in the United States or abroad that participates in federal financial aid programs for students.FDIC (Federal Deposit Insurance Corporation): an institution created by the federal government in 1933 that insures checking, savings, and other types of deposit accounts held at banks and other savings associations. It does not insure securities, mutual funds, or other similar types of investments.FDIC-insured accounts: UESP’s FDIC-insured accounts are held in trust by UESP at the Banks. Contributions to and earnings on the FDIC-insured accounts for each UESP account owner are apportioned between the Banks according to the following percentages: Sallie Mae Bank (90 percent) and U.S. Bank (10 percent). Money in the FDIC-insured accounts is insured by the FDIC on a pass-through basis to each account owner up to the maximum amount set by federal law, which is $250,000 at each Bank.Interested Party: a person who has been granted access by an account owner/agent to view certain online information for a specific account. The interested party cannot make changes to the account or initiate transactions.Internal Transfer: an amount withdrawn from one UESP account and transferred to another UESP account with a beneficiary who is a member of the family of the previous beneficiary.Investment Option: the financial strategy selected by the account owner/agent that establishes how the account balance will be invested.Investment Option Change: a change to the allocation of an existing account from one investment option to another. Only the account owner/agent or a person with the appropriate Limited Power of Attorney authority can request an investment option change. The Internal Revenue Service (IRS) views the transfer of money (making a full-balance or partial-balance transfer) between two accounts as an investment option change if the account owner/agent, the beneficiary, and the account type are the same. An investment option change may be made twice per calendar year for the same beneficiary.

K E Y T E R M S

Key Terms

iiiUtah Educational Savings Plan

Limited Power of Attorney: designates an entity or individual as an account owner/agent’s attorney-in-fact, agent, and authorized representative to access UESP account(s), and to perform specific transactions. The account owner/agent continues to control the account and may perform any of the actions that the authorized representative has permission to perform.Member of the Beneficiary’s Family: the father or mother, or ancestor of either; a child, or descendant of a child; a stepfather or stepmother; a stepson or stepdaughter; a brother, sister, stepbrother, or stepsister; a half-brother or half-sister; a brother or sister of the father or mother; a brother-in-law, sister-in-law, son-in-law, daughter-in-law, father-in-law, or mother-in-law; a son or daughter of a brother or sister; a spouse of the beneficiary or any of the other individuals mentioned above; or a first cousin. A legally adopted child of an individual is treated as the child of such individual.Operating Expense Ratio: an asset-based fee charged against an underlying investment and netted against the performance of the underlying investment.Principal: the amount of money a UESP account owner has contributed to his or her account(s). Principal does not include earnings. Another word for principal is “basis.”Public Treasurers’ Investment Fund: a pool of money managed by the Utah state treasurer in short-term investments with an adjusted weighted average maturity of fewer than 90 days.Qualified Higher Education Expenses:

• Tuition, fees, books, supplies, and equipment required for the enrollment or attendance of a designated beneficiary at an eligible educational institution.

• Expenses for the purchase of a computer or peripheral equipment, computer software, or internet access and related services when used primarily by the beneficiary while enrolled at an eligible educational institution.

• Room and board for students who are enrolled at least half time. Reasonable costs incurred for room and board while attending an eligible educational institution may not exceed the allowance for room and board included in the cost of attendance as determined by the eligible educational institution, or, if greater, the actual invoice amount a student residing in housing owned or operated by the eligible educational institution is charged for room and board costs.

• Expenses for services in the case of a beneficiary who has special needs that are incurred in connection with such enrollment or attendance.

Reallocation: the process of moving money between target underlying investment allocations based on the beneficiary’s age for age-based investment options.Rebalance: the process of bringing an account’s underlying investments back to a target allocation. Rebalancing occurs on a beneficiary’s birthday or the next available business day.Rollover: an amount withdrawn from a qualified tuition program and deposited in another qualified tuition program within 60 calendar days for the benefit of either the same beneficiary or a member of the previous beneficiary’s family.

Static Investment Option: an investment option that maintains the same underlying investment allocation regardless of the age of the beneficiary.Successor Account Owner: an individual or trust that will assume all of the account owner’s rights and obligations for an account upon the death of the account owner.Third-Party Contribution: a contribution from someone other than the account owner/agent or beneficiary.Transfer: liquidated funds from another savings vehicle, such as a Coverdell Education Savings Account (ESA), an UGMA/UTMA account, or a U.S. Savings Bond, deposited into a UESP account.UESP Days of Operation: Monday through Friday, except for federal, State of Utah, and Utah State Board of Regents holidays.UESP Hours of Operation: 8 a.m. to 5 p.m. MT, on any UESP day of operation. A request or communication received after the hours of operation have ended normally will be handled on UESP’s next day of operation.Uncollected Money: contributions that have not cleared the contributor’s bank. It may take as long as seven business days for a check and four business days for a one-time or recurring electronic contribution to clear.Underlying Fund or Investment: based on the investment option selected for each account, UESP invests an account owner/agent’s contribution in a combination of Vanguard and Dimensional mutual funds, the Public Treasurers’ Investment Fund, or the FDIC-insured accounts held in trust at the Banks. These investments are referred to as the underlying funds or underlying investments.Uniform Gifts to Minors Act/Uniform Transfers to Minors Act (UGMA/UTMA) Account: an account created with liquidated funds from an UGMA or UTMA account where property was gifted/transferred to a minor without establishing a trust. On an UGMA/UTMA Account, the beneficiary is also the account owner. The account places money under the control of a person who is not the beneficial owner, but is an adult who will manage the account until the child reaches the age of majority.Unit(s): ownership interests issued by the UESP trust corresponding to underlying fund positions held by the trust. Account owners will own UESP units for each underlying fund in which UESP has invested their money. Account owners do not own the underlying funds.Unit Price: used to determine the amount of a transaction for a UESP account. The unit prices are determined by the value of the respective underlying funds. The value of each UESP unit is calculated after the close of market trading on each business day (normally 4 p.m. ET). Withdrawal: money withdrawn from an account and sent to a payee in the form of a check or an electronic funds transfer. Withdrawal checks may be sent to an account owner/agent, beneficiary, or an eligible educational institution. Withdrawals in the form of an electronic funds transfer may be sent to the specified checking or savings account of the account owner/agent or beneficiary, but may not be sent to an eligible educational institution. Withdrawn funds will automatically be taken proportionately from both principal (basis) and earnings.

Summary of Plan featureS

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This summary provides basic details about the Utah Educational Savings Plan (UESP) and directs you to more complete information in this Program Description. Read the entire Program Description carefully before you invest in UESP.

S U M M A R Y O F P L A N F E A T U R E S

About 529 PlansSee Part 1 | Introduction

• A 529 plan is a tax-advantaged savings plan designed to encourage saving for future qualified higher education expenses.

• Section 529 of the Internal Revenue Code (IRC) of 1986, as amended, allows states, state agencies, and some educational institutions to create and maintain 529 plans.

• Utah’s 529 plan is known as the Utah Educational Savings Plan (UESP). UESP is a nonprofit agency established by the State of Utah.

• Earnings on contributions made to a UESP account are exempt from federal and Utah state income taxes if used for qualified higher education expenses.

• UESP offers 14 investment options. » Thirteen investment options are market-based. Account values may fluctuate because of market

conditions. An account owner/agent assumes all investment risk. » The FDIC-Insured investment option provides insurance up to $250,000, with certain limitations, at

the Banks. FDIC insurance is available for the FDIC-Insured investment option or when allocated to portions of other UESP investment options that may include the FDIC-insured accounts as an underlying investment.

Opening an Account See Part 2 | Getting Started

• An account can be opened in two ways: » Individual accounts. Online at uesp.org. » Individual, institutional, Uniform Gifts to Minors Act/Uniform Transfers to Minors Act

(UGMA/UTMA), and scholarship accounts. By submitting the appropriate Account Agreement (form 100, 102, 104, or 106), available online at uesp.org, or by requesting a form at 800.418.2551.

Account InformationSee Part 2 | Getting Started

• The account owner/agent can view account information online at uesp.org under Account Access.• The account owner/agent for individual, institutional, and UGMA/UTMA accounts will receive

quarterly statements from UESP with information about his or her accounts. The account owner/agent for scholarship accounts will receive an annual statement from UESP with information about his or her accounts.

Account Owner/AgentSee Part 3 | Program Participation Information

• An account owner/agent must be at least age 18, have a valid U.S. Social Security or Taxpayer Identification Number, and have a physical address that is not a PO Box. However, a PO Box may be used as the mailing address.

• Trusts, partnerships, and corporations can be account owners with a designated agent. Proper documentation is required.

Account ControlSee Part 3 | Program Participation Information

• Except for UGMA/UTMA accounts, the account owner/agent controls how and when the money in an account is used. The beneficiary of an UGMA/UTMA account gains control of the money in his or her account upon reaching the age of majority, which may vary by state.

• The account owner/agent can withdraw money from the account at any time. However, nonqualified withdrawals are subject to applicable taxes and tax penalties.

• The investment option in an existing account for the same beneficiary and account type can be changed twice per calendar year without penalty.

BeneficiarySee Part 3 | Program Participation Information

• A beneficiary may be anyone with a valid U.S. Social Security or Taxpayer Identification Number.• The account owner/agent can change the beneficiary without penalty only if the new beneficiary is a

member of the family of the preceding beneficiary, as defined by Section 529 of the IRC.


vUtah Educational Savings Plan

Contributions and Account BalancesSee Part 4 | Contributions

• Anyone can contribute to a UESP account.• No initial or ongoing contributions are required.• A contribution can be made as a one-time or recurring electronic contribution from a checking or savings

account, by check, wire transfer, payroll contribution, online bill pay, rollover, internal transfer from another UESP account, special occasion contribution, the UESP Gift Program, or from a Utah state individual income tax refund.

• UESP will accept contributions for a beneficiary until all account balances for that beneficiary total $430,000.

Rollovers and TransfersSee Part 5 | Rollovers and Transfers

• Money can be rolled over from another 529 plan to UESP or from UESP to another 529 plan once every 12 months for the same beneficiary.

• Utah taxpayers must recapture (add back) any previously claimed Utah state income tax credit or deduction for money rolled over to another 529 plan.

• Liquidated Coverdell Education Savings Accounts (ESAs), UGMA/UTMA funds, and redeemed U.S. Savings Bonds can be transferred to a UESP account at any time.

Qualified WithdrawalsSee Part 6 | Withdrawals

• Money in the account can be used to pay for qualified higher education expenses, which include: » Tuition, fees, books, supplies, and required equipment » Computers and peripheral equipment, computer software, or internet access and related services

when used primarily by the beneficiary while enrolled at an eligible educational institution » Certain room and board costs at any eligible educational institution in the United States or abroad

Investment OptionsSee Part 7 | Investment Information

• UESP offers four age-based investment options, eight static investment options, and two customized investment options.

• Investment options include a variety of funds managed by The Vanguard Group, Inc. (Vanguard), Dimensional Fund Advisors LP (Dimensional), and the Public Treasurers’ Investment Fund. Investment options also include accounts insured by the Federal Deposit Insurance Corporation (FDIC) held in trust at the Banks.

Fees and Other ChargesSee Part 8 | Expenses and Fees

Underlying Investment Expenses (Operating Expense Ratios)• All investment options include the expense of the underlying investment, or Operating Expense Ratio.

The Operating Expense Ratios vary for the Vanguard and Dimensional funds. There are no Operating Expense Ratios on FDIC-insured accounts. The Operating Expense Ratio for the Public Treasurers’ Investment Fund is 0.005 percent, which UESP pays in full. UESP reserves the right to discontinue or limit paying the Operating Expense Ratio on the Public Treasurers’ Investment Fund after giving notice to affected account owners.

Administrative Asset Fee• Age-Based and Static Investment Options

Administrative Asset Fees range from 0.110 percent to 0.160 percent. Add in the underlying fund Operating Expense Ratios, if any, and the total annual asset-based fees range from 0.150 percent to 0.202 percent. Utah residents invested in the Public Treasurers’ Investment Fund are not charged the Administrative Asset Fee.

• Customized Investment Options The Administrative Asset Fee is 0.200 percent. Add in the underlying fund Operating Expense Ratios, if any, and the total annual asset-based fees range from 0.200 percent to 0.595 percent.

Other Charges• UESP does not charge fees for enrollment, investment option changes, withdrawals, or transfers.• Additional fees may be charged for incoming wire transfers ($15), returned checks or rejected electronic

contributions ($20), expedited deliveries, and other services.


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Tax AdvantagesSee Part 9 | Tax Considerations

Federal Income Tax Benefits• Earnings accrue deferred from federal income tax while in an account.• Earnings are exempt from federal income tax when used for qualified higher education expenses.• There is no gift tax on contributions up to $70,000 ($140,000 if filing jointly) per beneficiary if a five-year

averaging election is made.Utah State Income Tax Benefits• Earnings accrue deferred from Utah state income tax while in an account.• Earnings are exempt from Utah state income tax when used for qualified higher education expenses.• For contributions to be considered eligible for the Utah state income tax credit or deduction, the account

must be opened and the beneficiary designated before the beneficiary is age 19.• Individuals. For the 2017 tax year, Utah taxpayers filing an individual tax return can claim a 5 percent

Utah state income tax credit per qualified beneficiary for contributions up to $1,920. Utah taxpayers who are married and filing a joint tax return can claim a 5 percent Utah state income tax credit per qualified beneficiary for contributions up to $3,840.

• Trusts. For the 2017 tax year, Utah-based trusts can claim a 5 percent Utah state income tax credit for contributions up to $1,920 per qualified beneficiary. Utah-based grantor trusts whose grantor filing status is married and filing jointly can claim a 5 percent Utah state income tax credit for contributions up to $3,840 per qualified beneficiary.

• Corporations. For the 2017 tax year, Utah-based corporations are eligible for a Utah state income tax deduction for contributions up to $1,920 per qualified beneficiary.

Risk FactorsSee Part 10 | Key Risk Factors

• Investment, tax, and other risks are associated with opening a UESP account. Your investment in UESP is not guaranteed. Except for the FDIC-insured accounts, your investment in UESP is ineligible for insurance provided by the FDIC.

• Contributions to and subsequent earnings on the FDIC-insured accounts are held in trust at the Banks, and are allocated between the Banks according to the following percentages: Sallie Mae Bank (90 percent) and U.S. Bank (10 percent). The amount of FDIC insurance provided to each account owner at each Bank invested in the FDIC-insured accounts is up to the maximum amount set by federal law, which is $250,000 at each Bank.

• Depending on market conditions, your investment could lose value. • Congress, the Treasury Department, the Internal Revenue Service (IRS), the State of Utah, or other tax

authorities or courts could take action that would adversely change federal or state tax laws governing accounts in UESP.

• UESP could change fees or investment options in the future.• A UESP account may negatively affect a beneficiary’s ability to qualify for need-based financial aid.• Evaluate all risks carefully before opening an account.

Privacy PolicySee Part 11 | Other Legal and Administrative Information

• UESP respects your right to privacy and recognizes UESP’s obligation to keep your information secure and confidential.

Year-End DeadlinesSee 2017 Year-End Deadlines

• For mailed Account Agreements, contributions, or withdrawals to be processed for the 2017 tax year, they must be received in good order by UESP before 5 p.m. MT, Friday, December 29, 2017. Online Account Agreements, contributions, or qualified withdrawal requests must be received in good order by UESP before 11:59 p.m. MT, Sunday, December 31, 2017. Contributions or withdrawal requests postmarked in 2017 but received in 2018 will be considered contributions or withdrawals for the 2018 tax year.

1

1Utah Educational Savings Plan

T his section provides general information about tax-advantaged Section 529 plans, which are designed

to encourage savings for future qualified higher education expenses. The introduction outlines the main features of the Utah Educational Savings Plan (UESP), introduces the potential tax benefits of opening a UESP account, and summarizes the risks inherent to the investment options UESP offers.

ABOUT 529 PLANS

Section 529Section 529 of the Internal Revenue Code (IRC) of 1986, as amended, allows states, state agencies, and eligible educational institutions to offer qualified tuition programs known as 529 plans. A 529 plan is a tax-advantaged vehicle designed to encourage individuals to save for the qualified higher education expenses of a designated beneficiary.Currently, 49 states and the District of Columbia offer at least one 529 plan. Many states may also offer state tax incentives or other benefits to residents. Some states have chosen to hire financial services companies to manage their 529 plan(s).Depending on the state, investments in a 529 plan can be made directly through the state issuer, through the financial services company managing the 529 plan, or through an individual financial advisor.Section 529 qualified tuition programs are intended to be used to save only for qualified higher education expenses. These programs are not intended to be used, and should not be used, by any taxpayer for the purpose of evading federal or state taxes or tax penalties. Opening a 529 plan account for any purpose other than to save for the qualified higher education expenses of a beneficiary is inappropriate. You may wish to seek tax advice from a tax advisor based on your particular circumstances.

Utah’s 529 PlanThe Utah Educational Savings Plan (UESP), authorized by the Utah Legislature, is designed to comply with IRC Section 529. UESP is administered and managed by the Utah State Board of Regents and the Utah Higher Education Assistance Authority (UHEAA).UESP is the official and only 529 plan sponsored by the State of Utah. UESP is a nonprofit, self-sustaining agency established by the State of Utah to administer a public trust for the benefit of UESP account owners and beneficiaries. UESP pools contributions from investors for the purpose of investing in a

mix of Vanguard and Dimensional mutual funds, the Public Treasurers’ Investment Fund, and the FDIC-insured accounts held at Sallie Mae Bank (90 percent) and U.S. Bank (10 percent).The Vanguard and Dimensional funds, the Public Treasurers’ Investment Fund, and the FDIC-insured accounts are known as underlying investments or underlying funds. Each of UESP’s 14 investment options comprises some combination of the underlying investments.An account owner does not own shares in the underlying investments. The account owner owns UESP units issued by the UESP trust.UESP is a direct-sold 529 plan. A person may open or contribute to a UESP account without assistance from a financial advisor or broker-dealer.

Tax BenefitsEarnings on contributions to a UESP account are exempt from federal and Utah state income taxes if used for qualified higher education expenses. Utah taxpayers who own accounts may also claim Utah state income tax credits or deductions for eligible contributions made to their UESP accounts. Utah taxpayers cannot claim a Utah state income tax credit or deduction for contributions made to the 529 plan of any other state. See Part 9 | Tax Considerations for more information.An account owner/agent should consult a tax advisor regarding his or her individual tax situation before investing in UESP.Non-Utah taxpayers and residents: You should determine whether the state in which you or your beneficiary pays taxes or lives offers a 529 plan that provides state tax or other benefits not otherwise available to you by investing in UESP. You should consider such state tax treatment and benefits, if any, before investing in UESP.

UNDERSTANDING THE NATURE OF A UESP INVESTMENT

Account ValueThe value of your UESP account may vary depending on market conditions and the performance of the investment option you select. It could be more or less than the amount you contribute. In short, your investment could lose value.However, subject to the application of the Bank and FDIC rules and regulations to each account owner, money in the FDIC-insured accounts will retain its value, whether in the FDIC-Insured investment option or when allocated to portions of

P A R T 1 | I N T R O D U C T I O N

Part 1 | IntroductIon

2 July 14, 2017

another investment option that includes FDIC-insured accounts as an underlying investment.

FDIC InsuranceExcept for the underlying investment specified below, investments in UESP are not insured by the FDIC.FDIC insurance, up to applicable FDIC limits, is provided for the FDIC-insured accounts held in trust by UESP at the Banks. Contributions to and earnings on the FDIC-insured accounts for each UESP account owner are apportioned between the Banks according to the following percentages: Sallie Mae Bank (90 percent) and U.S. Bank (10 percent). Money in the FDIC-insured accounts is insured by the FDIC on a pass-through basis to each account owner up to the maximum amount set by federal law, which is $250,000 at each Bank. The amount of FDIC insurance provided to an account owner at each Bank is based on the total of (1) the proportional value of an account owner’s investment in the FDIC-insured accounts at each Bank, plus (2) the value of the account owner’s other personal bank accounts (if any) held at each Bank, as determined by the Banks and by FDIC regulations.

No Other Insurance and No GuaranteesExcept as already noted, investments in UESP are not insured or guaranteed by the federal government, the State of Utah, UESP, the Utah State Board of Regents, UHEAA, other state agencies, or their employees or directors.

UESP Is Not a Mutual FundMoney contributed to UESP accounts will be invested according to the allocation in the investment option the account owner/agent selects. Neither UESP nor any UESP account is a mutual fund. The account owner does not own shares in Vanguard or Dimensional mutual funds or have an account with either

the Public Treasurers’ Investment Fund or either of the Banks. The account owner will own UESP units that represent ownership interests issued by the UESP trust corresponding to underlying fund positions held by the trust. Account owners do not own the underlying funds.Investments in UESP are considered municipal fund securities, which are not registered with the United States Securities and Exchange Commission (SEC), or with any state securities agency. UESP is neither a registered investment company nor a registered investment advisor with the SEC or with any state securities agency.

Changes in Tax Law and UESPIt is possible that federal and state tax laws may change in a way that will adversely affect UESP and UESP accounts. See Part 9 | Tax Considerations for more information. The Utah State Board of Regents and UHEAA may also make amendments to UESP rules, regulations, and policies at any time. This Program Description will be updated as needed to reflect tax law changes or other material changes.

This Program Description contains important, detailed information about opening a UESP account and the rules, regulations, and policies governing the account.Read this document in its entirety and carefully consider all aspects of investing in UESP before opening an account. Keep this Program Description and all Supplements to it for future reference.

2


This section outlines the steps to open a Utah Educational Savings Plan (UESP) account online or by submitting an

appropriate Account Agreement. The section provides information applicable to individual, institutional, and Uniform Gifts to Minors Act/Uniform Transfers to Minors Act (UGMA/UTMA) accounts. Topics include account types, choosing a beneficiary, selecting an investment option, various ways to contribute, and how to monitor an account online.

BEFORE STARTINGNote the following information before opening a UESP account.

General InformationEach account may have only one account owner/agent, one beneficiary, and one investment option. An account owner/agent may open multiple accounts for different beneficiaries. An account owner/agent also may open multiple accounts with different investment options for the same beneficiary.Anyone can contribute to an account regardless of who owns the account. However, (1) only the account owner/agent can control how money is invested and used, and (2) only the Utah taxpayer account owner can claim applicable Utah state income tax benefits related to the account, regardless of who contributed to it.

Submitting Information to UESPVerifying IdentitiesUESP is required to obtain certain personal information about an account owner/agent and beneficiary. This information includes names, U.S. Social Security or Taxpayer Identification Numbers, dates of birth, and physical addresses. PO Box numbers may be used only for mailing purposes.If UESP is not able to verify the identity of the account owner/agent or the beneficiary, UESP reserves the right not to open an account or to close an existing account, and disburse the account balance to the account owner/agent. The account owner/agent is responsible for any resulting tax consequences.

Documents in Good Order All information UESP receives must be in good order—accurate, proper, legible, and complete. Transaction requests that are not in good order will not be processed. UESP will notify the account owner/agent and/or return the documents for completion.

OPENING AN ACCOUNTBefore opening an account, carefully read this Program Description and any Supplements to it. An account may then be opened by:

• Signing up online at uesp.org (individual accounts only). If signing up online, print, sign, and mail or fax an Account Owner/Agent Signature Card (form 110) to UESP, which can be downloaded online at uesp.org.

• Submitting an Account Agreement to UESP by mail, fax, or hand delivery (individual, institutional, UGMA/UTMA accounts).

An Account Agreement can be downloaded online at uesp.org, or a mailed copy can be requested by calling UESP toll-free at 800.418.2551. Once the account applicant has provided the required information and signed the form, he or she should submit it to UESP by mail, by fax, or in person.

Step 1: Select an Account TypeEach account must have a designated account type. The most common UESP account types are:Individual. A person who is at least age 18 opens an individual account to save for the future qualified higher education expenses of a beneficiary. The account can be opened online at uesp.org or by submitting an Individual Account Agreement (form 100).Institutional. A trust, corporation, or other entity opens an institutional account to save for the future qualified higher education expenses of a beneficiary. Because UESP requires supporting documentation, an institutional account can be opened only by submitting an Institutional Account Agreement (form 102).UGMA/UTMA. A custodian or agent for a minor opens an UGMA/UTMA account. An UGMA/UTMA account may be funded with liquidated funds previously gifted or transferred under the Uniform Gifts to Minors Act/Uniform Transfers to Minors Act (UGMA/UTMA). The account also may be funded with non-UGMA/UTMA funds. The account can be opened only by submitting an UGMA/UTMA Account Agreement (form 104).To learn more about each account type, see Part 3 | Program Participation Information. Carefully read the description of each account type to determine which type is appropriate. Tax and/or legal considerations may be different for each account depending on the account type selected.

P A R T 2 | G E T T I N G S T A R T E D

Part 2 | GettinG Started

4 July 14, 2017

Step 2: Name an Account Owner/AgentEach account must have an account owner—the person, trust, corporation, or entity responsible for the account. A UESP account owner may be an individual, trust, corporation, or legal representative with a valid U.S. Social Security or Taxpayer Identification Number. An account owner does not have to be a Utah resident.Trusts, corporations, and other entities must name an agent to act on behalf of the account owner. An UGMA/UTMA custodian also serves as an account’s agent.To learn about account owners and agents, see pages 6-9.

Step 3: Choose a BeneficiaryEach account must have a beneficiary. A beneficiary is the person for whom the account is being opened and whose qualified higher education expenses are expected to be paid from the account.A beneficiary can be any person with a valid U.S. Social Security or Taxpayer Identification Number. A beneficiary does not have to be a Utah resident.The following information about the beneficiary is required to open an account:

• Name• U.S. Social Security or Taxpayer Identification Number• Date of birth• Physical Address• Relationship to the account owner/agent

An account owner/agent may designate only one beneficiary for each account. To learn more about beneficiaries, see pages 7-11.

Step 4: Name Successor Account OwnersOnly individual accounts can have successor account owners. Account owners may designate up to two secondary successor account owners (to the extent permissible under applicable state law). A successor account owner assumes all of the account owner’s rights and obligations for an account upon the death of the account owner. A successor account owner must meet all of the same requirements as the account owner. To learn more about successor account owners, see pages 6-9.

Step 5: Select an Investment OptionEach account must be invested in only one of UESP’s age-based, static, or customized investment options. Each investment option carries a different type of investment and risk level.See Part 7 | Investment Information for descriptions of UESP’s investment options and their associated risks.All money contributed to the account will be invested in accordance with the investment option designated by the account owner/agent. If the account owner/agent does not select an investment option on the Account Agreement, contributions will be automatically invested in the FDIC-Insured investment option.

An account owner/agent may change an account’s investment option at a later date either online at uesp.org or by submitting an Investment Option Change form (form 405). However, the Internal Revenue Service (IRS) limits the number of investment option changes to two per calendar year for a beneficiary. To learn more about investment option changes, see page 31.

Step 6: Make a ContributionInitial ContributionsNo minimum initial contribution is required to open an account. An account owner/agent can make an initial contribution online at uesp.org or by submitting the appropriate form for the following methods:

• One-time or recurring electronic contribution from a checking or savings account

• Check• Wire transfer• Payroll• Online bill pay• Rollover• Internal transfer from another UESP account• Special occasion electronic contribution• Gift Program• Utah state individual income tax refund1

Notes1 Utah state income tax refunds may be deposited only in individual accounts.

Additional ContributionsAdditional contributions can be made any time using the methods listed above after an individual or institutional account has been established.To learn more about contribution methods, see pages 15-17.

Liquidated UGMA/UTMA FundsThe custodian for a minor under UGMA/UTMA may liquidate funds in a non-UESP UGMA/UTMA account and use the proceeds to open a UESP UGMA/UTMA account, subject to certain limitations. The custodian may also use non-UGMA/UTMA funds to open a UESP UGMA/UTMA account. However, any non-UGMA/UTMA funds contributed to a UESP UGMA/UTMA account become UGMA/UTMA funds and are subject to UGMA/UTMA rules. See Part 3 | Program Participation Information for more information.Contributions can be made to a UESP UGMA/UTMA account using the following methods:

• Check• Wire transfer• Rollover

Contribution of UGMA/UTMA Liquidated FundsA one-time or recurring electronic contribution to a UESP UGMA/UTMA account with non-UESP UGMA/UTMA liquidated funds may not be authorized and set up online. However,

Part 2 | GettinG Started


a one-time or recurring electronic contribution may be established when:

• The UESP UGMA/UTMA account is opened by completing the UGMA/UTMA Contribution Authorization section of the UGMA/UTMA Account Agreement (form 104).

• A One-Time or Recurring Electronic Contributions Authorization/Change form (form 200) is submitted to UESP. The source of funds (e.g., a voided UGMA/UTMA check or bank statement) may be submitted with the form. Non-UGMA/UTMA funds may also be used to make contributions to a UESP UGMA/UTMA account. See Part 4 | Contributions for more information.

Rollover and Transfer Contributions to UESP Accounts An account owner/agent may contribute to an account through a rollover or transfer of funds from another 529 plan, an internal transfer between UESP accounts, a Coverdell Education Savings Account, or certain U.S. Savings Bonds issued after 1989.There are limitations on such a rollover or transfer, and tax consequences may result. An account owner/agent should consult a tax advisor regarding his or her situation.A Utah taxpayer account owner is eligible for Utah state income tax benefits for rollover contributions to his or her UESP accounts. Internal transfers between UESP accounts are ineligible for a Utah state income tax credit or deduction.

Mailed ContributionsTo mail a contribution, make the check payable to UESP and send it to: UESP, PO Box 145100, Salt Lake City, UT 84114-5100. Write the UESP account number and beneficiary’s name on the front of the check.

Step 7: Sign and Submit PaperworkAn account owner/agent who opens an account online must sign and submit an Account Owner/Agent Signature Card (form 110). This allows UESP to verify the signature for future transactions.An account owner/agent who submits an Account Agreement must sign the form. By doing so, the account owner/agent certifies that all information is correct and agrees to the terms, rights, and responsibilities of the Account Agreement. A Signature Card is not required because the account owner/agent’s signature is on the Account Agreement submitted to UESP.The account owner/agent can submit a completed Account Agreement, Signature Card, and supporting documentation (if applicable) in one of the following ways:

• Mail: UESP, PO Box 145100, Salt Lake City, UT 84114-5100• Hand delivery/overnight courier: UESP, State Board

of Regents Building, Gateway 2, 60 South 400 West, Salt Lake City, UT 84101-1284

• Fax: 800.214.2956

Step 8: Set Up Online Account AccessAn account owner/agent who opens an account online at uesp.org must create a username, password, and provide

answers to security questions as the final step in the setup process. This information is required to access account information online. The account owner/agent can sign up for Account Access online at uesp.org by selecting Account Access and following the instructions.

WELCOME TO UESP

Welcome PacketAccount ConfirmationAn account owner/agent will receive confirmation from UESP when an account is opened.

• An account owner/agent who signs up online will receive a confirmation email containing an account number, the beneficiary’s name, and investment information for the account.

• An account owner/agent who submits an Account Agreement will receive a confirmation letter that provides the account number, beneficiary name, and investment information for the account.

The account owner/agent should carefully check the confirmation to ensure the information is accurate. UESP should be notified of any discrepancy or inaccuracy as soon as possible, but no later than 60 calendar days after the account is opened. After that time, the information is presumed to be correct.

Account CertificateUESP will mail a certificate with the confirmation letter that states an account owner/agent has opened an account for qualified higher education expenses for the beneficiary. An account owner/agent who opens an account online can choose to receive the certificate in the mail. The certificate also can be generated online at uesp.org under Account Access.

DocumentationProgram Description and Other Documents Keep the latest issue of the Program Description, all Supplements, and a copy of the completed Account Agreement submitted to UESP or the notice of confirmation for future reference.Read the quarterly account statements, quarterly newsletters, new Program Descriptions, and any Supplements, as well as any other information UESP provides throughout the ownership of the account. Visit uesp.org for updated program and account information.Contact UsTo contact UESP to open an account, request forms, or ask program-related questions, email [email protected] or call 800.418.2551 toll-free. Send written requests to UESP, PO Box 145100, Salt Lake City, UT 84114-5100.

Detailed, important information about opening an account, and the rules, regulations, and policies governing the account, are included on the following pages.

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This section describes the management and control of Utah Educational Savings Plan (UESP) accounts. The

section presents rules and regulations pertaining to individual, institutional, and Uniform Gifts to Minors Act/Uniform Transfers to Minors Act (UGMA/UTMA) accounts. Topics include who can open a UESP account, who controls the account, restrictions on how the account owner/agent may manage the account, and how to close the account.Please read the descriptions of the account types below to determine which type is appropriate. Tax and/or legal considerations may be different depending on the account type selected.

INDIVIDUAL ACCOUNTSA person at least age 18 can open an individual account to save for the future qualified higher education expenses of a beneficiary.An individual account may be opened online at uesp.org or by submitting an Individual Account Agreement (form 100).Neither the account owner nor the beneficiary is required to be a Utah resident.To receive Utah state income tax benefits, the account owner must be a Utah taxpayer resident. For more information, see pages 51-53.

Account OwnerThe account owner is also the agent responsible for the individual account. The account owner is authorized to make decisions about and transactions on the account and remains in control of the account even after the beneficiary becomes an adult. The beneficiary cannot request information, or initiate, approve, or otherwise authorize any transactions or changes to the account.The account owner must provide UESP with his or her legal name, U.S. Social Security or Taxpayer Identification Number, date of birth, a physical address in the United States, and contact information when opening the account.

Changing the Account OwnerThe account owner may be changed by submitting a completed Account Owner/Agent Change form (form 505). The following items will be cancelled or removed from an account upon the change of an account owner:

• One-time or recurring electronic contributions from a checking or savings account

• Scheduled withdrawals• Online Account Access

• Online account statement delivery• Primary and secondary successor account owners• Online interested party access• Any limited power of attorney authorization• Gift Program code

Death of the Account OwnerUpon the death of an individual account owner, the successor account owner must submit a death certificate for the previous account owner and a completed and signed Account Owner/Agent Change form (form 505) to UESP.If no successor account owner is named or listed for the account, or the named successor(s) cannot or refuses to accept ownership of the account, the account beneficiary will become the account owner.If the beneficiary is a minor at the time of the account owner’s death, he or she becomes the new account owner and the beneficiary’s guardian becomes the custodian or agent of the account. The account will then become an UGMA/UTMA account, subject to the restrictions and limitations applicable to such accounts. For more information, see UGMA/UTMA Accounts in this section. The beneficiary’s guardian must complete and sign an Account Owner/Agent Change form (form 505), provide a copy of the original owner’s death certificate, and submit the documents to UESP with proof of guardianship before control of the account can be changed.

Successor Account OwnersAn individual account owner may designate a primary and a secondary successor account owner (to the extent permissible under applicable state law) to automatically assume all of the account owner’s rights and obligations for an account upon the death of the account owner. A successor account owner is not considered a joint account owner and cannot initiate transactions, sign forms, or request information from UESP about the account.The designation can be made online at uesp.org, on the Individual Account Agreement (form 100), or on the Primary/Secondary Successor Owner Designation, Change, or Removal form (form 515). A primary or secondary successor account owner must be (1) a person who is at least age 18, or (2) an institution.To name an institution as a successor account owner, the account owner should submit the required documentation for the institution with an Individual Account Agreement (form 100) for new accounts or the Primary/Secondary Successor Owner Designation, Change, or Removal form (form 515). See Required Documentation in this section for more information.

P A R T 3 | P R O G R A M P A R T I C I P A T I O N I N F O R M A T I O N

Part 3 | Program ParticiPation information


Changing Successor Account OwnersAn account owner/agent can add, change, or remove successor account owners online at uesp.org, or by submitting a Primary/Secondary Successor Owner Designation, Change, or Removal form (form 515).

BeneficiaryThe beneficiary is the person specified on the Account Agreement for whom the account is being opened and whose qualified higher education expenses are expected to be paid from the account.The account owner may designate only one beneficiary for each account. However, an account owner may have multiple accounts for the same beneficiary, as long as each account has a different investment option. Multiple account owners may have accounts for the same beneficiary.See page 29 for information about the customized investment options, which allow an account owner/agent to customize an account’s investment allocation. This may minimize or eliminate the need to have multiple accounts for a single beneficiary. As the account owner/agent builds a customized investment option, he or she should review the fees associated with each underlying investment that comprise the customized option.The beneficiary cannot request information, or initiate, approve, or otherwise authorize any transactions or changes on the account.

EligibilityThe beneficiary can be any person with a valid U.S. Social Security or Taxpayer Identification Number, and of any age. The beneficiary is not required to be a Utah resident. The account owner and beneficiary can be the same person, if the individual is at least age 18. The account owner and beneficiary do not need to be related.

Required InformationThe beneficiary’s legal name, U.S. Social Security or Taxpayer Identification Number, date of birth, physical address, and relationship to the account owner must be provided when opening the account.

Utah State Income Tax ConsiderationsFor an individual Utah taxpayer account owner to qualify for a Utah state income tax credit, the account must be opened and the beneficiary designated before the beneficiary is age 19. If this requirement is met, the account owner is eligible for the Utah state income tax credit each year a contribution is made for the life of the beneficiary’s account. See Part 9 | Tax Considerations for more information.

INSTITUTIONAL ACCOUNTSAn institutional account may be opened by an institution such as a trust, corporation, or other entity to save for the future qualified higher education expenses of a beneficiary.An institutional account may be opened by submitting an Institutional Account Agreement (form 102).

Account Owner/AgentAccount OwnerThe account owner of an institutional account is a trust, corporation, or other entity. The institution must provide a valid Social Security or Taxpayer Identification Number and other required documentation. See Required Documentation in this section for more information.The account owner remains in control of the account after the beneficiary becomes an adult. The beneficiary cannot request information or initiate, approve, or otherwise authorize any transactions or changes on the account.

Account AgentThe institutional account agent serves as the contact person who acts on behalf of the account. He or she must be a trustee, corporate officer, or other person authorized by the entity to act on its behalf. Only one agent may be designated per institutional account. The same agent must be designated for all institutional accounts owned by the institution.The agent’s legal name, U.S. Social Security or Taxpayer Identification Number, date of birth, physical address, and contact information must be provided when opening the account.The agent who signs the Account Agreement and acts on behalf of the entity must sign any subsequent requests or transactions on the account. UESP requires only one signature, but if the legal requirements of an entity require multiple signatures, the trustees or officers should consult a legal advisor regarding enrollment in UESP and carefully consider using other savings vehicles.

Changing the Account Owner/AgentThe account owner may be changed by submitting a completed Account Owner/Agent Change form (form 505). If the account owner/agent is changed from an institution to an individual, the account will become an individual account.The account agent may be changed by submitting an Account Owner/Agent Change form (form 505) and including the required documentation. See Required Documentation in this section for more information.The following items will be cancelled or removed from an account upon the change of an account owner or agent:

• One-time or recurring electronic contributions from a checking or savings account

• Scheduled withdrawals• Bank account information• Online Account Access• Online interested party access• Any limited power of attorney authorization• Gift Program code

Required DocumentationAn institution must provide certain documents to open an account or to serve as a successor account owner on an individual


8 July 14, 2017

account. UESP will presume that any trust or corporate document provided is valid, effective, and has no legal defects.

TrustsTo name a trust as an account owner or successor account owner, the agent must provide a copy of the following pages of the trust document:

• Title page• Signature pages• Pages showing names of trustees and successor trustees

Corporations and Other EntitiesTo name a corporation or other entity as an account owner or successor account owner, the agent must provide a copy of the appropriate documents from the entity that demonstrate the individual signing the Account Agreement is:

• Authorized to make investments on behalf of the corporation or other entity

• An authorized officer of the entity

Successor Account OwnersAn institutional account may not list a successor account owner. An institutional account is required to follow any legal instructions of the trust or entity regarding any change to the ownership of the account or the account agent. However, an institution may be listed as a successor account owner of an individual account.

BeneficiaryThe beneficiary is the person specified on the Account Agreement for whom the account is being opened and whose qualified higher education expenses are expected to be paid from the account.The account owner/agent may designate only one beneficiary for each account. However, the account owner/agent may have more than one account for the same beneficiary as long as each account has a different investment option. Additionally, multiple account owners/agents may have accounts for the same beneficiary.See page 29 for information about the customized investment options, which allow an account owner/agent to customize an account’s investment allocation. The options may minimize or eliminate the need to have multiple accounts for a single beneficiary. As the account owner/agent builds a customized investment option, he or she should review the fees associated with each underlying investment that comprise the customized option.The beneficiary cannot request information or initiate, approve, or otherwise authorize any transactions or changes on the account.

EligibilityThe beneficiary may be any person with a valid U.S. Social Security or Taxpayer Identification Number and of any age. The beneficiary does not have to be a Utah resident. The account owner/agent and the beneficiary do not need to be related.

Required InformationThe beneficiary’s legal name, U.S. Social Security or Taxpayer Identification Number, date of birth, physical address, and relationship to the account owner/agent must be provided when an account is opened.

Utah State Income Tax ConsiderationsAn account must be opened and the beneficiary must be designated before the beneficiary is age 19 for an institutional account owner to qualify for a Utah state income tax credit (Utah-based trusts) or deduction (Utah-based corporations). If the requirement is met, the account owner is eligible for the Utah state income tax credit or deduction each year a contribution is made for the life of the beneficiary’s account. See Part 9 | Tax Considerations for more information.

UGMA/UTMA ACCOUNTSAn UGMA/UTMA account is created under the Uniform Gifts to Minors Act/Uniform Transfers to Minors Act (UGMA/UTMA).A UESP UGMA/UTMA account must be established separately from any other account that the UGMA/UTMA custodian may hold for the beneficiary (i.e., a UESP individual account).Money in an UGMA/UTMA account is an irrevocable and permanent gift to the minor beneficiary. However, any non-UGMA/UTMA funds contributed to a UESP UGMA/UTMA account become UGMA/UTMA funds and are subject to UGMA/UTMA rules. Money from an UGMA/UTMA account may be used only by the beneficiary or used on the beneficiary’s behalf. See Part 5 | Rollovers and Transfers for information about transferring UGMA/UTMA funds into a UESP UGMA/UTMA account.A UESP UGMA/UTMA account may be opened by submitting an UGMA/UTMA Account Agreement (form 104).

Account Owner/AgentAccount OwnerThe minor is both the account owner and the beneficiary of an UGMA/UTMA account.

Account AgentThe agent of a UESP UGMA/UTMA account is not required to be the custodian of the original UGMA/UTMA account.However, the agent (i.e., UGMA/UTMA custodian) is responsible for opening the UESP UGMA/UTMA account, acting in the best interest of the beneficiary, and complying with UGMA/UTMA laws and regulations in the state where the original UGMA/UTMA account was created. The agent must be at least age 18.

UGMA/UTMA Accounts

Special rules governing UGMA/UTMA accounts can be found throughout the Program Description. If you have any questions about UGMA/UTMA accounts, call UESP toll-free at 800.418.2551.



The agent is responsible for managing the UESP UGMA/UTMA account until the beneficiary reaches the age of majority designated by the state where the money was originally gifted under UGMA/UTMA.When the beneficiary reaches the age of majority, which varies by state, the agent must submit an Account Owner/Agent Change form (form 505) for the beneficiary to assume responsibility for the account. At such time, the account type will be changed from UGMA/UTMA to individual, and the agent will no longer have authority over the account.

Changing the Account AgentOnly the agent—not the owner or beneficiary—of an UGMA/UTMA account can be changed. To change the agent of an UGMA/UTMA account, submit an Account Owner/Agent Change form (form 505).

Successor Account OwnerAn UGMA/UTMA account may not list a successor account owner because the account funds are a permanent gift to the beneficiary. If the beneficiary of an UGMA/UTMA account dies, the account funds will become part of the beneficiary’s estate.

BeneficiaryThe beneficiary is the person specified on the Account Agreement for whom the account is being opened and whose qualified higher education expenses will be paid from the account.The minor is both the account owner and beneficiary of the UESP UGMA/UTMA account. When liquidated UGMA/UTMA account funds are used to make a contribution to a UESP UGMA/UTMA account, the beneficiary of the UESP UGMA/UTMA account must be the same individual who was listed as the beneficiary of the liquidated UGMA/UTMA account funds. The beneficiary can be any age, but must have a valid U.S. Social Security or Taxpayer Identification Number. The beneficiary does not have to be a Utah resident.

Required InformationThe beneficiary’s legal name, U.S. Social Security or Taxpayer Identification Number, date of birth, physical address, and relationship to the agent (if any) must be provided when opening the account.

Changing the BeneficiaryThe beneficiary on an UGMA/UTMA account cannot be changed.

Tax ConsiderationsLiquidating noncash funds held in an UGMA/UTMA account may trigger tax consequences. The custodian should discuss with a tax advisor any potential tax consequences of opening a UESP UGMA/UTMA account before transferring non-Utah UGMA/UTMA funds to UESP. UESP is not liable for any consequences related to improper use, transfer, or characterization of funds by an agent or custodian.For a Utah UGMA/UTMA account owner (i.e., the beneficiary) to qualify for a Utah state income tax credit, the account must be

opened and the beneficiary designated before he/she is age 19. If this requirement is met, the account owner is eligible for the Utah state income tax credit each year a contribution is made for the life of the beneficiary’s account.Because of the special nature of UGMA/UTMA accounts, only the beneficiary, not the UGMA/UTMA account agent, is eligible for Utah state income tax benefits, even though the beneficiary is a minor. See Part 9 | Tax Considerations for more information.

SCHOLARSHIP PROGRAMSSection 529 allows special treatment for accounts opened as part of a scholarship program operated by (1) a state or local government (or agency or instrumentality thereof), or (2) a tax-exempt 501(c)(3) organization. A qualifying institution may open a scholarship program master account, and/or scholarship account(s), with UESP to save money for its scholarship program.

A master account:• Must be opened by submitting a Master Account

Agreement (form 105); cannot be opened online because of required documentation

• Does not have a specific individual designated as the beneficiary

• May be invested the static investment options, including the Customized Static option (It may not be invested in the age-based options, including the Customized Age-Based option)

• Is not rebalanced annually• Must have an account agent designated as the contact

person who will act on behalf of the account• May be used as a holding account for the institution’s

scholarship moneyAccount withdrawals must be used to pay for qualified higher education expenses.

A scholarship account:• May be opened by submitting a Scholarship Account

Agreement (form 106)• Is opened and owned by an institution for a

specific beneficiary• Will automatically assign the account agent previously

designated on the institution’s master account• May name only one beneficiary per account; a separate

scholarship account may be opened for each beneficiary participating in the scholarship program

• Requires a valid U.S. Social Security or Taxpayer Identification Number for the beneficiary

• May only be opened after an institution opens at least one master account with UESP

Account withdrawals must be used to pay for qualified higher education expenses.A governmental entity or tax-exempt 501(c)(3) organization may contact UESP about master or scholarship accounts, to request forms, or to ask other scholarship program-related


10 July 14, 2017

questions by emailing [email protected] or calling UESP toll-free at 800.418.2551.For a scholarship account opened by UESP (e.g., for scholarship recipients):

• UESP will be the account owner• A parent, guardian, or other third party may be authorized

to view information about the account and perform certain actions on behalf of the beneficiary

• Only one beneficiary may be designated for the accountFor children’s savings account (CSA) programs, typically for low- or moderate-income families:

• A sponsor organization may be the account owner. If a sponsor organization is the account owner, an account agent will be designated to act on behalf of the account and beneficiary

• If a parent/beneficiary is the account owner, he or she will act as the account agent

• The account agent will establish the account by submitting a Scholarship Account Agreement (form 106)

• Only one beneficiary may be designated for the account

CHANGING THE BENEFICIARYSection 529 allows an individual account owner or institutional account agent to change the beneficiary without adverse income tax consequences, as long as the new beneficiary is a member of the family of the previous beneficiary. The beneficiary of an UGMA/UTMA account cannot be changed.

Member of the Beneficiary’s FamilySection 529 defines a member of the family as:

• The father, mother, or ancestor of either• A child (including a legally adopted child) or descendant

of a child• A stepfather or stepmother• A stepson or stepdaughter• A brother, sister, stepbrother, stepsister, half-brother,

or half-sister• A brother or sister of the father or mother• A brother-in-law, sister-in-law, son-in-law, daughter-in-law,

father-in-law, or mother-in-law• A son or daughter of a brother or sister• A spouse of the individuals mentioned above• A spouse of the beneficiary• A first cousin

Federal gift, estate, and generation-skipping transfer tax consequences may result from a beneficiary change. Consult a tax advisor about the possibility of gift, estate, and generation-skipping transfer taxes in connection with a beneficiary change.UESP will revoke limited power of attorney authority granted by an account owner to a financial advisor/tax advisor if the account beneficiary is changed.

Beneficiary changes may be made only by submitting a Beneficiary Change/Correction form (form 510). The investment option in an existing account can be changed when the beneficiary on the account changes. Funds in an age-based investment option will be moved, if appropriate, to the allocation that corresponds to the new beneficiary’s age. UESP reserves the right to suspend processing of a beneficiary change if it suspects that such change is being requested for reasons other than those intended by Section 529.

Not a Member of the Beneficiary’s FamilyUESP will not process a Beneficiary Change/Correction form (form 510) for an intended beneficiary who is not a member of the current beneficiary’s family. Instead, the account owner/agent should liquidate the account by submitting a Withdrawal Request form (form 300), and marking the withdrawal as nonqualified. No withdrawal can be made from an UGMA/UTMA account other than for the benefit of the beneficiary.The Internal Revenue Service (IRS) views liquidating funds in a UESP account as a nonqualified withdrawal if the intended beneficiary is not a member of the current beneficiary’s family.Earnings on the account will be subject to federal and state income taxes, including a recapture (addback) of any previously claimed Utah state income tax credits or deductions and a 10 percent federal tax penalty on the earnings.

Beneficiary Age-Change Limitations for Utah State Income Tax BenefitsIf a Utah taxpayer account owner/agent changes an account’s beneficiary from someone who was younger than age 19 at the time the beneficiary was designated on the account to someone who is age 19 or older, the account owner must recapture (add back) Utah state income tax credits or deductions claimed in any prior tax year. These taxes must be paid in the year such a change is made. If the beneficiary change occurs in the same tax year, no Utah state income tax credit or deduction is allowed.This beneficiary change, considered a nonqualified transfer for Utah state income tax purposes, is reported on Utah state tax form TC-675H, Utah Educational Savings Plan Tax Statement for Contributions, Withdrawals and Transfers, which is sent to the Utah account owner and the Utah State Tax Commission. See Part 9 | Tax Considerations for more information.

Circumstances Exempt from Tax PenaltiesUnder certain circumstances, Section 529 allows an account owner/agent to take a nonqualified withdrawal that is not subject to the 10 percent federal tax penalty on account earnings. The circumstances also permit a nonqualified withdrawal under Utah state tax law without requiring a recapture (addback) of any previously claimed Utah state income tax credits or deductions. Allowable circumstances include the beneficiary’s death, disability, receipt of a scholarship (up to the amount of the scholarship), or attendance at a U.S. service academy. However, the earnings portion of such nonqualified withdrawals will be subject to federal income taxes and may be subject to state income taxes.



Instead of taking a nonqualified withdrawal, the account owner/agent may choose to transfer money in the account to another qualified beneficiary who is a member of the family of the previous beneficiary. In the case of a scholarship, money in the account may be used for other qualified higher education expenses not covered by the scholarship.In the case of a scholarship, Section 529 allows the account owner/agent to take a nonqualified withdrawal up to the amount of the scholarship without the 10 percent federal tax penalty on the earnings. However, the earnings portion of the withdrawal will be subject to federal income taxes and may be subject to state income taxes.

SELECTING AN INVESTMENT OPTIONWhen opening an account, the account owner/agent must select one of UESP’s 14 investment options. Only one investment option can be selected for each account, and all contributions to the account will be invested in accordance with the investment option chosen. If the account owner/agent does not select an investment option, any contribution will be invested in the FDIC-Insured investment option.The following is a list of UESP’s investment options. See Part 7 | Investment Information for more details.

Age-Based Investment Options• Age-Based Aggressive Global• Age-Based Aggressive Domestic• Age-Based Moderate• Age-Based Conservative

Static Investment Options• Equity—100% Domestic• Equity—30% International• Equity—10% International• 70% Equity/30% Fixed Income• 20% Equity/80% Fixed Income• Fixed Income• Public Treasurers’ Investment Fund• FDIC-Insured

Customized Investment Options• Customized Age-Based• Customized Static

The four age-based investment options automatically reallocate the account balance to be weighted less in equity funds and more in fixed-income funds and/or the FDIC-insured accounts as the beneficiary ages. The Customized Age-Based investment option automatically reallocates the account balance as determined by the account owner/agent as the beneficiary ages.

The eight static and the customized static investment options retain the same allocation regardless of the beneficiary’s age status.Investment options for existing accounts can be changed at a later date, but the IRS limits the number of changes to two per calendar year for a beneficiary.

CONTRIBUTING TO AN ACCOUNTA contribution can be made to an account in the following ways:

• One-time or recurring electronic contribution from a checking or savings account1

• Check• Wire transfer• Payroll• Online bill pay• Rollover• Internal transfer from another UESP account• Special occasion electronic contribution• Gift Program• Utah state individual income tax refund2

Notes1 A one-time or recurring electronic contribution to a UESP UGMA/UTMA account

may not be set up online. One-time or recurring electronic contributions may be established only when the UGMA/UTMA account is opened by submitting the UGMA/UTMA One-Time or Recurring Contributions Authorization section of the UGMA/UTMA Account Agreement (form 104), or at any time by submitting the One-Time or Recurring Electronic Contributions Authorization/Change form (form 200). Documentation showing the funding source (e.g., a voided UGMA/UTMA check or bank statement) must be submitted with the form.

2 Utah state income tax refunds may be deposited only in individual accounts.

See Part 4 | Contributions to learn more about contributing to an account. See Part 5 | Rollovers and Transfers to learn more about contributing through rollovers and fund transfers.

CHANGING ACCOUNT CONTACT INFORMATIONUESP sends quarterly account statements and other communications that may contain confidential personal and account information to the mailing address or email address of record provided by the account owner/agent. To ensure proper delivery, an account owner/agent will provide UESP with an updated mailing address, email address, and other information whenever the account contact information changes. Account information, including a mailing address or email address, may be changed any time online at uesp.org, by submitting an Account Information Change form (form 500), or calling UESP toll-free at 800.418.2551.

CLOSING AN ACCOUNTAn account owner/agent may submit a written request to close his or her account(s). If any balance remains in the account, the account owner/agent must submit a Withdrawal Request form


12 July 14, 2017

(form 300) to withdraw any remaining money before the account can be closed.UESP reserves the right to close any account with a zero account balance any time without the express permission of the account owner/agent.See the Information Subject to Change section in Part 11 | Other Legal and Administrative Information for other reasons why UESP may close an account.

Inactive or Abandoned AccountsUESP will consider an account inactive if (1) there have been no account owner/agent-initiated transactions or changes to an account for more than one year, and (2) the account owner/agent cannot be located and quarterly account statements to the account owner/agent are returned to UESP as undeliverable by the U.S. Postal Service for four consecutive quarters. If this occurs, UESP will discontinue mailing an account’s quarterly statement.Before an account is designated as “abandoned,” UESP will exhaust all reasonable efforts to contact the account owner. If the account owner cannot be reached for four quarters after the account is considered inactive, UESP reserves the right to contact the primary successor account owner, secondary successor account owner, and/or beneficiary to locate the account owner, and to confirm the account has not been abandoned. If UESP determines the account has been abandoned, (1) the account balance will be liquidated and remitted to Utah’s Unclaimed Property Division, and (2) the account will be closed.The account owner will be responsible for paying (1) any applicable federal and state income taxes, (2) the 10 percent federal tax penalty on earnings associated with the liquidation and remittance to the Utah Unclaimed Property Division, and any recapture (addback) of the Utah state income tax credit or deduction. The account owner/agent must follow the procedures of the Utah Unclaimed Property Division to retrieve the remitted funds.

MANAGING AN UNUSED ACCOUNT BALANCEThe account owner/agent has the following choices if an account has a balance that will not be used for the beneficiary’s qualified higher education expenses:

• Keep the balance in the account to be used for future qualified higher education expenses of the beneficiary, such as graduate school.

• Withdraw the remaining balance and close the account. This will be considered a nonqualified withdrawal, and the earnings portion will be subject to federal and state income taxes, a 10 percent federal tax penalty on the earnings portion of the account, and recapture (adding back) of any previously claimed Utah state income tax credits or deductions.

• For circumstances exempt from tax penalties and/or recapture, please see pages 10 and 25 Circumstances Exempt from Tax Penalties, and pages 52-53 Circumstances Exempt from Tax Recapture.

• An account owner/agent of an individual or institutional account may also change the beneficiary on the account or transfer the balance to the account of another beneficiary. In each case, the new beneficiary must be a member of the family of the previous beneficiary. See Key Terms for a definition of member of the beneficiary’s family.

Note: If a Utah taxpayer account owner/agent designates a new beneficiary who is age 19 or older when the account is opened, the account owner/agent must recapture (add back) any Utah state income tax credits claimed in any prior tax year. The beneficiary of an UGMA/UTMA account may not be changed.

TIMING OF TRANSACTIONSUESP makes all reasonable attempts to complete account transactions and requests in a timely manner. Most requests received in good order during UESP’s hours of operation will usually be completed within three business days. However, UESP offers no guarantee about the timing of account setup, changes, investments, withdrawals, confirmations, or other transactions.UESP is not responsible for market fluctuations during the processing period.The unit price(s) used to determine the amount of a transaction for an account will be equivalent to the closing price of a share of the respective underlying investment(s) in the account on the same business day that the transaction is completed, such as the day a contribution or a withdrawal is posted to the UESP account. The closing price of a share of the underlying investment is determined after the close of market trading on that day (normally 4 p.m. ET).An account owner/agent with a pending investment option change may not open an additional account with the same account owner and beneficiary combination until the pending investment option change is completed.UESP does not guarantee that a transaction received on the last day UESP conducts business for that year will be completed on that day. See 2017 Year-End Deadlines for more information.

Limitations on Investment DirectionSection 529, the IRS, and the U.S. Department of the Treasury limit investment direction by an account owner/agent on 529 plan accounts. In addition, an account owner/agent may not request the exact date or timing of the investment of a contribution, the completion of a withdrawal or transfer, or an investment option change. After a request is received, a transaction will occur in accordance with regular UESP procedures. Management of all money in UESP is the responsibility of the UHEAA Board.

Cancelling Transaction RequestsIf an account owner/agent decides to cancel a transaction request, UESP will make reasonable efforts to stop the processing as long as the cancellation request is received



in a timely manner. In some cases, a transaction may not be cancelled or a cancellation deadline may have expired. UESP is not responsible for any consequences from processing a transaction that could not be stopped or cancelled.

MANAGING AN ACCOUNT ONLINEUESP’s website, uesp.org, offers an account owner/agent several features to manage his or her account online. An account owner/agent can establish online access to an account by visiting uesp.org, selecting Account Access, and following the instructions.An account owner/agent should never disclose his or her online Account Access information to anyone.

Shared Access/Interested PartiesAn account owner/agent may grant read-only online Account Access to one or more of his or her accounts to one or more interested parties. Once interested-party Account Access is established, the interested party will have read-only online access to account numbers, transaction history, account owner/agent and beneficiary names, contact information, successor account owner names, investment options, account balances, and quarterly account statements.The account owner/agent can specify which UESP accounts each interested party can view. The interested party may not make changes to an account or initiate a transaction. The account owner/agent can turn off shared access/interested party access at any time.For security purposes, UESP will not give account information to an interested party through any other means. An interested party can view an account online only at the discretion of the account owner/agent. If the account’s owner/agent changes, all shared access/interested party access will be terminated.

Limited Power of AttorneyAn account owner/agent may grant an entity or an individual limited power of attorney authority to obtain information about a beneficiary’s account(s) and to perform specific acts on the account owner/agent’s behalf. Limited power of attorney authority may be granted to a financial/tax advisor or other entity or individual designated by the account owner/agent. The account owner/agent continues to control the account and may perform any of the actions the entity or individual is granted permission to perform. Each account may have only one entity or individual with limited power of attorney authority. The limited power of attorney continues in effect until the account owner/agent revokes it or the account owner/agent or beneficiary changes on the account.UESP will revoke limited power of attorney authority granted by an account owner to a financial advisor/tax advisor if the account beneficiary is changed.An account owner may grant limited power of attorney by (1) submitting limited power of attorney forms (available at uesp.org, advisor.uesp.org, or by calling UESP toll-free at 800.418.2551) or (2) through Account Access at uesp.org.

Updating Contact InformationIf an account owner/agent submits documentation, such as a UESP form, or makes an online transaction with new or different contact information (address, telephone number, or email address) that does not match the contact information initially submitted when the account was set up, UESP will (1) add the new information to the account owner/agent’s contact information of record in UESP’s files, or (2) replace the previously submitted contact information with the new contact information. UESP will notify an account owner/agent when an address is updated.

Online Features

Log in to your account at uesp.org to access these features:

My Accounts • Change Investment Options• Withdrawals• Transfers• Add New Account• Quicken®

Manage Contributions • Recurring Electronic Contributions• One-Time Electronic Contribution• Special Occasion Contributions• Electronic Funds Transfer History• Manage Linked Bank Accounts

Gift Program • Manage Gifting• Gifting FAQs

Payroll Contribution • Set Up/Change Payroll Contribution

Records • Quarterly Account Statements• Tax Forms• Account Certificates

My Profile • Change Account Owner Info• Change Delivery Method• Change Email Address• Change Password• Change Username

Shared Access/Interested Parties• Interested Parties• Limited Power of Attorney

4

14 July 14, 2017

This section identifies who may contribute to a Utah Educational Savings Plan (UESP) account on a

beneficiary’s behalf. The section also describes various methods for contributing to an account, and specifies the related tax deadlines. Information is included about the maximum allowable aggregate account balance.

BEFORE CONTRIBUTINGIn addition to reading this section, the account owner/agent should read Part 7 | Investment Information before contributing to an account. See Part 5 | Rollovers and Transfers for details about funding an account through a rollover or transfer.UESP makes all reasonable attempts to complete account contributions in a timely manner. Most contributions received in good order will usually be completed within three business days. However, UESP does not guarantee when contributions are completed.UESP is not responsible for market fluctuations during the processing period. Any earnings on a contribution during the processing period before an account receives the money will accrue to UESP to defray administrative and operating expenses.The unit price(s) (see Key Terms) used to establish the amount contributed to an account are determined by the value of the respective underlying funds and calculated after the close of market trading on each business day (normally 4 p.m. ET).If an account owner/agent who owns multiple accounts submits a contribution without specifying how to allocate the money among the accounts, the contribution will be deposited in equal amounts into each account owned by the account owner.Confirmation of the receipt and posting of any contributions will be acknowledged on the account owner/agent’s next quarterly account statement. The account owner/agent can also check the account online at uesp.org to see that the contribution was received and posted.Except for one-time and recurring electronic contributions and payroll contributions, UESP will, upon request, provide a receipt to the contributor for a contribution.For information on how to make a five-year averaging gift election of $70,000 ($140,000 for married couples), see Part 9 | Tax Considerations.

Contributions by People Other than Account OwnersAnyone can contribute to a UESP account, regardless of who owns the account. If a person contributes to an account he or she does not own, he or she (1) cannot control how the contribution

is invested, (2) will have no future control over the use of the contribution, and (3) may be ineligible for state or federal tax benefits to which he or she otherwise might be eligible if he or she had contributed to his or her own 529 account.A Utah taxpayer may not claim Utah state tax benefits for a contribution made to an account for which he or she is not the account owner.

Contribution RestrictionsAll contributions to an account must be cash-equivalent contributions in U.S. dollars. All checks must be clear and in good order.UESP will not accept cash, credit cards, debit cards, checks drawn on non-U.S. banks, or any other check UESP deems unacceptable. Section 529 of the Internal Revenue Code (IRC) also prohibits contributions in the form of securities. UESP only accepts a third-party check if it is properly endorsed to UESP.

Minimum Contribution and Account BalanceUESP does not require a minimum amount to be contributed to or maintained in an account. However, UESP reserves the right to close an account with a zero balance at any time without the express permission of the account owner.

Maximum Aggregate Account BalanceSection 529 requires UESP to set a limit on the maximum aggregate account balance for a single beneficiary. UESP’s current limit is $430,000, which reflects the maximum estimated qualified higher education expenses of an undergraduate and graduate degree, including room and board.This amount may be adjusted as needed by UESP, based on the maximum estimated cost of qualified higher education expenses for four years of undergraduate school, plus two years of graduate school, at the highest-cost public or private eligible educational institution in the United States.UESP will accept contributions for a beneficiary until all UESP account balances for that beneficiary reach $430,000. It is possible that balances may exceed $430,000 because of market performance. Contributions or portions of contributions that exceed this maximum will be returned to the contributor.

P A R T 4 | C O N T R I B U T I O N S

Part 4 | Contributions


Contributions Received Without Proper DocumentationUESP will not process contributions that are not in good order. UESP will attempt to notify the contributor if the contribution is not processed.A contribution submitted to UESP with incomplete or inaccurate documentation may be deposited to a clearing account and held for up to 30 calendar days. Neither the contributor nor the account owner will receive any investment return while the money remains in the clearing account.If accurate documentation is not received within 30 calendar days, the money in the clearing account will be returned to the contributor without any earnings. If accurate and complete documentation is received within 30 calendar days, the contribution will be deposited into the account owner’s account. Only after funds have been moved from the clearing account to the owner’s account are the funds eligible to receive any investment return.Money from a check deposited in the clearing account cannot be returned to the contributor until seven business days have passed, to ensure that the funds have cleared the contributor’s financial institution.

Returned Checks and Rejected Electronic ContributionsA $20 fee may be assessed for a returned check or rejected one-time or recurring electronic contribution against an account that received the attempted contribution. If the account owner has multiple accounts, the fee is charged proportionately among the accounts that received the rejected contribution. The account(s) also may be charged for market losses or other expenses UESP may incur. UESP will retain any earnings or dividends.UESP reserves the right to cancel any scheduled one-time or recurring electronic contributions to a UESP account. In most cases, an account with two consecutive rejected one-time or recurring electronic contributions, or two rejections within a six-month period, will have the scheduled contributions cancelled.

Utah State Income Tax Benefits for ContributionsAn account owner who is a Utah taxpayer may be eligible for Utah state income tax benefits each year a contribution is made to his or her account. An account owner may claim the state tax benefit for each beneficiary for whom he/she has a UESP account. See Part 9 | Tax Considerations for tax-benefit eligibility and other information.

CONTRIBUTION METHODS

Online Contribution

An account owner/agent may authorize and set up one-time or recurring electronic contributions online at uesp.org from his or her checking or savings account to a UESP account.If a one-time or recurring electronic contribution request is made with an Account Agreement for a new UESP account, the contribution usually will be completed within three business days after the UESP account is opened.UESP does not charge transaction fees for one-time and recurring electronic contributions. However, a contributor should ask his or her financial institution whether it charges any fees for such transactions.Only a checking or savings account owned by the contributor from a financial institution may be used for one-time and recurring electronic contributions. An electronic contribution from a brokerage or mutual fund account may not be used to fund a UESP account and will be rejected. Any fees and market losses due to a rejected electronic contribution may be charged to the UESP account.

One-Time Electronic Contribution 1

An account owner/agent can make a one-time electronic contribution online at uesp.org or by submitting a One-Time or Recurring Electronic Contributions Authorization/Change form (form 200). Other contributors (e.g., friends, relatives, etc.) can make a one-time electronic contribution by submitting form 200. A request for a one-time electronic contribution to an existing UESP account will usually be completed within three business days.Online. The account owner/agent can complete an electronic contribution online by logging in to his or her UESP account at uesp.org and selecting Manage Contributions. The account owner/agent will be asked to provide required bank account information to UESP.

Contribution Methods• One-time electronic

• Recurring electronic

• Check

• Wire transfer

• Payroll

• Online bill pay

• Incoming rollover

• Internal transfer from another UESP account

• Special occasion electronic

• Gift Program

• Utah state individual income tax refund


16 July 14, 2017

One-Time or Recurring Electronic Contributions Authorization/Change form (form 200). The account owner/agent or other contributor must indicate the dollar amount of the bank contribution on form 200. To ensure that UESP has accurate bank account and routing number information, a voided check or preprinted savings withdrawal slip must accompany form 200. The form will be returned to the account owner/agent or other contributor if it is submitted without a voided check or slip. Only one signature is required on form 200 if the bank account is set up as Joint Tenants with Rights of Survivorship. Both bank account owners’ signatures are required if the account is set up as Joint Tenants in Common.See Notes on page 17.

Recurring Electronic Contribution 1An account owner/agent can set up recurring electronic contributions online at uesp.org or by submitting the One-Time or Recurring Electronic Contributions Authorization/Change form (form 200). Other contributors can make recurring electronic contributions using form 200. UESP allows a bank account owner to select one or two dates from the 1st to the 28th of a month.The contributed funds normally will be debited from the account owner/agent’s bank account within three business days after the contribution is posted to the account owner/agent’s UESP account.Online. The account owner/agent can set up a recurring electronic contribution schedule online by logging in to his or her account at uesp.org and selecting Manage Contributions. The account owner/agent will be prompted to provide required bank account information. A recurring electronic contribution must be scheduled to start within 60 calendar days.One-Time or Recurring Electronic Contributions Authorization/Change form (form 200). On form 200, an account owner/agent or other contributor should indicate the dollar amount contributed from the bank account, the month the contribution(s) are to begin (no more than 60 calendar days from the submission of the form), and the day(s) of each month that the contribution(s) should be made. If no date is selected, the contribution will be made on the 25th of each month.See Notes on page 17.

Change or Cancel a Scheduled Electronic Contribution An account owner/agent can change or cancel a scheduled electronic contribution at uesp.org or by using form 200. Third-party contributors can change or cancel one-time or recurring electronic contributions by submitting form 200. An account owner or a third-party contributor may also call UESP to cancel a one-time or recurring electronic contribution request.Online. To change or cancel a scheduled electronic contribution online, the account owner/agent should log in to his or her UESP account at uesp.org and select Manage Contributions. The account owner/agent can edit the contribution schedule. A change or cancellation must be made before 2 p.m. MT, on the business day of the scheduled contribution date.

One-Time or Recurring Electronic Contributions Authorization/Change form (form 200). An account owner can change or cancel an existing scheduled electronic contribution using form 200. The form may be mailed or faxed (along with any attachments) to UESP. The request must be received by UESP at least three business days before the scheduled contribution date.

CheckUESP accepts contributions made by check, including checks from a mutual fund account. An account owner/agent should make the check payable to UESP. The UESP account number and beneficiary name must appear on the front of the check. The contribution check should be mailed to: UESP, PO Box 145100, Salt Lake City, UT 84114-5100.UESP will accept a third-party check (such as a check made payable to the account owner or beneficiary) if the back of the check is endorsed as “payable to UESP” and includes the payee’s signature.A UESP Gift Notice to inform the beneficiary that a contribution has been made to his or her account is available in the Forms, Documents, Downloads, Requests section at uesp.org.

Wire TransferA contributor must initiate a wire transfer at his or her own financial institution. In addition to any forms that the contributor’s financial institution may require, the contributor must complete UESP’s Wire Transfer Notification form (form 225).A $15 fee will be charged to the UESP account for each wire transfer. If wired funds are sent to multiple UESP accounts, the fee will be split equally among the accounts. The contributor’s financial institution may also charge a fee.To make a wire transfer, the contributor should:

1. Follow the instructions on the Wire Transfer Notification form (form 225)

2. Call UESP toll-free at 800.418.2551 for the information required to complete the transfer

3. Provide the UESP account number(s) on the wire transfer document used by the contributor’s financial institution

4. Fax the completed Wire Transfer Notification form (form 225) to UESP toll-free at 800.214.2956

Payroll An account owner/agent may elect to contribute to his or her UESP account(s) by payroll contribution if his or her employer supports multiple direct deposits of payroll funds. A payroll contribution is made with after-tax dollars. The account owner/agent is responsible for providing his or her employer any change to or cancellation of instructions for payroll contribution. The employer is responsible for sending the employee’s payroll contribution to UESP electronically. The contribution will not be invested until it is received by UESP. Contact UESP or visit uesp.org for more details.



Online Bill Pay 2UESP accepts payments from financial institution online bill-pay services. These payments originate at the financial institution and are sent to UESP. An account owner/agent should:

• Set up each UESP account as a separate online bill payment• Put his or her UESP account number in the payee account

number field and the beneficiary’s name in the payment description field

See Notes on this page.

Incoming Rollover from another 529 PlanSee Part 5 | Rollovers and Transfers for information about rolling over funds into a UESP account from another 529 plan.

TransfersSee Part 5 | Rollovers and Transfers for information about transferring funds between existing UESP accounts, or from liquidated UGMA/UTMA funds, Coverdell Education Savings Accounts, or U.S. Savings Bonds.

Special Occasion Electronic Contribution 2An account owner/agent can celebrate birthdays, holidays, or other annual events in the life of a beneficiary by setting up an annual special occasion electronic contribution online at uesp.org under Account Access. On the selected days each year, money will be automatically pulled from the contributor’s checking or savings account and contributed to the beneficiary’s UESP account. One week before the appointed day, UESP will send the account owner/agent an email reminder of the upcoming contribution.See Notes on this page.

Gift Program2

UESP allows an account owner/agent to invite family members and friends to make contributions on behalf of a beneficiary. To simplify the process, UESP created the Gift Program. A UESP account owner/agent can enroll in the Gift Program at uesp.org through Account Access. Once enrolled, the account owner/agent can invite family and friends to contribute a gift to his or her UESP account. The invitation is sent out electronically and gives directions on how to easily and securely make a contribution. Gift contributions can be made with a check or electronically.Contributions made via the Gift Program are unavailable for withdrawal or transfer for up to 20 business days if the account has been open for less than 180 calendar days. If the account has been open for 180 days or more, contributions made via the Gift Program will be unavailable for withdrawal or transfer for up to four business days if made online at uesp.org and up to seven business days if made by check.

Anyone can contribute a gift to a UESP account. However, only the account owner/agent can change the account’s investment option or withdraw money from the account. Only the account owner can claim any tax benefits related to the account, regardless of who contributed.A gift contribution may have gift tax consequences. Contributors should consult a tax advisor.See Notes below.

Utah State Individual Income Tax Refund3

A Utah taxpayer may contribute all or a portion of his or her Utah state income tax refund to his or her individual UESP account(s).See Notes below. Also, see Part 9 | Tax Considerations to learn more.Notes1 One-time or recurring electronic contributions to an UGMA/UTMA account may

not be authorized and set up online. Such contributions may be established when the UGMA/UTMA account is opened by completing the UGMA/UTMA One-Time or Recurring Electronic Contributions Authorization section of the UGMA/UTMA Account Agreement (form 104), or by submitting the One-Time or Recurring Electronic Contributions Authorization/Change form (form 200) with documentation showing the funding source (e.g., a voided UGMA/UTMA check or bank statement). Special rules may apply for some contribution methods.

If you have any questions about UGMA/UTMA accounts, call UESP toll-free at 800.418.2551.

2 This contribution method is only for individual and institutional accounts.3 Utah state income tax refunds may only be deposited in individual accounts.

2017 YEAR-END CONTRIBUTION DEADLINESSee 2017 Year-End Deadlines. Any contribution received after these deadlines will not be eligible for the Utah state income tax credit or deduction for tax year 2017. A mailed contribution postmarked in 2017, but received by UESP in 2018, will not count as a contribution for 2017 and will be recorded as a 2018 tax-year contribution.A contribution sent to UESP as part of a new account must include all necessary paperwork and documentation for that account to be opened. A contribution sent at the end of the year that does not include all necessary documentation to be considered in good order may not be credited to the account owner’s account for that year.UESP cannot guarantee that any new one-time or recurring electronic contribution, online bill pay, payroll, or Gift Program contributions received at the end of the tax year will be processed in that tax year. However, as long as a contribution is in the UESP office before close of business on the last business day of operation for the calendar year, it will count for tax purposes even though it may not be invested until the following January.A request should be sent to UESP as early as possible to ensure that the transaction will be completed for the current tax year.


18 July 14, 2017

UESP cannot guarantee that any new one-time or recurring electronic contribution, online bill pay, payroll, or Gift Program contributions received at the end of the tax year will be processed in that tax year. However, as long as a contribution is in the UESP office before close of business on the last business day of operation for the calendar year, it will count for tax purposes even though it may not be invested until the following January. A request should be sent to UESP as early as possible to ensure that the transaction will be completed for the current tax year.

Tips for a Successful Year-End Contribution• Make checks payable to UESP.

• Clearly write the UESP account number and beneficiary’s name on the check to ensure proper processing.

• Ensure adequate time if mailing a contribution.

• Plan enough time to find parking if hand delivering a contribution.

• Contribute online at uesp.org.

See 2017 Year-End Deadlines. Page 60

5Part 5 | rollovers and transfers


This section reviews rules that govern how funds may be rolled over between a Utah Educational Savings Plan

(UESP) account and a 529 plan in another state. Also discussed are transfers of funds between existing UESP accounts and transfers into UESP accounts from other types of savings vehicles, such as Uniform Gifts to Minors Act/Uniform Transfers to Minors Act (UGMA/UTMA) accounts, Coverdell Education Savings Accounts (ESAs), and qualified U.S. Savings Bonds.

For more information regarding rollovers or transfers from other 529 plans, Coverdell ESAs, or U.S. Savings Bonds, see Internal Revenue Service (IRS) Publication 970, Tax Benefits for Education.

ROLLOVERSAn account owner/agent should consider the following before rolling over money from one 529 plan to another:

• IRS rules state that funds may be rolled over to another 529 plan once every 12 months for the same beneficiary, or any time for a different beneficiary, as long as the different beneficiary is a member of the family of the previous beneficiary.

• If funds withdrawn from one 529 plan are rolled over within 60 calendar days to another 529 plan for the benefit of the same beneficiary or a member of the beneficiary’s family, the IRS considers it an allowable rollover.

For a list of individuals considered members of the beneficiary’s family, see Key Terms.

Incoming Rollover from Another 529 PlanTo roll over funds from another 529 plan to UESP, a person must first open a UESP account and then contact the 529 plan currently holding the funds. The source 529 plan may require the person to complete additional paperwork to initiate the rollover. The account owner/agent may either (1) liquidate the account with the other 529 plan and submit the balance to UESP within 60 days using the UESP Liquidated Funds Transfer form (form 215), or (2) if the source 529 plan allows it, submit the UESP Incoming Direct Rollover form (form 210) to initiate the rollover. A rollover received from another 529 plan must include documentation clearly showing the portion that is principal (basis) and the portion that is earnings, if any. Federal law requires that a rollover received by UESP that does not include this documentation be considered entirely earnings.

Tax Considerations for an Incoming RolloverUtah taxpayer residents who roll over funds into UESP from a 529 plan in another state are eligible for Utah state income tax benefits. See Part 9 | Tax Considerations for more information.Non-Utah taxpayers and residents: You should determine whether the state in which you or your beneficiary pays taxes or lives offers a 529 plan that provides state tax or other benefits not otherwise available to you by investing in UESP. You should consider such state tax treatment and benefits, if any, before investing in UESP. You should also consider whether a rollover may result in recapture (addback) of any previously claimed state tax benefits in another state.

Outgoing Rollover to Another 529 PlanAn account owner/agent may request to roll over funds to another 529 plan by submitting a UESP Withdrawal Request form (form 300) or an applicable rollover request form from the receiving 529 plan. The account owner/agent must date and sign the request. He or she must include the amount to be rolled over, to whom the check should be made payable, and where it should be sent. UESP will provide information to the receiving 529 plan that specifies which portion of the rollover is principal and which portion is earnings, if any.If the entire account balance is rolled over, UESP will stop scheduled contributions and close the account.See Part 6 | Withdrawals, Withdrawing Funds from Multiple Accounts to learn how UESP treats a rollover to another 529 plan if funds are rolled out of accounts with the same account owner, same beneficiary, and same account type.The account owner/agent is responsible for maintaining records showing that money was rolled over to another 529 plan.

Signature GuaranteeSome rollover requests may require a signature guarantee, which is a stamped or typed assurance by a financial institution that indicates a signature is valid. A signature guarantee can be obtained at most financial institutions, including banks, credit unions, and brokerage firms.A signature guarantee is required for:

• A single rollover request of $50,000 or more• A single rollover combined with withdrawal requests totaling

$50,000 or more for the same beneficiary within a rolling period of 90 calendar days

P A R T 5 | R O L L O V E R S A N D T R A N S F E R S

Part 5 | rollovers and transfers

20 July 14, 2017

• A rollover request within 10 calendar days of an account owner change

• Any transaction request with a signature on the form that does not match the account owner’s signature on file

Requests requiring a signature guarantee must be mailed to UESP with the original signatures and signature guarantee stamp. Faxed signature guarantees are not accepted.UESP reserves the right to ask for a signature guarantee on any rollover.

Tax Considerations for an Outgoing RolloverIn the event of a rollover from a UESP account, UESP will issue an IRS Form 1099-Q to the account owner by January 31 of the following year. For a Utah taxpayer, UESP will also issue a Utah state income tax form TC-675H, Utah Educational Savings Plan Tax Statement for Contributions, Withdrawals and Transfers.For Utah state income tax purposes, a rollover from a UESP account to another state’s 529 plan is subject to recapture (addback) of all previously claimed Utah state tax credits or deductions in the year the rollover is made.Utah taxpayers cannot claim a Utah state income tax credit or deduction for contributions made to any other state’s 529 plan. See Part 9 | Tax Considerations for more information.

TRANSFERSTwo types of transfers are available:

• Transfers between existing UESP accounts (internal transfers)

• Transfers into UESP from another type of savings vehicleA transfer cannot include contributions that have not cleared the contributor’s bank (uncollected money), which may take up to seven business days for a check and four business days for a one-time or recurring electronic contribution.

Internal TransferAn internal transfer is a transfer of funds between UESP accounts.Note: Money in an UGMA/UTMA account cannot be transferred to an account of another beneficiary or to a non-UGMA/UTMA account of the same beneficiary.Internal transfers between accounts owned by the same account owner/agent can be made online at uesp.org or by submitting an Internal Transfer form (form 400).Transfers between accounts owned by different account owners/agents can be made only by submitting form 400.Internal transfer requests must be signed and dated by the account owner/agent from whose account the funds will be transferred. Requests must indicate the amount to be transferred. The completion of an allowable transfer request will be acknowledged on the next quarterly account statement.

The account owner/agent may also check his or her account online at uesp.org under Account Access to verify that the transfer has been processed. Upon request, UESP will provide confirmation to the account owner/agent before the next quarterly account statement is issued. Internal transfers are not counted as contributions for Utah state income tax benefit purposes.

Different Account Owner and/or BeneficiaryUnder certain circumstances, an account owner/agent may transfer money between existing UESP accounts that have different account owners, or beneficiaries, or both.Allowable transfer scenarios include:

• An account owner/agent who transfers money to another account owner for the same beneficiary

• An account owner/agent who transfers money to another account owner for a different beneficiary who is a member of the current beneficiary’s family

• An account owner/agent who transfers money between an account he or she owns for one beneficiary to another account he or she owns for a different beneficiary who is a member of the current beneficiary’s family

Same Account Owner and BeneficiaryThe IRS views the transfer of money between two UESP accounts as an investment option change if both the account owner/agent and beneficiary are the same.See the Changing Investment Options section in Part 7 | Investment Information to learn more.

Full-Balance TransferAn account owner/agent may request a full-balance transfer online at uesp.org under Account Access. If the account owner/agent does not want the account closed, he or she must check the Leave this account open box.An account owner/agent may also request a full-balance transfer from an account through a fund transfer to another UESP account. To do so, the account owner must check the Full-balance transfer box on form 400. The account will be closed unless the Leave this account open box on the form is checked.A request to transfer more money than is in the account will be treated as a full-balance transfer, and the account will be closed.The following instructions and/or information will be cancelled or removed from the account if the account is closed:

• One-time or recurring electronic contributions• Scheduled withdrawals• Any limited power of attorney authorization• Online interested party access• Gift Program code

Transfer-Age Limitation for Utah State Income Tax Benefits If a Utah taxpayer account owner requests an allowable transfer from an account held for a beneficiary who was younger than

Part 5 | rollovers and transfers


age 19 at the time the beneficiary was designated on the account to one who was age 19 or older when the second beneficiary was designated on that account, UESP will report this transfer on Utah state income tax form TC-675H and to the Utah State Tax Commission. Any Utah state income tax credit or deduction claimed in a prior or current tax year must be recaptured (added back) in the tax year of the transfer. If this transfer occurs in the same tax year, no Utah state income tax benefits are allowed. See Part 9 | Tax Considerations for more information.

Nonallowable TransferTransferring money to a beneficiary who is not a member of the family1 of the current beneficiary is not allowable. The IRS will view the transfer as a nonqualified withdrawal, subject to federal and state income taxes, including a recapture (addback) of any previously claimed Utah state income tax credits or deductions, and a 10 percent federal tax penalty on earnings.UESP will not process nonallowable transfers submitted on form 400. The account owner/agent must withdraw his or her money by submitting a Withdrawal Request form (form 300) and indicating on the form that the withdrawal is nonqualified.1 See definition of member of the family in Key Terms.

Transfer from Other Savings VehicleUGMA/UTMA AccountsExisting noncash investments held in Uniform Gifts to Minors Act/Uniform Transfers to Minors Act (UGMA/UTMA) accounts must be liquidated before the proceeds can be contributed to an account. Consult a tax advisor to discuss possible tax consequences.The custodian must submit an UGMA/UTMA Account Agreement as the UGMA/UTMA custodian, and the account must be established separate from any other UESP account the custodian may hold for the beneficiary. See Part 3 | Program Participation Information for information on UGMA/UTMA accounts.Once funds are contributed to a UESP UGMA/UTMA account, all funds are subject to UGMA/UTMA rules. UESP is not liable for any consequences related to the improper use, transfer, or characterization of UGMA/UTMA funds by an agent or custodian. Money invested in a UESP UGMA/UTMA account may only be used by the beneficiary or on his or her behalf. Liquidating noncash assets held by an UGMA/UTMA account may result in taxable consequences. Custodians should discuss any potential tax consequences of liquidating an UGMA/UTMA account with a tax advisor before liquidating and transferring the money to UESP.

Coverdell Education Savings Account (ESA)UESP will accept the proceeds of liquidated funds from a Coverdell ESA. The proceeds will be considered 529 plan funds once UESP receives them.Coverdell ESA funds sent to UESP must include documentation from the financial institution that acted as custodian of the ESA,

showing the portion of the qualified balance that is principal and the portion that is earnings. Federal law requires that liquidated funds from an ESA that do not include this documentation be considered entirely earnings.An account owner/agent may either (1) liquidate the Coverdell ESA with the other institution and submit the funds to UESP with the Liquidated Funds Transfer form (form 215), or (2) if the delivering institution allows it, fill out the Incoming Direct Rollover form (form 210) to request that UESP initiate the transfer. Before transferring Coverdell ESA proceeds to UESP, the account owner/agent should ask the financial institution holding the funds to provide appropriate documentation to complete the withdrawal from the ESA. If the financial institution requires a letter of acceptance from UESP, it should contact UESP toll-free at 800.418.2551.

Qualified U.S. Savings BondsGenerally, an individual must pay tax on interest earned on U.S. Savings Bonds. However, he or she may be able to exclude from income the interest earned on certain qualified U.S. Savings Bonds when he or she redeems the bonds and contributes the liquidated funds to a qualified 529 tuition program such as UESP, if certain conditions are met.UESP will accept liquidated proceeds from the redemption of certain Series I or Series EE U.S. Savings Bonds issued after 1989 and purchased by an owner who was at least age 24 before the bond’s issue date. The amount of interest the bondholder may be able to exclude from income from the liquidation of a qualified U.S. Savings Bond depends on his or her modified adjusted gross income and tax filing status in the year of liquidation.Proceeds from the redemption of a qualified U.S. Savings Bond must include an account statement, or IRS Form 1099-INT, or other documentation that shows earnings from the redemption of the qualified bonds. Federal law requires that money UESP receives from the redemption of a qualified U.S. Savings Bond that does not include this documentation will be considered entirely earnings. An account owner/agent should consult a tax advisor regarding the rules regulating the redemption of a qualified Savings Bond and any potential tax consequences resulting from the redemption.

6Part 6 | WithdraWals

22 July 14, 2017

This section describes how an account owner/agent may withdraw money from his or her Utah Educational Savings

Plan (UESP) account(s). The section discusses withdrawals for qualified higher education expenses incurred at eligible educational institutions. It also addresses nonqualified withdrawals that may trigger federal and state income taxes and tax penalties, as well as circumstances that may exempt nonqualified withdrawals from tax penalties.

WITHDRAWING FUNDSAn account owner/agent may withdraw funds from his or her UESP account(s) either (1) online at uesp.org under Account Access (some restrictions apply as described below), or (2), by submitting a Withdrawal Request form (form 300). Forms may be downloaded online at uesp.org or requested by calling UESP toll-free at 800.418.2551.In accordance with IRS regulations, withdrawals will be taken proportionally from both principal (basis) and earnings. Account owners cannot request that withdrawn funds be taken solely from principal or earnings.UESP will delay processing a withdrawal request if it involves contributions made by check within the past seven business days or by one-time or recurring electronic contribution within the past four business days. Action on such a withdrawal request will be delayed until those respective time periods have passed. This delay allows sufficient time for a contribution to clear and the money to be considered collected by UESP. For funds received via the Gift Program, please see page 17.For new account owners, UESP reserves the right to restrict electronic withdrawals to the checking/savings account from which the original electronic contribution was received for up to 90 days from when the account was opened.UESP makes all reasonable attempts to complete account withdrawals in a timely manner. Most withdrawal requests received in good order during UESP’s hours of operation usually will be completed within three business days. However, UESP offers no guarantee on the timing of a withdrawal. UESP is not responsible for market fluctuations during the processing period.The unit price(s) (see Key Terms) used to establish the amount withdrawn from an account are determined by the value of the respective underlying funds and calculated after the close of market trading on each business day (normally 4 p.m. ET).Payment will be issued by check or, if a qualified withdrawal is requested at uesp.org, an electronic withdrawal may be deposited into the checking or savings account of the account

owner/agent or beneficiary. A request for any other method of payment cannot be honored.Depending on the investment option of an account, withdrawals may affect the dividends allocated to the account. Before requesting a withdrawal, read Part 7 | Investment Information to determine how the request may affect the account.

Account Owners Should Keep Their Own Records Regarding WithdrawalsUESP is not responsible for tracking how money withdrawn from an account is used, or determining whether a higher education expense is qualified under Internal Revenue Service (IRS) rules for 529 plans. The account owner/agent or beneficiary, as applicable, is responsible for making that determination and retaining supporting documentation.Money must be withdrawn from an account in the same time period that the expenses are incurred to be considered a qualified withdrawal by the IRS.

Signature GuaranteeSome withdrawals may require a signature guarantee.A signature guarantee is a stamped or typed assurance by a financial institution that indicates a signature is valid. A signature guarantee can be obtained at most financial institutions, including banks, credit unions, and brokerage firms.A signature guarantee is required for:

• A single rollover or withdrawal request of $50,000 or more• Multiple withdrawal requests totaling $50,000 or more within

a rolling period of 90 calendar days• A single rollover combined with withdrawal requests totaling

$50,000 or more for the same beneficiary within a rolling period of 90 calendar days

• A withdrawal request within 10 calendar days of an address change for the payee (account owner or beneficiary)

• A rollover or withdrawal request within 10 calendar days of an account owner change

A withdrawal request can be made online at uesp.org under Account Access, or by submitting a Withdrawal Request form (form 300), available at uesp.org under Forms, Documents, Downloads, and Requests.

Scheduled withdrawals may only be requested at uesp.org under Account Access.

P A R T 6 | W I T H D R A W A L S

Part 6 | WithdraWals


• Any transaction request with a signature on the form that does not match the account owner’s signature on file

A withdrawal request requiring a signature guarantee must be received by UESP with the original signature and signature guarantee stamp. Faxed signature guarantees are not accepted.UESP reserves the right to ask for a signature guarantee on any withdrawal.

Eligible PayeesA withdrawal check may be made payable only to the account owner, the beneficiary, an eligible educational institution, or another qualified 529 plan. UESP will not issue a check to a third party.UESP will mail the check to the address on record if it is being sent to the account owner or beneficiary. If the check is to be mailed to an eligible educational institution, the account owner/agent must submit all necessary information during the online withdrawal request process or on form 300.An account owner/agent may also have a qualified withdrawal deposited directly into his or her or the beneficiary’s checking or savings account at a financial institution. Because the checking or savings account must be on record with UESP, this electronic withdrawal feature is only available if the withdrawal is made online at uesp.org for individual or institutional accounts.See page 24 and Part 9 | Tax Considerations for information on the IRS Form 1099-Q used to report withdrawals.

Withdrawing Funds from Multiple AccountsAn account owner with multiple accounts for the same beneficiary and of the same type (i.e., individual, institutional, or UGMA/UTMA) can withdraw funds in two ways:

• By selecting the specific account(s) from which the withdrawal will be taken (a custom withdrawal)

• By withdrawing funds proportionately from all of his or her accounts (a proportional withdrawal)

In accordance with IRS regulations, withdrawals will be taken proportionally from both principal (basis) and earnings. Account owners cannot request that withdrawn funds be taken solely from principal or earnings.If the proportional withdrawal option is selected by the account owner, UESP will aggregate withdrawals from all accounts of the same type for the same beneficiary for purposes of computing the earnings portion of any withdrawal. Proportional withdrawals can be made only from accounts with the same account owner/agent, same beneficiary, and same account type.A request to withdraw more money than is in an account will be treated as a full-balance withdrawal and the account will be closed, unless the Leave this account open box is checked when requesting the withdrawal online or submitting form 300.Please note: If account owners had previously scheduled automatic withdrawals that were to take place after July 21, 2016,

UESP will continue to proportionally withdraw funds from all accounts owned by the account owner for the same beneficiary unless the account owner cancels the scheduled withdrawal and schedules a custom withdrawal that chooses the account(s) from which funds will be taken.Withdrawals from different types of accounts for the same beneficiary must be requested separately. For example, if an account agent has both an individual account and is a custodian on an UGMA/UTMA account for the same beneficiary, the account agent must submit separate withdrawal requests for each separate account.See page 29 for information about the customized investment options, which allow an account owner/agent to customize his or her investment allocations, minimizing or even eliminating the need to have multiple accounts for a single beneficiary. As the account owner/agent builds a customized investment option, he or she should review the fees associated with each underlying investment that comprise the customized option.Custom Withdrawal Example: An account owner has three individual accounts for the same beneficiary and elects to withdraw $400 from Account 1, take a full-balance withdrawal of $6,000 from Account 2, and leave Account 3 untouched. To withdraw funds from Accounts 1 and 2, the account owner can make one online request for both accounts or submit two Withdrawal Request forms (form 300).

Account Account Type Account Balance

Amount Withdrawn

Account 1 Individual $4,000 $400Account 2 Individual $6,000 $6,000Account 3 Individual $1,200 0

Total Withdrawn: $6,400

Proportional Withdrawal Example: An account owner has two individual accounts for the same beneficiary and elects to aggregate withdrawals. Account 1 has a balance of $4,000. Account 2 has a balance of $6,000. The account owner requests a withdrawal online or submits form 300 to withdraw $1,000.Because UESP will take the withdrawal proportionately from both accounts, $400 will be taken from Account 1 and $600 will be taken from Account 2. These amounts will be combined to process the $1,000 withdrawal.

Account Account Type

Account Balance

Proportion of Aggregate Balance

Withdrawal Request

Amount Withdrawn

Account 1 Individual $4,000 40% $1,000 $400Account 2 Individual $6,000 60% $600

Aggregate Balance: $10,000 Total Withdrawn: $1,000

Withdrawing from Multiple Institutional or UGMA/UTMA AccountsRules for proportional withdrawals apply to institutional and UGMA/UTMA accounts. Account agents may make proportional


24 July 14, 2017

withdrawals from all of their accounts of the same type and with the same beneficiary.However, if an agent has an UGMA/UTMA account in addition to owning an individual account for the same beneficiary, the account balances will not be aggregated for the purpose of making a withdrawal. Separate requests must be submitted to withdraw funds from each type of account.

Withdrawing Funds from Accounts with Multiple Underlying InvestmentsWithdrawals from an account with an investment option containing numerous underlying investments will automatically be taken proportionately from those underlying investments. The account owner/agent may not direct a withdrawal to be made from the underlying investments in any way.

Full-Balance WithdrawalAn account owner/agent may request to withdraw all funds from his or her account(s). To do so, the account owner/agent must check the Full-balance withdrawal box when requesting the withdrawal online at uesp.org or submitting form 300. Unless the Leave this account open box is checked when requesting the withdrawal online at uesp.org or on the form, the account will be closed and any existing scheduled contributions and online Account Access will be cancelled.Please note: If an account owner with multiple accounts of the same type for the same beneficiary requests a full-balance withdrawal from one account and elects to aggregate withdrawals, the balance of all accounts will be withdrawn and all accounts will be closed, unless the account owner requests that the accounts remain open.A full-balance withdrawal that involves funds deposited within seven business days if contributed by check or four business days by a one-time or recurring electronic contribution will not be processed until those time periods have passed. This delay allows sufficient time for a contribution to clear and the money to be considered collected by UESP.

IRS Form 1099-QFederal tax law requires UESP to issue an IRS Form 1099-Q for the taxable year when funds are withdrawn from an account, including rollovers to another 529 plan. The person who receives the form is responsible for reporting any tax that may be owed to the IRS. See Federal Tax Penalties in this section and Part 9 | Tax Considerations for information on the IRS Form 1099-Q used to report withdrawals.Earnings do not need to be reported on federal or Utah state income tax returns as long as funds are used for qualified higher education expenses.

Individual and Institutional AccountsIf a withdrawal check was sent to the beneficiary or the eligible educational institution, UESP will mail IRS Form 1099-Q to the beneficiary by January 31 of the following year. If the

check was sent to the account owner/agent, or rolled over to another 529 plan, UESP will mail IRS Form 1099-Q to the account owner/agent.

UGMA/UTMA Accounts Because the beneficiary is considered the account owner, the beneficiary will receive IRS Form 1099-Q, regardless of the payee named on the withdrawal check.

Maintaining Expense RecordsThe account owner/agent or beneficiary, as applicable, is responsible for any filings with the IRS and for obtaining and keeping receipts or other documentation showing that withdrawals were used for qualified higher education expenses.Such information may be requested by the IRS or the Utah State Tax Commission.

Cancelling a Withdrawal RequestIf an account owner/agent submits a withdrawal request but decides to cancel the withdrawal, UESP will make reasonable efforts to stop the processing as long as the cancellation request is received in a timely manner. Some withdrawals may not allow cancellation or may have a cancellation deadline. UESP is not responsible for any consequences of processing a permissible cancellation request or processing a withdrawal that could not be stopped or cancelled.A check issued by UESP must be cashed within 180 calendar days of the issue date. After 180 calendar days, an outstanding check is invalid.

Recontributing a Refund of a Beneficiary’s Qualified Higher Education ExpensesAn account owner/agent may recontribute to his or her account a refund of qualified higher education expenses received by a designated beneficiary from an eligible educational institution if the recontribution is made no later than 60 calendar days after the date of the refund and does not exceed the refunded amount. For example, if the designated beneficiary becomes ill or has to withdraw from school for other unforeseen circumstances and is issued a refund of qualified higher education expenses (e.g., tuition, mandatory fees, room and board), the account owner may recontribute the refunded amount to his or her account for the same beneficiary within 60 calendar days of the date of the refund from the eligible educational institution to avoid income tax and tax penalties.Any recontributions will be made using the unit price(s) of the designated investment option on the same business day that the recontribution is posted to the UESP account. UESP is not responsible for market fluctuations after the withdrawal is taken from the account.

QUALIFIED WITHDRAWALThe earnings on a withdrawal used for qualified higher education expenses are exempt from federal and Utah state income taxes.



An account owner/agent and beneficiary should consult a tax advisor about any tax consequences for jurisdictions other than the State of Utah.Money must be withdrawn from an account in the same time period that the expenses are incurred to be considered a qualified withdrawal by the IRS.The account owner/agent should consult a tax advisor with questions about whether specific expenses are considered qualified higher education expenses.

Qualified Higher Education ExpensesIn general, qualified higher education expenses include:

• Tuition, mandatory fees, books, supplies, and equipment required for a designated beneficiary to enroll or attend an eligible educational institution.

• Expenses for the purchase of a computer or peripheral equipment, computer software, or internet access and related services when used primarily by the beneficiary while enrolled at an eligible educational institution.

• Room and board for students who are enrolled at least half time. Half-time enrollment is defined as half of a full-time academic workload for the course of study the student is pursuing at an eligible educational institution. Costs incurred for room and board must be reasonable and not exceed the allowance for room and board as determined by the eligible educational institution. However, if the student is residing in housing owned or operated by the institution, then the actual invoice amount for housing costs will qualify.

• Expenses for special-needs services incurred in connection with enrollment or attendance of a special-needs beneficiary.

Eligible Educational InstitutionsSection 529 defines eligible educational institutions as institutions described in Section 481 of the Higher Education Act of 1965 (20 U.S.C. Sec. 1088) that are eligible to participate in federal student aid programs under Title IV of such Act.This is usually any university, college, or trade school in the United States or abroad that participates in federal financial aid programs for students.An account owner/agent and beneficiary can determine the eligibility of a higher education institution by contacting the school directly or by visiting fafsa.ed.gov.

NONQUALIFIED WITHDRAWALFunds withdrawn from an account that are not used for qualified higher education expenses are subject to taxes and tax penalties. Examples of nonqualified expenses include transportation expenses, student loan payments, and other items not listed above as qualified higher education expenses.No federal taxes or tax penalties apply to the amount of principal (basis) contributed to the account. However, earnings on the principal are subject to income taxes and a 10 percent federal

tax penalty. Also, a Utah taxpayer must recapture (add back) any Utah state income tax credit or deduction claimed in prior years.

Federal Tax PenaltiesIf a portion of or all withdrawn funds are not used for qualified higher education expenses, the earnings portion of that amount is considered nonqualified. The person who receives IRS Form 1099-Q is responsible for:

• Adding the amount of earnings from the nonqualified portion of the withdrawal as income on his or her federal income tax return

• Paying a 10 percent federal tax penalty on the earnings from the nonqualified portion of the withdrawal

See Part 9 | Tax Considerations for more information.

Utah Tax PenaltiesIf funds withdrawn from a UESP account are not used for qualified higher education expenses and a Utah state income tax credit or deduction was claimed in any prior tax year, the account owner must recapture (add back) previously claimed Utah state income tax credits or deductions. This addition to Utah taxable income must be added in the year the nonqualified withdrawal, change, transfer, or rollover occurred. A credit or deduction is not permitted for current-year contributions that result in a nonqualified withdrawal, change, or transfer.A Utah taxpayer resident must also add the earnings from the nonqualified portion as income on his or her Utah state income tax.See Part 9 | Tax Considerations for more information.

Withholding TaxesUESP cannot withhold federal taxes, state taxes, or the 10 percent federal tax penalty from a withdrawal. The taxpayer is responsible for paying any such taxes.

Circumstances Exempt from Tax PenaltiesIn certain circumstances, Section 529 allows an account owner/agent to take a nonqualified withdrawal that is not subject to the 10 percent federal tax penalty on earnings. The same circumstances also permit a nonqualified withdrawal under Utah state tax law without recapture (addback) of any previously claimed Utah state income tax creditor deduction.Allowable circumstances include the beneficiary’s death, disability, receipt of a scholarship (up to the amount of the scholarship), attendance at a U.S. service academy, or use of the funds from the withdrawal to claim certain federal education credits such as the American Opportunity and Lifetime Learning Credits. However, the earnings portion of these nonqualified withdrawals may be subject to federal and Utah state income taxes.Rather than take a nonqualified withdrawal, the account owner/agent may choose to transfer the funds to another


26 July 14, 2017

qualified beneficiary who is a member of the family. See definition in Key Terms. In the case of a scholarship, the beneficiary may use the money for other qualified higher education expenses not covered by the scholarship.

OUTGOING ROLLOVER TO ANOTHER 529 PLANFor information about rolling over funds from UESP to another 529 plan, see Part 5 | Rollovers and Transfers.

TRANSFER BETWEEN UESP ACCOUNTSFor information about withdrawing money from one UESP account and depositing it into another UESP account, see Part 5 | Rollovers and Transfers.

2017 YEAR-END WITHDRAWAL DEADLINESSee 2017 Year-End Deadlines. An online electronic withdrawal request received by UESP in good order by 11:59 p.m. MT, on December 31, 2017, will count as a withdrawal for that tax year even though it may not be processed until the following January.UESP cannot guarantee that any withdrawal request received at the end of the tax year will be processed in that tax year.However, as long as the withdrawal request using form 300 is in the UESP office before close of business on the last business day of operation for the calendar year, it will count for tax purposes for that tax year even though it may not be completed until the following January. A request should be sent to UESP as early as possible to ensure that the transaction will be completed for the current tax year.A mailed withdrawal request postmarked in 2017 but received by UESP in 2018 will be recorded as a 2018 tax-year withdrawal.

7Part 7 | Investment InformatIon


This section gives information about the 14 investment options offered by the Utah Educational Savings Plan

(UESP). The investment options include funds managed by The Vanguard Group, Inc., Dimensional Fund Advisors LP, and the Utah Public Treasurers’ Investment Fund, as well as a Federal Deposit Insurance Corporation (FDIC)-Insured investment option held in accounts at Sallie Mae Bank and U.S. Bank (“Banks”). The section discusses risks associated with the investment options.

ABOUT THE INVESTMENT

Pooling of MoneyUESP administers a public trust and account owners own units of that trust. UESP accepts contributions from its account owners and pools those monies for investment purposes. Based on the investment options that account owners select for their accounts, UESP invests the pool of money in a combination of Vanguard and Dimensional mutual funds, the Public Treasurers’ Investment Fund, or the FDIC-insured accounts held at the Banks. UESP refers to these funds and FDIC-insured accounts as “underlying investments” or “underlying funds.”Pooling money allows UESP to use low-cost mutual fund shares for UESP investment options. In the case of the underlying FDIC-insured accounts, investments and the earnings that follow are pooled into master accounts held in trust by UESP at the Banks according to the following percentages: Sallie Mae Bank (90 percent) and U.S. Bank (10 percent).

Unit-Based OwnershipAn account owner does not own shares of, or direct interest in, the underlying investments. An account owner purchases units in

UESP by making contributions to or transfers into his or her UESP account. UESP then uses that money to purchase shares in the underlying funds and allocates UESP trust units to the account.

Market Value of UESP AccountsThe market value of a UESP account is the sum of each UESP unit multiplied by its respective unit price for each position. Although an account owner does not own actual shares of the Vanguard and Dimensional mutual funds, the Public Treasurers’ Investment Fund, or the FDIC-insured accounts, values of UESP accounts are based on the market value of the underlying investments that UESP owns. The unit prices do not reflect any UESP account fees, which are assessed on the last business day of each month and will reduce the number of UESP units in the account that day. Please refer to Part 8 | Expenses and Fees.

Rebalancing of Account InvestmentsAs a result of market gains and losses, dividend and interest earnings received by the trust, and account fees, the value of a UESP account may differ over time from the target asset allocation for each UESP investment option. To maintain the target asset allocation for the age-based investment options (Age-Based Aggressive Global, Age-Based Aggressive Domestic, Age-Based Moderate, and Age-Based Conservative), selected static investment options (Equity—30% International, Equity—10% International, 70% Equity/30% Fixed Income, 20% Equity/80% Fixed Income, and Fixed Income), and both customized investment options (Customized Age-Based and Customized Static), UESP will rebalance each applicable UESP account annually on the beneficiary’s birthday (or next available business day) to the target asset allocation. Please be aware that if the beneficiary changes, the timing of the rebalancing may be affected.

Quarterly Account StatementsUESP will provide a quarterly account statement for all accounts. The statement provides a summary of the account balances, contributions, withdrawals, rebalances, and fees paid during the calendar quarter. The statement also lists transactions that occurred in the account during the three-month period.UESP will mail the quarterly account statement to the address of record for the account owner/agent after the end of each quarter. If the account owner/agent has chosen to view the statement online rather than receive it by U.S. mail, UESP will send an email notification of availability after the end of each quarter.The account owner/agent must provide UESP a current mailing address of record and/or email address to ensure proper delivery of the statement.An account owner/agent may elect to view quarterly account statements, Program Description, Program Description Supplements, newsletters, and all other communications

ACCOUNT OWNER

UESP TRUST

UNDERLYING INVESTMENTS

$

$

UNITS

P A R T 7 | I N V E S T M E N T I N F O R M A T I O N

Part 7 | Investment InformatIon

28 July 14, 2017

online rather than receiving them in the U.S. mail. An account owner/agent who elects to view all communications online will receive an email from UESP when the quarterly account statement, Program Description, Program Description Supplements, newsletter, and all other UESP communications are available to download online at uesp.org. For more details about quarterly statements, see Part 11 | Other Legal and Administrative Information.

INVESTMENT OPTIONSUESP offers four age-based investment options, eight static investment options, and two customized investment options. Each investment option uses a different investment strategy. Risks may vary among the investment options. As the beneficiary ages, the four age-based investment options (not including the Customized Age-Based investment option) automatically reallocate account funds to be weighted less in equity funds and more in fixed-income funds and/or the FDIC-insured accounts. An account owner/agent can choose the age-based investment option that best reflects his or her risk tolerance. The Customized Age-Based investment option automatically reallocates the account balance as determined by the account owner/agent as the beneficiary ages.The eight static investment options will remain in the stated allocation unless the account owner/agent requests an investment option change. The static investment options (not including the Customized Static investment option) invest in equity funds, fixed-income funds, the Public Treasurers’ Investment Fund, and/or the FDIC-insured accounts.An account owner/agent should carefully evaluate each of the underlying investments in the context of his or her overall financial situation and investment goals, and carefully consider all investment objectives, risks, charges, and expenses before investing in any particular investment option offered by UESP. An account owner/agent should note that the expected life of a UESP account may be shorter than accounts established for other savings purposes, such as retirement.A UESP account is not backed by the full faith and credit of the State of Utah, or guaranteed by UESP, its employees, the Utah State Board of Regents, or members of the Utah Higher Education Assistance Authority (UHEAA) Board.None of the investment options provide a guarantee of any level of performance or return. An account owner/agent:

• Assumes all investment risk, including the risk of loss of principal (basis)

• Should consider the level of risk he or she is comfortable assuming, as well as the expected investment time horizon, before choosing an investment option

• Should periodically assess and, if appropriate, adjust his or her investment choices with his or her time horizon, risk tolerance, and investment objectives in mind

Some investment options invest all or a portion of account funds in the FDIC-insured accounts held in trust by the Banks. Learn more about the FDIC-insured accounts in the Underlying Investments section on page 33.The UESP Investment Option Asset Allocations Table on page 32 provides the expected allocation of the account funds in each investment option. UESP may change the investment options available to an account owner/agent or the underlying investments at any time upon approval of the UHEAA Board. UESP will notify an account owner/agent of any significant changes.

An account owner/agent should consider the risks associated with each underlying investment before making an investment option selection. For risks associated with underlying investments and UESP investment options, see:

• Investment Risks Associated with the Underlying Investments on pages 38-42

• The Summary of Primary Investment Risks Associated with Investment Options Tables on pages 41-42

AGE-BASED INVESTMENT OPTIONSAge-based investment options (not including the Customized Age-Based investment option—see Customized Investment Options on page 29) are designed to take into account the beneficiary’s age and the number of years before the beneficiary is expected to attend an eligible educational institution. The account balance is automatically reallocated to be weighted more in fixed-income funds and/or the FDIC-insured accounts as the beneficiary approaches typical college-enrollment age. See the UESP Investment Option Asset Allocations Table on page 32 for the investment allocations within the age-based investment options.Based on the selected investment option and the beneficiary’s age, account funds will be allocated into the following age brackets:Age 0-3Age 4-6Age 7–9Age 10-12Age 13-14Age 15Age 16Age 17Age 18Age 19+The money in each account will be rebalanced annually on the beneficiary’s birthday (or next available business day) to the target asset allocation for a particular age bracket within an investment option. Account funds will also be reallocated to a new age bracket based on the beneficiary’s age.

Age-Based Aggressive GlobalThe Age-Based Aggressive Global investment option begins with the highest allocations to domestic and international equity funds. As the beneficiary ages, domestic and international fixed-income funds are incorporated into the allocations. When the beneficiary reaches age 19, the allocations shift to fixed-income funds, FDIC-insured accounts, and 10 percent equities.

Age-Based Aggressive DomesticThe Age-Based Aggressive Domestic investment option begins with the highest allocation to domestic equity funds. As the beneficiary ages, domestic fixed-income funds are incorporated into the allocations. When the beneficiary reaches age 19, the allocations shift to fixed-income funds, FDIC-insured accounts, and 10 percent equities.



Age-Based ModerateThe Age-Based Moderate investment option begins with moderate allocations to domestic and international equity funds and to domestic and international fixed-income funds. As the beneficiary ages, the allocations shift away from the equity funds and into the fixed-income funds. When the beneficiary reaches age 18, the allocations shift to the fixed-income funds and FDIC-insured accounts.

Age-Based ConservativeThe Age-Based Conservative investment option begins with conservative allocations to domestic and international equity funds, and domestic and international fixed-income funds. As the beneficiary ages, the allocations shift away from the equity funds and into the fixed-income funds and the FDIC-insured accounts. When the beneficiary turns age 16, the allocation shifts into the fixed-income funds and FDIC-insured accounts.

STATIC INVESTMENT OPTIONSStatic investment options, unlike age-based investment options, do not change asset allocations as the beneficiary ages. Instead, the allocation of the account balance remains the same over time. Equity—30% International, Equity—10% International, 70% Equity/30% Fixed Income, 20% Equity/80% Fixed Income, and Fixed Income are rebalanced annually on the beneficiary’s birthday (or next available business day) to bring the underlying investments back to the target allocation of each investment option.An account owner/agent invested in a static investment option with a significant weighting in equity funds should periodically review the investment option as the beneficiary gets closer to enrolling in an eligible educational institution. The account owner/agent should consult with a financial advisor to determine whether the investment option is still suitable for his or her situation and college savings goals.When the money in a static account is divided between two or more underlying funds, the money in each account will be rebalanced annually on the beneficiary’s birthday (or next available business day) to the target allocation mix for the particular investment option.

Equity—100% DomesticThe Equity—100% Domestic investment option is allocated to a single domestic equity fund.

Equity—30% InternationalThe Equity—30% International investment option is allocated between two equity funds: 70 percent to a domestic equity fund and 30 percent to an international equity fund.

Equity—10% InternationalThe Equity—10% International investment option is allocated 90 percent to domestic equity funds, and 10 percent to an international equity fund.

70% Equity/30% Fixed IncomeThe 70% Equity/30% Fixed Income investment option allocates 70 percent to a mix of domestic and international equity funds, and 30 percent to a mix of domestic fixed-income funds.

20% Equity/80% Fixed IncomeThe 20% Equity/80% Fixed Income investment option allocates 20 percent to a mix of domestic and international equity funds, and 80 percent to a mix of domestic fixed-income funds and the FDIC-insured accounts.

Fixed IncomeThe Fixed Income investment option is allocated to a mix of domestic fixed-income funds.

Public Treasurers’ Investment FundThe Public Treasurers’ Investment Fund investment option is allocated to the Public Treasurers’ Investment Fund managed by the Office of the Utah State Treasurer.The Public Treasurers’ Investment Fund invests to maintain safety of principal, liquidity, and a competitive return on short-term investments. Securities in the fund include short-term corporate notes, money market mutual funds, commercial paper, certificates of deposit, and obligations of the U.S. Treasury and certain agencies of the U.S. government.These securities are issued by top-rated, highly credit-worthy corporations and U.S. government agencies. See page 34 for more information about the Public Treasurers’ Investment Fund.

FDIC-InsuredThe FDIC-Insured investment option is allocated to the FDIC-insured accounts held in trust by UESP at the Banks.Contributions to and earnings on the FDIC-insured accounts for each UESP account owner are apportioned between the Banks according to the following percentages: Sallie Mae Bank (90 percent) and U.S. Bank (10 percent). Money in the FDIC-insured accounts is insured by the FDIC on a pass-through basis to each account owner up to the maximum amount set by federal law, which is $250,000 at each Bank. The amount of FDIC insurance provided to an account owner at each Bank is based on the total of (1) the proportional value of an account owner’s investment in the FDIC-insured accounts at each Bank, plus (2) the value of the account owner’s other personal bank accounts (if any) held at each Bank, as determined by the Banks and by FDIC regulations.

CUSTOMIZED INVESTMENT OPTIONSAn account owner/agent who invests in a customized investment option is responsible for designing his or her own customized account asset allocation from the underlying investments UESP offers. The account owner/agent should carefully evaluate each of the underlying investments as well as the investment time horizon before selecting a customized investment option because each underlying investment represents different investment objectives, styles, risk/return characteristics, fees, and expenses. Carefully consider the risks associated with each underlying investment before selecting a customized investment


30 July 14, 2017

option and making a customized account asset allocation. See pages 38-42 for more information about the specific risks associated with the available underlying investments in the customized investment options.An account owner/agent should also note that the expected life of an account in UESP may be shorter than accounts established for other savings purposes, such as retirement. An account owner/agent should periodically review the investment option as the beneficiary gets closer to enrolling in an eligible educational institution. The account owner/agent should consult with a financial advisor to determine whether the investment option is still suitable for his or her situation and college savings goals.Before selecting a customized investment option, you should consult with a financial advisor to determine how such an investment option will complement your particular financial situation and investment goals.

Restrictions on Certain Underlying InvestmentsThe underlying investments listed on page 31 are available to be included in the Customized Age-Based and Customized Static investment options. Certain funds, as footnoted, have an investment allocation cap of 25 percent in an account in an effort to limit the exposure to certain market segments and to keep account expenses within UESP’s low-cost structure. For the Customized Age-Based investment option, this cap applies to the allocation for each age bracket.Investments are no longer allowed in Vanguard International Value Fund and the Public Treasurers’ Investment Fund as of July 25, 2011. An account invested in the Customized Static investment option that included Vanguard International Value Fund or the Public Treasurers’ Investment Fund as underlying investments before July 25, 2011, may remain in those funds. However, once the account owner/agent eliminates one of those funds from the selected underlying investments, that fund may not be added back at a later date.An account invested in the Customized Static investment option that includes the Vanguard International Value Fund at an allocation greater than 25 percent may remain in that allocation. However, upon making an investment option change (whether or not it affects the Vanguard International Value Fund), the 25 percent allocation cap per fund will be applied.To learn more about the objective, strategy, performance, and risks of each underlying investment, see pages 33-44.

Customized Age-BasedAn account owner/agent who invests in the Customized Age-Based investment option determines and customizes the investment allocations for each age bracket among the available underlying investments listed in the chart on page 31. An account balance invested in the Customized Aged-Based investment option is automatically reallocated to a new, customized underlying investment allocation when the beneficiary’s age qualifies for the next of 10 possible age brackets. Rebalancing occurs on the beneficiary’s birthday or the next available business day.The Customized Age-Based allocation must be established as an account’s investment option online at uesp.org. Each underlying investment that you select for your customized investment option must have an allocation of at least 1 percent, using only whole

percentages. However, not all underlying funds offered by UESP need to be included in the Customized Age-Based allocation. The combined total of the underlying investments selected for each age bracket must equal 100 percent.Regardless of the age of the beneficiary when the Customized Age-Based allocation is established, the account owner/agent must include asset allocations for all age brackets, including age brackets that would apply to younger beneficiaries.All future contributions will be invested in the Customized Age-Based allocation that an account owner/agent initially selects unless and until an account owner/agent instructs UESP to change the investment option. Changing the allocation of the underlying funds in an account invested in a Customized Age-Based investment option after the initial allocation is finalized, even if the beneficiary is older or younger than the age bracket in which he or she falls, is considered an investment option change.Note:

• The investment option for the same beneficiary may be changed twice per calendar year.

• An account owner/agent may only own one account with a Customized Age-Based investment option per beneficiary.

The combination of underlying investments established by the account owner/agent in the Customized Age-Based investment option will determine the fees and expenses for the account.

Customized Static An account owner/agent who invests in the Customized Static investment option determines and customizes the investment allocations from the available underlying investments listed in the chart on page 31.The Customized Static allocation must be established as an account’s investment option online at uesp.org. Each underlying investment that you select for your customized investment option must have an allocation of at least 1 percent, using only whole percentages. However, not all underlying funds offered by UESP need to be included in the Customized Static allocation. The combined total of the underlying investments selected must equal 100 percent.The Customized Static investment option does not change asset allocation as the beneficiary ages. Money in the account will be rebalanced annually on the beneficiary’s birthday (or next available business day) to bring the selected underlying investments back to the target allocation initially established by the account owner/agent. Changing the allocation of the underlying funds in an account invested in a Customized Static investment option is considered an investment option change. Please note that:

• The investment option for the same beneficiary may be changed twice per calendar year.

• An account owner/agent may only own one account with a Customized Static investment option per beneficiary.

The combination of underlying investments established by the account owner/agent in the Customized Static investment option will determine the fees and expenses for the account.



CHANGING INVESTMENT OPTIONSAn account owner/agent may change the investment option selected for a beneficiary on an account twice per calendar year. An investment option change can be made online at uesp.org or, except for the customized investment options, by submitting an Investment Option Change form (form 405).An account owner/agent of an account with a pending investment option change will not be able to open additional accounts with the same account owner and beneficiary combination until the pending investment option change is completed.Changing an investment option for an existing account or the allocation within a customized investment option will change the investment allocation of the account balance as well as affect future contributions and earnings. An investment option change for an account invested in a Customized Age-Based or Customized Static investment option must be done online at uesp.org under Account Access. If an account owner/agent would like the current balance in an account to remain invested in one investment option, but future contributions to be invested in a different investment option, the account owner/agent will need to open another account for the future contributions.The Internal Revenue Code permits two investment option changes per calendar year. Moreover, all UESP accounts owned by the same account owner/agent for the same beneficiary are treated as one

account for purposes of an investment option change. This means that if an account owner/agent has more than one account for the same beneficiary and wants to change an investment option for one of the accounts, the change will count as one of two allowable investment option changes for all accounts for that beneficiary during the calendar year.To change investment options on more than one account for the same beneficiary, and have those changes treated as one of the two allowable investment option changes, requests for each UESP account should be submitted at the same time online at uesp.org or by submitting an Investment Option Change form (form 405). Changing the allocation of the underlying funds for an account with a customized investment option is considered an investment option change. An automatic reallocation consistent with a beneficiary’s age-bracket change in an age-based investment option, including the Customized Age-Based investment option, is not considered an investment option change.The completion of an investment option change request will be acknowledged on the account owner/agent’s next quarterly account statement and by a confirmation email, if requested online. An account owner/agent may also check the account at uesp.org to see that the investment option change has been processed. Upon request, UESP will provide a confirmation to the account owner/agent before UESP issues the quarterly account statement.

Underlying Investments in the Customized Age-Based and Customized Static Investment Options

NotesThe following funds were closed to new investments as an underlying investment in the Customized Age-Based and Customized Static investment options beginning on July 25, 2011:

• Vanguard International Value Fund1

• Public Treasurers’ Investment Fund1 An investment allocation to this fund may not exceed 25 percent in the account. For the Customized Age-Based investment option, this cap applies to the

allocation for each age bracket.

Global Blended Equity and Fixed Income Portfolios• DFA Global Allocation 60/40 Portfolio• DFA Global Allocation 25/75 Portfolio

Domestic Equity• Vanguard Institutional Total Stock Market Index Fund• Vanguard Institutional Index Fund• Vanguard Value Index Fund• DFA U.S. Large Cap Value Portfolio• Vanguard Growth Index Fund• Vanguard Mid-Cap Index Fund• Vanguard Small-Cap Index Fund• Vanguard Small-Cap Value Index Fund1

• DFA U.S. Small Cap Value Portfolio1

• Vanguard Small-Cap Growth Index Fund1

• DFA Real Estate Securities Portfolio1

• Vanguard FTSE Social Index Fund• DFA U.S. Sustainability Core 1 Portfolio

International Equity• Vanguard Total International Stock Index Fund• Vanguard Developed Markets Index Fund• DFA International Value Portfolio1

• Vanguard International Growth Fund1

• Vanguard Emerging Markets Stock Index Fund1

Global Equity• DFA Global Equity Portfolio

Domestic Fixed Income• DFA One-Year Fixed Income Portfolio• Vanguard Short-Term Investment-Grade Fund• Vanguard Short-Term Bond Index Fund• Vanguard Short-Term Inflation-Protected Securities Index Fund• Vanguard Total Bond Market Index Fund• Vanguard High-Yield Corporate Fund1

International Fixed Income• Vanguard Total International Bond Index Fund

Global Fixed Income• DFA Five-Year Global Fixed Income Portfolio

Cash-Equivalent• FDIC-insured accounts held in trust by UESP at

Sallie Mae Bank and U.S. Bank


32 July 14, 2017

Available Underlying InvestmentsGlobal Blended Equity and Fixed Income Ticker Vanguard Small-Cap Growth Index Fund 2 VSGIX Domestic Fixed Income TickerDFA Global Allocation 60/40 Portfolio DGSIX DFA Real Estate Securities Portfolio 2 DFREX DFA One-Year Fixed Income Portfolio DFIHX

DFA Global Allocation 25/75 Portfolio DGTSX Vanguard FTSE Social Index Fund VFTSX Vanguard Short-Term Investment-Grade Fund V F S I X

Domestic Equity Ticker DFA U.S. Sustainability Core 1 Portfolio DFSIX Vanguard Short-Term Bond Index Fund VB IPX

Vanguard Inst. Total Stock Mkt. Index Fund VITPX International Equity Ticker Vanguard Short-Term Infl.-Prot. Sec. Index Fund VTSPX

Vanguard Institutional Index Fund V I I I X Vanguard Total International Stock Index Fund VTPSX Vanguard Total Bond Market Index Fund VBMPX

Vanguard Value Index Fund V I V I X Vanguard Developed Markets Index Fund VDIPX Vanguard High-Yield Corporate Fund2 VWEAX

DFA U.S. Large Cap Value Portfolio DFLVX DFA International Value Portfolio 2 DFIVX International Fixed Income TickerVanguard Growth Index Fund V I G I X Vanguard International Growth Fund 2 VWILX Vanguard Total International Bond Index Fund V T I F X

Vanguard Mid-Cap Index Fund VMCPX Vanguard Emerging Markets Stock Index Fund 2 VEMRX Global Fixed Income TickerVanguard Small-Cap Index Fund VSCPX Global Equity Ticker DFA Five-Year Global Fixed Income Portfolio DFGBX

Vanguard Small-Cap Value Index Fund 2 V S I I X DFA Global Equity Portfolio DGEIX Cash Equivalent TickerDFA U.S. Small Cap Value Portfolio2 DFSVX FDIC-Insured Accounts1 N/A

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Ticker Symbol VITPX VIIIX VMCPX VSCPX VTPSX VDIPX VEMRX VBMPX VTIFX VFSIX VBIPX N/A N/AAGE-BASED INVESTMENT OPTIONS

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Age 0-3 65.0% 26.0% 9.0% Age 4-6 65.0% 26.0% 9.0% Age 7-9 55.5% 22.0% 7.5% 8.5% 3.5% 3.0% Age 10-12 45.5% 18.5% 6.0% 16.0% 5.0% 9.0% Age 13-14 39.0% 15.5% 5.5% 16.5% 5.5% 18.0% Age 15 32.5% 13.0% 4.5% 17.5% 5.5% 22.0% 5.0%Age 16 26.0% 10.5% 3.5% 17.5% 5.5% 25.5% 11.5%Age 17 19.5% 8.0% 2.5% 18.0% 5.5% 27.5% 19.0%Age 18 13.0% 5.0% 2.0% 18.5% 6.0% 30.0% 25.5%Age 19+ 6.5% 2.5% 1.0% 19.0% 6.0% 32.5% 32.5%

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Age 0-3 100.0%Age 4-6 100.0%Age 7-9 85.0% 12.0% 3.0%Age 10-12 70.0% 21.0% 9.0% Age 13-14 60.0% 22.0% 18.0% Age 15 50.0% 23.0% 22.0% 5.0%Age 16 40.0% 23.0% 25.5% 11.5%Age 17 30.0% 23.5% 27.5% 19.0%Age 18 20.0% 24.5% 30.0% 25.5%Age 19+ 10.0% 25.0% 32.5% 32.5%

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Age 0-3 52.0% 21.0% 7.0% 11.0% 2.5% 6.5% Age 4-6 52.0% 21.0% 7.0% 11.0% 2.5% 6.5% Age 7-9 42.5% 17.0% 5.5% 14.0% 4.0% 12.0% 5.0%Age 10-12 32.5% 13.0% 4.5% 15.0% 5.0% 18.5% 11.5%Age 13-14 26.0% 10.5% 3.5% 16.5% 5.5% 21.0% 17.0%Age 15 19.5% 8.0% 2.5% 17.0% 5.0% 24.0% 24.0%Age 16 13.0% 5.0% 2.0% 18.0% 4.5% 26.0% 31.5%Age 17 6.5% 2.5% 1.0% 20.5% 4.5% 26.0% 39.0%Age 18 23.0% 4.5% 25.5% 47.0%Age 19+ 17.0% 3.0% 24.0% 56.0%

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e Age 0-3 39.0% 15.5% 5.5% 15.0% 5.0% 14.0% 6.0%Age 4-6 39.0% 15.5% 5.5% 15.0% 5.0% 14.0% 6.0%Age 7-9 29.0% 12.0% 4.0% 18.0% 6.0% 19.0% 12.0%Age 10-12 19.5% 8.0% 2.5% 19.5% 5.5% 22.5% 22.5%Age 13-14 13.0% 5.0% 2.0% 22.5% 5.0% 21.5% 31.0%Age 15 6.5% 2.5% 1.0% 22.0% 5.0% 20.5% 42.5%Age 16 22.0% 4.5% 18.5% 55.0%Age 17 16.0% 3.5% 16.0% 64.5%Age 18 10.5% 2.5% 13.5% 73.5%Age 19+ 4.0% 1.0% 9.5% 85.5%

STATIC INVESTMENT OPTIONSEquity—100% Domestic 100.0%Equity—30% International 70.0% 30.0%Equity—10% International 50.0% 20.0% 20.0% 10.0%70% Equity/30% Fixed Income 60.0% 7.5% 2.5% 10.0% 10.0% 10.0%20% Equity 80% Fixed/Income 14.0% 4.5% 1.5% 15.0% 30.0% 10.0% 25.0%Fixed Income 60.0% 20.0% 20.0%Public Treasurers’ Investment Fund 100.0%FDIC-Insured 1 100.0%CUSTOMIZED INVESTMENT OPTIONSCustomized Age-Based The allocation mix in the Customized Age-Based and Customized Static investment options will vary based on the underlying investment

allocation chosen by the account owner/agent. Customized investment options are only available online under Account Access at uesp.orgCustomized Static

1 Money invested in UESP’s underlying FDIC-insured accounts is held in trust by UESP at the Banks. Contributions to and earnings on the FDIC-insured accounts for each UESP account owner are apportioned between the Banks according to the following percentages: Sallie Mae Bank (90 percent) and U.S. Bank (10 percent). Money in the FDIC-insured accounts is insured by the FDIC on a pass-through basis to each account owner up to the maximum amount set by federal law, which is $250,000 at each Bank. The amount of FDIC insurance provided to an account owner at each Bank is based on the total of (1) the proportional value of an account owner’s investment in the FDIC-insured accounts at each Bank, plus (2) the value of the account owner’s other personal bank accounts (if any) held at each Bank, as determined by the Banks and by FDIC regulations.

2 An investment allocation to this fund may not exceed 25 percent in the account. For the Customized Age-Based investment option, this cap applies to the allocation for each age bracket.

UESP INVESTMENT OPTION ASSET ALLOCATIONS TABLENotes1 Money invested in UESP’s underlying

FDIC-insured accounts is held in trust by UESP at the Banks. Contributions to and earnings on the FDIC-insured accounts for each UESP account owner are apportioned between the Banks according to the following percentages: Sallie Mae Bank (90 percent) and U.S. Bank (10 percent). Money in the FDIC-insured accounts is insured by the FDIC on a pass-through basis to each account owner up to the maximum amount set by federal law, which is $250,000 at each Bank. The amount of FDIC insurance provided to an account owner at each Bank is based on the total of (1) the proportional value of an account owner’s investment in the FDIC-insured accounts at each Bank, plus (2) the value of the account owner’s other personal bank accounts (if any) held at each Bank, as determined by the Banks and by FDIC regulations.

2 An investment allocation to this fund may not exceed 25 percent in the account. For the Customized Age-Based investment option, this cap applies to the allocation for each age bracket.



UNDERLYING INVESTMENTS

UESP Dividend SchedulePeriodically, UESP receives dividends and interest from its various underlying investments. Any dividends and interest UESP receives will be allocated to accounts as units at the end of the business day on a UESP allocation date. This date will usually be declared within one business day of UESP being informed of the receipt of dividends from:

• Vanguard• Dimensional

This date will usually be within one business day of the receipt of interest from:

• Utah state treasurer (for money invested in the Public Treasurers’ Investment Fund)

• Sallie Mae Bank• U.S. Bank

Interest received from Sallie Mae Bank and U.S. Bank will be allocated between the master accounts held in trust by UESP to maintain a static 90 percent/10 percent allocation.These dividends and interest earnings will be allocated to UESP accounts as a UESP dividend. Each account will receive a dividend, expressed in the form of units. The number of units each account receives will be a proportional share of the total number of units owned by all account owners/agents.UESP dividends are allocated to accounts with a balance in that underlying investment at the close of business on the day UESP distributes the dividends or earned interest. An account owner/agent who closes an account, changes the investment option, or reallocates funds in a Customized Age-Based or Customized Static investment option on the date of the UESP dividend allocation will receive the applicable portion of that UESP dividend based on the new investment allocation. An account owner/agent may want to consider any such potential dividend allocations before moving money out of accounts or closing accounts.The table on this page is a typical UESP dividend/interest earnings schedule for each underlying investment. Neither dividend/interest earnings nor this schedule are guaranteed to occur.

Vanguard and Dimensional Mutual FundsUESP includes, as underlying investments, mutual funds offered by Vanguard and Dimensional. See pages 35-37 for more details on each fund.

Daily Pricing of Vanguard and Dimensional Mutual FundsThe daily market prices of the Vanguard and Dimensional mutual funds specific to an account’s selected investment option are available to an account owner/agent by logging in to Account Access online at uesp.org and selecting the applicable UESP account number. The daily price of a UESP unit does not include UESP’s administrative fees, which are charged on the last business day of each month as described in Part 8 | Expenses and Fees. Vanguard and Dimensional fund prices can also be accessed from any source that reports daily prices of publicly traded registered mutual funds.

Vanguard Mutual FundsUESP pools money to invest in the Vanguard mutual funds described on pages 35-36. As of March 31, 2017, Vanguard managed more than $4.2 trillion in U.S. mutual fund assets and exchange-traded fund (ETF) assets. The firm offers 176 funds to U.S. investors and

Dividend Allocation

Monthly Quarterly Annually

Vanguard Funds

Institutional Total Stock Market Index Fund •Institutional Index Fund •Value Index Fund •Growth Index Fund •Mid-Cap Index Fund •Small-Cap Index Fund •Small-Cap Value Index Fund •Small-Cap Growth Index Fund •FTSE Social Index Fund •Total International Stock Index Fund •Developed Markets Index Fund •International Value Fund •International Growth Fund •Emerging Markets Stock Index Fund •Short-Term Investment-Grade Fund •Short-Term Bond Index Fund •Short-Term Inflation-Protected Securities Index Fund •Total Bond Market Index Fund •High-Yield Corporate Fund •Total International Bond Index Fund •Dimensional Funds

Global Allocation 60/40 Portfolio •Global Allocation 25/75 Portfolio •U.S. Large Cap Value Portfolio •U.S. Small Cap Value Portfolio •Real Estate Securities Portfolio •U.S. Sustainability Core 1 Portfolio •International Value Portfolio •Global Equity Portfolio •One-Year Fixed Income Portfolio •Five-Year Global Fixed Income Portfolio •Public Treasurers’ Investment Fund 1 •FDIC-Insured Accounts 2 •

Typical UESP Dividend/Interest Earnings Schedule

Notes1 The Utah state treasurer notifies UESP of interest earnings associated with the

Public Treasurers’ Investment Fund at the beginning of each month.2 The return on contributions to the FDIC-insured accounts is expressed as an

annual percentage yield (APY) paid in the form of interest. The interest paid is a floating rate that is a 90/10 blend of the interest paid by each of the Banks based on recognized benchmarks for short-term interest rates.


34 July 14, 2017

more than 192 additional funds in non-U.S. markets. Additional information about Vanguard and its funds can be obtained from vanguard.com or by calling UESP for a prospectus.

Dimensional Mutual FundsUESP pools money to invest in the Dimensional funds described on pages 36-37. Dimensional is a leading global investment firm that has been translating academic research into practical investment strategies since 1981. The firm is based in Austin, Texas. As of March 31, 2017, it managed $497 billion in assets for investors. “Dimensional” refers to the Dimensional separate-but-affiliated entities generally, rather to one particular entity. These entities are Dimensional Fund Advisors LP, Dimensional Fund Advisors Ltd., DFA Australia Limited, Dimensional Fund Advisors Canada ULC, Dimensional Fund Advisors Pte. Ltd., and Dimensional Japan Ltd. Additional information about Dimensional and its funds can be obtained from us.dimensional.com or by calling UESP for a prospectus.

Public Treasurers’ Investment FundUESP pools money to invest in the Public Treasurers’ Investment Fund, which is managed by the Office of the Utah State Treasurer. Securities in the fund include short-term corporate notes, money market mutual funds, commercial paper, certificates of deposit, and obligations of the U.S. Treasury and certain agencies of the U.S. government. These securities are issued by top-rated, highly creditworthy corporations and U.S. government agencies.No more than 5 percent of the fund is invested with a single issuer of short-term corporate notes. The maximum adjusted weighted average maturity of the portfolio will not exceed 90 calendar days. The yield of the fund will fluctuate with current interest rates. Past performance is not necessarily indicative of future results.Investments in the Public Treasurers’ Investment Fund are not insured or guaranteed by the FDIC, the State of Utah, or any other federal or state government agency. More information about the Public Treasurers’ Investment Fund, including historical interest rates, can be found online at the Utah state treasurer’s website at treasurer.utah.gov/investments/investments-overview.

Daily Pricing of the Public Treasurers’ Investment Fund The daily market price of each unit of the underlying Public Treasurers’ Investment Fund investment is available to the account owner/agent by logging in to Account Access online at uesp.org and selecting the applicable account number. The daily price of UESP units does not include UESP’s administrative fees, which are charged as described in Part 8 | Expenses and Fees.The Public Treasurers’ Investment Fund was closed as a new underlying investment for an account with the Customized Static investment option beginning July 25, 2011. An account invested in the Customized Static investment option that included the Public Treasurers’ Investment Fund as an underlying investment as of July 25, 2011, may remain invested in the Public Treasurers’ Investment Fund. However, once the account owner/agent removes the Public Treasurers’ Investment Fund from the account owner/agent’s selected underlying investments, the Public Treasurers’ Investment Fund may not be added at a later date.The Public Treasurers’ Investment Fund is not available as an underlying fund in the Customized Age-Based investment option.

FDIC-Insured AccountsInvestments are pooled into the FDIC-insured accounts held in trust by UESP at the Banks. Contributions to and earnings on the FDIC-insured accounts are allocated between the Banks to

maintain a static allocation according to the following percentages: Sallie Mae Bank (90 percent) and U.S. Bank (10 percent). The interest paid is a floating rate that is a 90/10 blend of the interest paid by each of the Banks based on financial industry benchmarks for short-term interest rates. Interest on the UESP master accounts at the Banks will accrue each day of the month, but will only be paid and credited to UESP’s account owners monthly after the end of the month. The 90/10 allocation cannot be changed by any account owner.Sallie Mae Bank, a wholly owned subsidiary of SLM Corporation, has operated as an industrial bank in Utah since 2005. The bank had approximately $19.03 billion in assets as of March 31, 2017. For more information about Sallie Mae Bank, visit salliemae.com/banking.U.S. Bank National Association, with a principal place of business in Minneapolis, Minnesota, has been chartered since 1863. U.S. Bank had $450 billion in assets as of March 31, 2017. For more information about U.S. Bank, visit usbank.com.Money in the FDIC-insured accounts is insured by the FDIC on a pass-through basis to each account owner up to the maximum amount set by federal law, which is $250,000 at each Bank. The amount of FDIC insurance provided to an account owner at each Bank is based on the total of (1) the proportional value of an account owner’s investment in the FDIC-insured accounts at each Bank, plus (2) the value of the account owner’s other personal bank accounts (if any) held at each Bank, as determined by the Banks and by FDIC regulations. It is the account owner/agent’s responsibility to determine how the UESP investment would be aggregated with other accounts at each Bank for purposes of the FDIC insurance.

Daily Pricing of the FDIC-Insured AccountsThe daily market price of each unit of the FDIC-insured accounts is available to an account owner/agent by logging in to Account Access online at uesp.org and selecting the applicable UESP account number. The daily price of UESP units does not include UESP’s administrative fees, which are charged as described in Part 8 | Expenses and Fees.

ACCOUNT OWNER

FDIC-INSURED

SALLIE MAE

90%U.S. BANK

10%

$

insured up to $250,000 insured up to $250,000

UESP TRUST

$UNITS



Vanguard and Dimensional Mutual Funds

FundTicker

Symbol Benchmark Fund DescriptionVanguard Funds

Institutional Total Stock Market Index Fund

VITPX Center for Research in Security Prices (CRSP) U.S. Total Market Index

The fund seeks to track the performance of a benchmark index that measures the investment return of the overall stock market

Institutional Index Fund VIIIX Standard & Poor’s 500 Index®

The fund seeks to track the performance of a benchmark index that measures the investment return of large-capitalization stocks

Value Index Fund VIVIX CRSP U.S. Large Cap Value Index

The fund seeks to track the performance of a benchmark index that measures the investment return of large-capitalization value stocks

Growth Index Fund VIGIX CRSP U.S. Large Cap Growth Index

The fund seeks to track the performance of a benchmark index that measures the investment return of large-capitalization growth stocks

Mid-Cap Index Fund

VMCPX CRSP U.S. Mid Cap Index The fund seeks to track the performance of a benchmark index that measures the investment return of mid-capitalization stocks

Small-Cap Index Fund VSCPX CRSP U.S. Small Cap Index The fund seeks to track the performance of a benchmark index that measures the investment return of small-capitalization stocks

Small-Cap Value Index Fund

VSIIX CRSP U.S. Small Cap Value Index

The fund seeks to track the performance of a benchmark index that measures the investment return of small-capitalization value stocks

Small-Cap Growth Index Fund

VSGIX CRSP U.S. Small Cap Growth Index

The fund seeks to track the performance of a benchmark index that measures the investment return of small-capitalization growth stocks

FTSE Social Index Fund VFTSX Financial Times Stock Exchange (FTSE)4Good U.S. Select Index

The fund seeks to track the performance of a benchmark index that measures the investment return of large- and mid-capitalization stocks

Total International Stock Index Fund

VTPSX FTSE Global All Cap ex U.S. Index

The fund seeks to track the performance of a benchmark index that measures the investment return of stocks issued by companies located in developed and emerging markets, excluding the United States

Developed Markets Index Fund

VDIPX FTSE Developed All Cap ex U.S. Index

The fund seeks to track the performance of a benchmark index that measures the investment return of stocks issued by companies located in Canada and the major markets of Europe and the Pacific region

International Value Fund 1 VTRIX MSCI® All Country World Index (ACWI) ex USA Index

The fund seeks to provide long-term capital appreciation

International Growth Fund

VWILX MSCI® ACWI ex USA Index The fund seeks to provide long-term capital appreciation

Emerging Markets Stock Index Fund

VEMRX FTSE Emerging Markets All Cap China A Inclusion Index

The fund seeks to track the performance of a benchmark index that measures the investment return of stocks issued by companies located in emerging market countries

Short-Term Investment-Grade Fund

VFSIX Bloomberg Barclays® U.S. 1–5 Year Credit Bond Index

The fund seeks to provide current income while maintaining limited price volatility

Short-Term Bond Index Fund

VBIPX Bloomberg Barclays® U.S. 1–5 Year Government/Credit Float Adjusted Index

The fund seeks to track the performance of a market-weighted bond index with a short-term dollar-weighted average maturity

Short-Term Inflation-Protected Securities Index Fund

VTSPX Bloomberg Barclays® U.S. Treasury Inflation-Protected Securities (TIPS) 0–5 Year Index

The fund seeks to track the performance of a benchmark index that measures the investment return of inflation-protected public obligations of the U.S. Treasury with remaining maturities of less than 5 years


36 July 14, 2017

FundTicker

Symbol Benchmark Fund DescriptionTotal Bond Market Index Fund

VBMPX Bloomberg Barclays® U.S. Aggregate Float Adjusted Index

The fund seeks to track the performance of a broad, market-weighted bond index

High-Yield Corporate Fund

VWEAX Bloomberg Barclays® U.S. Corporate High Yield Bond Index

The fund seeks to provide a high level of current income

Total International Bond Index Fund

VTIFX Boomblerg Barclays® Global Aggregate ex-USD Float Adjusted RIC Capped Index (USD Hedged)

The fund seeks to track the performance of a benchmark index that measures the investment return of non-U.S. dollar-denominated investment-grade bonds

Dimensional FundsGlobal Allocation 60/40 Portfolio

DGSIX A composite of MSCI® World Index (60 percent) and Citigroup World Government Bond Index 1-3 Years (hedged) (40 percent)

• Designed to seek total return consisting of capital appreciation and current income

• Generally allocates its assets to underlying funds that invest in equity and fixed-income securities

• Seeks to achieve an allocation of approximately 40-80 percent (with a target allocation of approximately 60 percent) of the portfolio’s assets to equity funds and 20-60 percent (with a target allocation of approximately 40 percent) of its assets to fixed-income funds

• Equity investments may be in U.S., international, and emerging market funds

Global Allocation 25/75 Portfolio

DGTSX A composite of MSCI® World Index (25 percent) and Citigroup World Government Bond Index 1-3 Years (hedged) (75 percent)

• Designed to seek total return consistent with current income and preservation of capital with some capital appreciation

• Generally allocates the majority of its assets to fixed-income underlying funds, but also invests a small portion in equity underlying funds

• Seeks to achieve an allocation of approximately 5-45 percent (with a target allocation of approximately 25 percent) of the portfolio’s assets to equity funds and approximately 55-95 percent (with a target allocation of approximately 75 percent) of the portfolio’s assets to fixed-income funds

• Equity investments may be in the U.S., international, and emerging markets funds

U.S. Large Cap Value Portfolio

DFLVX Russell® 1000 Value Index • Has precise yet broadly diversified exposure to large companies with value characteristics

• Invests in companies that have a market capitalization in the largest 90 percent of the total U.S. market, or whose market capitalization is larger than the 1,000th largest U.S. company, whichever results in a higher market-capitalization break

• A feeder fund that does not hold securities directlyU.S. Small Cap Value Portfolio

DFSVX Russell® 2000 Value Index • Purchases a broad and diverse group of readily marketable securities of U.S. small-cap companies that Dimensional believes to be value stocks at the time of purchase

• Invests in securities of U.S. companies with market capitalizations within the lowest 10 percent of the market universe or smaller than the 1,000th largest U.S. company, whichever results in a higher market capitalization break

• Consists of nearly 1,200 securities as of May 31, 2017Real Estate Securities Portfolio

DFREX Dow Jones® U.S. Select REIT Index

• Seeks to achieve long-term capital appreciation• Invests primarily in readily marketable equity securities of

companies where principal activities include ownership, management, development, construction, or sale of residential, commercial, or industrial real estate



Notes1 Beginning July 25, 2011, Vanguard International Value Fund was closed as a new underlying investment for an account with the Customized Static investment option. An

account invested in the Customized Static investment option that included Vanguard International Value Fund as an underlying investment as of July 25, 2011, may remain invested in the fund. Once the account owner/agent removes the fund from the account owner/agent’s selected underlying investments, the fund may not be added at a later date. However, upon making an investment option change, the 25 percent allocation cap in an account will apply.

FundTicker

Symbol Benchmark Fund DescriptionU.S. Sustainability Core 1 Portfolio

DFSIX Russell® 3000 Index • Seeks long-term capital appreciation• Invests in a broad and diverse group of securities of

U.S. companies with a greater emphasis on small capitalization and value companies

• Takes into account the impact that companies may have on the environment and other sustainability considerations when making decisions

• May take the following factors into consideration for sustainability impact: carbon and other greenhouse emissions, or potential emissions, land use, cluster munitions manufacturing, biodiversity, involvement in toxic spills or releases, operational waste, water use, tobacco, child labor and factory farming activities, among other factors

International Value Portfolio

DFIVX MSCI® World ex USA Index • Purchases broadly diversified stocks of large non-U.S. companies with value characteristics in developed markets outside the United States

• A feeder fund that does not hold securities directly• Invests in nearly 500 securities as of May 31, 2017

Global Equity Portfolio DGEIX MSCI® World Index • Designed to achieve long-term capital appreciation• Generally allocates its assets to a combination of underlying

U.S., international, and emerging-markets equity funds• Composed of exposure to equity securities with no bonds• Seeks growth of capital over long time horizons• Indirect exposure to more than 12,000 securities across

separate asset classes in more than 40 countries as of May 31, 2017

One-Year Fixed Income Portfolio

DFIHX BofA Merrill Lynch® U.S. 6-Month Treasure Bill IndexBofA Merrill Lynch® 1-Year U.S. Treasury Note Index

• Designed to achieve stable real return in excess of the rate of inflation with a minimum of risk

• Principally invests in certificates of deposit, government and agency obligations, commercial paper, banker’s acceptances, notes, and bonds

• Under normal circumstances, maintains a weighted average portfolio maturity that will not exceed 1 year

• Generally holds no individual issue that has a maturity of longer than 2 years from the date of settlement

Five-Year Global Fixed Income Portfolio

DFGBX Citigroup World Government Bond Index 1-5 Years (Hedged)

• Designed to provide a market rate of return for a fixed-income portfolio with low relative volatility of returns

• Seeks to achieve its investment objective by generally investing in a universe of U.S. and foreign debt securities maturing in 5 years or less


38 July 14, 2017

INVESTMENT RISKS ASSOCIATED WITH UNDERLYING INVESTMENTSMoney in UESP accounts is subject to the investment risks associated with the underlying investments used in each of the UESP investment options. See the Summary of Primary Investment Risks Associated with Investment Options and the Summary of Primary Investment Risks Associated with Underlying Investments tables on pages 41-42 to see which of the following risks apply to the investment options and underlying funds. These risks may include, but are not limited to, the following:

Vanguard Funds, Public Treasurers’ Investment Fund, and FDIC-Insured Accounts RisksCall RiskCall risk is the chance that during periods of falling interest rates, the issuers of callable bonds may call (redeem) securities with higher coupon rates or interest rates before their maturity dates. The underlying fund would then lose any price appreciation above the bond’s call price and would be forced to reinvest the unanticipated proceeds at lower interest rates, resulting in a decline in the underlying fund’s income. Such redemptions and subsequent reinvestments would also increase the underlying fund’s portfolio turnover rate.

China A-shares RiskChina A-shares risk is the chance that the underlying fund may not be able to access a sufficient amount of China A-shares to track its target index. China A-shares are only available to foreign investors through a quota license or the China Stock Connect program.

Country/Regional RiskCountry/regional risk is the chance that world events such as political upheaval, financial troubles, or natural disasters will adversely affect the value of securities issued by companies in foreign countries or regions. Because an underlying fund may invest a large portion of its assets in securities of companies located in any one country or region, the underlying fund’s performance may be hurt disproportionately by the poor performance of its investments in that area. Country/regional risk is especially high in emerging markets.

Credit RiskCredit risk is the chance that a bond issuer will fail to pay interest and principal in a timely manner or that negative perceptions of the issuer’s ability to make such payments will cause the price of the bond to decline. Credit risk should be low for the underlying funds because they purchase only bonds that are investment-grade quality.

Currency RiskCurrency risk is the chance that the value of a foreign investment, measured in U.S. dollars, will decrease because of unfavorable changes in currency exchange rates. Currency risk is especially high in emerging markets.

Currency Hedging RiskCurrency hedging risk is the chance the currency hedging transactions entered into by an underlying fund may not perfectly offset the underlying fund’s foreign currency exposures.

An underlying fund seeks to mimic the performance of foreign bonds without regard to currency exchange rate fluctuations. To accomplish this goal, the underlying fund attempts to offset, or hedge, its foreign currency exposures by entering into currency hedging transactions, primarily through the use of foreign currency exchange forward contracts. However, it generally is not possible to perfectly hedge the underlying fund’s foreign currency exposure. The underlying fund will decline in value if it underhedges a currency that has weakened or overhedges a currency that has strengthened relative to the U.S. dollar. In addition, the underlying fund will incur expenses to hedge its foreign currency exposure.

Derivatives RiskDerivatives risk arises when the underlying fund invests in derivatives, which may involve risks different from, and possibly greater than, those of investments directly in the underlying securities or assets.

Emerging Markets RiskEmerging markets risk is the chance that the stocks of companies located in emerging markets will be substantially more volatile, and substantially less liquid, than the stocks of companies located in more developed foreign markets because, among other factors, emerging markets can have greater custodial and operational risks; less developed legal, tax, regulatory, and accounting systems; and greater political, social, and economic instability than developed markets.

Extension RiskExtension risk is the chance that during periods of rising interest rates, certain debt securities will be paid off substantially more slowly than originally anticipated, and the value of those securities may fall. For funds that invest in mortgage-backed securities, extension risk is the chance that during periods of rising interest rates, homeowners will prepay their mortgages at slower rates. Extension risk is generally moderate for intermediate-term bond funds.

Income RiskIncome risk is the chance that the underlying fund’s income will decline because of falling interest rates. Income risk is generally high for short-term bond funds and moderate for intermediate-term bond funds, so investors should expect the underlying fund’s monthly income to fluctuate accordingly.

Income Fluctuations RiskIncome fluctuations risk is the risk that the underlying fund’s quarterly income distributions are likely to fluctuate considerably more than the income distributions of a typical bond fund. In fact, under certain conditions, the underlying fund may not have any income to distribute. Income fluctuations associated with changes in interest rates are expected to be low; however, income fluctuations with changes in inflation are expected to be high.

Index Sampling RiskIndex sampling risk is the chance that the securities selected for the underlying fund, in the aggregate, will not provide investment performance matching that of the underlying fund’s target index. Index sampling risk should be low.



Interest Rate RiskInterest rate risk is the chance that bond prices overall will decline because of rising interest rates. Interest rate risk should be low to moderate for the underlying funds because they invest primarily in short-term and intermediate-term bonds, whose prices are less sensitive to interest rate changes than are the prices of long-term bonds.

Investment Style RiskInvestment style risk is the chance that returns from the types of stocks in which the underlying fund is invested will trail returns from the overall stock market. Specific types of stocks tend to go through cycles of doing better—or worse—than the stock market in general. These periods have in the past lasted as long as several years.

Liquidity RiskLiquidity risk is the chance that the underlying fund may not be able to sell a security in a timely manner at a desired price. This risk is generally low for short-term corporate bonds.

Manager RiskManager risk is the chance that poor security selection will cause the underlying fund to underperform relevant benchmarks or other funds with a similar investment objective.

Nondiversification RiskNondiversification risk is the chance that the underlying fund’s performance may be hurt disproportionately by the poor performance of bonds issued by just a few or even a single issuer. The underlying fund is considered nondiversified if it invests a significant percentage of its assets in bonds issued by a small number of issuers.

Prepayment RiskPrepayment risk is the chance that during periods of falling interest rates, homeowners will refinance their mortgages before their maturity dates, resulting in prepayment of mortgage-backed securities held by the underlying fund. The underlying fund would then lose any price appreciation above the mortgage’s principal and would be forced to reinvest the unanticipated proceeds at lower interest rates, resulting in a decline in the underlying fund’s income. Such prepayments and subsequent reinvestments would also increase the underlying fund’s portfolio turnover rate.

Stock Market RiskStock market risk is the chance that stock prices overall will decline. Stock markets tend to move in cycles, with periods of rising prices and periods of falling prices. An underlying fund’s target index may, at times, become focused in stocks of a particular sector of the stock market, subsector of the market, or group of companies, which could cause the underlying fund to underperform the overall stock market.The underlying funds’ investments in foreign stocks can be riskier than U.S. stock investments. Foreign stocks tend to be more volatile and less liquid than U.S. stocks. The prices of foreign stocks and the prices of U.S. stocks have sometimes moved in opposite directions.

Dimensional Funds RisksCredit RiskCredit risk is the risk that the issuer of a security may be unable to make interest payments and/or repay principal when due. A downgrade to an issuer’s credit rating or a perceived change in an issuer’s financial strength may affect a security’s value, and thus impact a fund’s performance. Government agency obligations have different levels of credit support and, therefore, different degrees of credit risk. Securities issued by agencies and instrumentalities of the U.S. government that are supported by the full faith and credit of the United States, such as the Federal Housing Administration and Ginnie Mae, present little credit risk. Other securities issued by agencies and instrumentalities sponsored by the U.S. government, that are supported only by the issuer’s right to borrow from the U.S. Treasury, subject to certain limitations, and securities issued by agencies and instrumentalities sponsored by the U.S. government that are sponsored by the credit of the issuing agencies, such as Freddie Mac and Fannie Mae, are subject to a greater degree of credit risk. U.S. government agency securities issued or guaranteed by the credit of the agency may still involve a risk of nonpayment of principal and/or interest.

Cybersecurity RiskA fund’s or its service providers’ use of internet, technology and information systems may expose the portfolio to potential risks linked to cybersecurity breaches of those technological or information systems. Cybersecurity breaches, among other things, could allow an unauthorized party to gain access to proprietary information, customer data, or fund assets, or cause the portfolio and/or its service providers to suffer data corruption or lose operational functionality.

Derivatives RiskDerivatives are instruments whose value is derived from that of other assets, rates, or indices. Derivatives can be used for hedging (attempting to reduce risk by offsetting one investment position with another) or nonhedging purposes. Hedging with derivatives may increase expenses, and there is no guarantee that a hedging strategy will work. While hedging can reduce or eliminate losses, it can also reduce or eliminate gains. The use of derivatives for nonhedging purposes may be considered to carry more risk than other types of investments. When a fund uses derivatives, it will be directly exposed to risks of these derivatives. Derivative instruments are subject to a number of risks, including counterparty, liquidity, interest rate, market, credit, and management risks, and the risk of improper valuation. Changes in the value of a derivative may not correlate perfectly with the underlying asset, rate, or index, and the portfolio could lose more than the principal amount invested.

Emerging Markets RiskNumerous emerging market countries have a history of, and continue to experience, serious, and potentially continuing, economic and political problems. Stock markets in many emerging market countries are relatively small, expensive to trade in, and generally have higher risks than those in developed markets. Securities in emerging markets also may be less liquid than those in developed markets and foreigners are often limited in their ability to invest in and withdraw assets from these


40 July 14, 2017

markets. Additional restrictions may be imposed under other conditions. Frontier market countries generally have smaller economies or less developed capital markets and, as a result, the risks of investing in emerging market countries are magnified in frontier market countries.

Equity Market RiskEven a long-term investment approach cannot guarantee a profit. Economic, market, political, and issuer-specific conditions and events will cause the value of equity securities, and a fund that owns them, to rise or fall. Stock markets tend to move in cycles, with periods of rising prices and periods of falling prices.

Foreign Government Debt RiskThe risk that (a) the governmental entity that controls the repayment of government debt may not be willing or able to repay the principal and/or to pay the interest when it becomes due, due to factors such as political considerations, the relative size of the governmental entity’s debt position in relation to the economy, cash flow problems, insufficient foreign currency reserves, the failure to put in place economic reforms required by the International Monetary Fund or other multilateral agencies, and/or other national economic factors; (b) governments may default on their debt securities, which may require holders of such securities to participate in debt rescheduling; and (c) there is no legal or bankruptcy process by which defaulted government debt may be collected in whole or in part.

Foreign Securities and Currencies RiskForeign securities prices may decline or fluctuate because of (a) economic or political actions of foreign governments, and/or (b) less-regulated or liquid securities markets. Investors holding these securities may also be exposed to foreign currency risk (the possibility that foreign currency will fluctuate in value against the U.S. dollar or that a foreign government will convert, or be forced to convert, its currency to another currency, changing its value against the U.S. dollar).

Fund of Funds RiskThe investment performance of a fund is affected by the investment performance of the underlying funds in which the fund invests. The ability of a fund to achieve its investment objective depends on the ability of the underlying funds to meet their investment objectives and on the advisor’s decisions regarding the allocation of the fund’s assets among the underlying funds. A fund may allocate assets to an underlying fund or asset class that underperforms other funds or asset classes. There can be no assurance that the investment objective of a fund or any underlying fund will be achieved. When a fund invests in underlying funds, investors are exposed to a proportionate share of the expenses of those underlying funds in addition to the expenses of the fund. Through its investments in underlying funds, a fund is subject to the risks of the underlying funds’ investments.

Income RiskIncome risk is the risk that falling interest rates will cause a fund’s income to decline because, among other reasons, the proceeds from maturing short-term securities in its portfolio may be reinvested in lower-yielding securities.

Interest Rate RiskFixed-income securities are subject to interest rate risk because the prices of fixed-income securities tend to move in the opposite direction of interest rates. When interest rates rise, fixed-income security prices fall. When interest rates fall, fixed-income security prices rise. In general, fixed-income securities with longer maturities are more sensitive to changes in interest rates.

Liquidity RiskLiquidity risk exists when particular portfolio investments are difficult to purchase or sell. To the extent that a fund holds illiquid investments, its performance may be reduced due to an inability to sell the investments at opportune prices or times. Liquid portfolio investments may become illiquid or less liquid after purchase by the funds due to low trading volume, adverse investor perceptions, and/or other market developments. Liquidity risk includes the risk that a fund will experience significant net redemptions at a time when it cannot find willing buyers for its portfolio securities or can only sell its portfolio securities at a material loss. Liquidity risk can be more pronounced in periods of market turmoil.

Market RiskEven a long-term investment approach cannot guarantee a profit. Economic, political, and issuer-specific events will cause the value of securities owned by a fund to rise or fall.

Risk of Concentrating in the Real Estate IndustryThe exclusive focus by a fund on the real estate industry will cause the fund to be exposed to the general risks of direct real estate ownership. The value of securities in the real estate industry can be affected by changes in real estate values and rental income, property taxes, and tax and regulatory requirements. Also, the value of securities in the real estate industry may decline with changes in interest rates. Investing in real estate investment trusts (REITs) and REIT-like entities involves certain unique risks in addition to those risks associated with investing in the real estate industry in general. REITs and REIT-like entities are dependent upon management skill, may not be diversified, and are subject to heavy cash flow dependency and self-liquidation. REITs and REIT-like entities also are subject to the possibility of failing to qualify for tax-free pass-through of income. Also, because REITs and REIT-like entities typically are invested in a limited number of projects or in a particular market segment, these entities are more susceptible to adverse developments affecting a single project or market segment than more broadly diversified investments. The performance of the fund may be materially different from the broad equity market.

Securities Lending RiskSecurities lending involves the risk that the borrower may fail to return the securities in a timely manner, or at all. As a result, a fund may lose money and there may be a delay in recovering the loaned securities. The fund could also lose money if it does not recover the securities and/or the value of the collateral falls, including the value of investments made with cash collateral. Securities lending also may have certain adverse tax consequences.



Investment Options Risks Investment Risk

Call

China

A

Coun

try/R

egion

al

Cred

it

Curre

ncy

Curre

ncy H

edgin

g

Deriv

ative

s

Emer

ging M

arke

ts

Exten

sion

Incom

e

Index

Sam

pling

Inter

est R

ate

Inves

tmen

t Styl

e

Liquid

ity

Mana

ger

Nondive

rsification

Prep

ayme

nt

Stoc

k Mark

et

AGE-BASED INVESTMENT OPTIONSAge-Based Aggressive Global • • • • • • • • • • • • • • • • • •Age-Based Aggressive Domestic • • • • • • • • • • •Age-Based Moderate • • • • • • • • • • • • • • • • • •Age-Based Conservative • • • • • • • • • • • • • • • • • •STATIC INVESTMENT OPTIONSEquity—100% Domestic • •Equity—30% International • • • • •Equity—10% International • • • • •70% Equity/30% Fixed Income • • • • • • • • • • • • • • • •20% Equity/80% Fixed Income • • • • • • • • • • • • • • • •Fixed Income • • • • • • • • • •Public Treasurers' Investment Fund • • • •FDIC-Insured •CUSTOMIZED INVESTMENT OPTIONS

Customized Age-Based The investment risks of an account invested in the Customized Age-Based and Customized Static investment options will vary based on the underlying funds selected by the account owner/agent. Certain funds only available in the customized investment options carry additional risks not listed in this table. To understand the complete investment risk potentially associated with your customized portfolio, please review the investment risk tables on page 42 that specify specific risks for each Vanguard or Dimensional fund.Customized Static

SUMMARY OF PRIMARY INVESTMENT RISKS ASSOCIATED WITH INVESTMENT OPTIONS TABLE

Small Company RiskSecurities of small companies are often less liquid than those of large companies, and this could make it difficult to sell a small company security at a desired time or price. As a result, small company stocks may fluctuate relatively more in price. In general, smaller capitalization companies are also more vulnerable than larger companies to adverse business or economic developments, and they may have more limited resources.

Sustainability Impact Consideration Investment RiskThe U.S. Sustainability Core 1 Portfolio’s sustainability impact considerations may limit the number of investment opportunities available to the portfolio, and as a result, at times, the portfolio may produce more modest gains than funds that are not subject to such special investment considerations. For example, the portfolio may decline to purchase, or underweight

its investment in, certain securities due to sustainability impact considerations when other investment considerations would suggest that a more significant investment in such securities would be advantageous. In addition, the portfolio may sell certain securities due to sustainability impact considerations when it is otherwise disadvantageous to do so. The sustainability impact considerations may cause the portfolio’s industry allocation to deviate from that of funds without these considerations and of conventional benchmarks.

Value Investment RiskValue stocks may perform differently from the market as a whole, and following a value-oriented investment strategy may cause a fund to, at times, underperform equity funds that use other investment strategies.


42 July 14, 2017

Investment Risk

Call

China

A

Coun

try/R

egion

al

Cred

it

Curre

ncy

Curre

ncy H

edgin

g

Deriv

ative

s

Emer

ging M

arke

ts

Exte

nsion

Inco

me

Inco

me

Fluc

tuat

ions

Inde

x Sam

pling

Inte

rest

Rate

Inve

stmen

t Styl

e

Liquid

ity

Man

ager

Nond

iversi

ficati

on

Prep

aym

ent

Stoc

k Mar

ket

Vang

uard

Inst'l Total Stock Market Index Fund • •Institutional Index Fund • •Value Index Fund • •Growth Index Fund • •Mid-Cap Index Fund • •Small-Cap Index Fund • •Small-Cap Value Index Fund • •Small-Cap Growth Index Fund • •FTSE Social Index Fund • •Total International Stock Index Fund • • • • •Developed Markets Index Fund • • • •International Value Fund • • • • •International Growth Fund • • • • •Emerging Markets Stock Index Fund • • • • • •Short-Term Investment-Grade Fund • • • • • • • •Short-Term Bond Index Fund • • • • •Short-Term Inflation-Protected Securities Index Fund • •

Total Bond Market Index Fund • • • • • • • •High-Yield Corporate Fund • • • • • •Total International Bond Index Fund • • • • • • • • •

Public Treasurers’ Investment Fund • • • •FDIC-Insured Accounts •

Investment Risk

Cred

it

Cybe

rsecu

rity

Deriv

ative

s

Emer

ging M

arke

ts

Equit

y Mar

ket

Fore

ign G

over

nmen

t De

bt

Fore

ign S

ecur

ities

and C

urre

ncies

Fund

of F

unds

Incom

e

Inter

est R

ate

Liquid

ity

Marke

t

Conc

entra

ting i

n Re

al Es

tate

Secu

rities

Lend

ing

Small

Com

pany

Susta

inabil

ity Im

pact

Co

nside

ratio

n Inv

estm

ent

Value

Inve

stmen

t

Dim

ensi

onal

Global Allocation 60/40 Portfolio • • • • • • • • • • • • • • •Global Allocation 25/75 Portfolio • • • • • • • • • • • • • • •U.S. Large Cap Value Portfolio • • • • •U.S. Small Cap Value Portfolio • • • • • •Real Estate Securities Portfolio • • • • •U.S. Sustainability Core 1 Portfolio • • • • • • •International Value Portfolio • • • • • •Global Equity Portfolio • • • • • • • • •One-Year Fixed Income Portfolio • • • • • • • • • •Five-Year Global Fixed Income Portfolio • • • • • • • • • •

SUMMARY OF PRIMARY INVESTMENT RISKS ASSOCIATED WITH UNDERLYING INVESTMENTS TABLESVanguard Funds, Public Treasurers’ Investment Fund, and FDIC-insured Accounts

Dimensional Funds



Latest Month

Latest Three

MonthsYear to Date 1

One Year

Average Annualized Return 2

Inception Date3

Three Year

Five Year

Ten Year

Since Inception

AGE-BASED INVESTMENT OPTIONS4

Age

-Bas

ed

Agg

ress

ive

Glo

bal

Age 0–3 1.53% 3.80% 9.66% 17.89% 7.23% 13.53% 5.92% 10.14% 4/1/2003Age 4–6 1.53% 3.80% 9.66% 17.88% 7.23% 13.52% 5.92% 10.14% 4/1/2003Age 7–9 1.35% 3.31% 8.17% 14.54% 6.24% 11.24% 5.95% 9.33% 4/1/2003Age 10–12 1.13% 2.75% 6.60% 11.23% 5.18% 8.92% 5.74% 8.26% 4/1/2003Age 13–14 0.86% 2.09% 4.86% 7.96% 3.99% 6.50% 5.23% 6.91% 4/1/2003Age 15 0.86% 2.09% 4.86% 7.96% 3.99% 6.50% 5.23% 6.91% 4/1/2003Age 16 0.56% 1.37% 3.00% 4.68% 2.68% 3.97% 4.50% 5.31% 4/1/2003Age 17 0.56% 1.37% 3.00% 4.68% 2.68% 3.97% 4.50% 5.31% 4/1/2003Age 18 0.56% 1.37% 3.00% 4.68% 2.68% 3.97% 4.50% 5.31% 4/1/2003Age 19+ 0.17% 0.45% 0.75% 1.19% 0.99% 0.89% 1.26% 1.70% 4/1/2003

Age

-Bas

ed

Agg

ress

ive

Dom

estic


Age

-Bas

ed M

oder

ate


Age

-Bas

ed C

onse

rvat

ive


Opt

ion

3

(Clo

sed

to n

ew in

vestm

ents)


INVESTMENT OPTION PERFORMANCE AS OF MAY 31, 2017, TABLE

Important Information Regarding Investments in UESPThe performance returns shown in the table above are based on a $10,000 beginning account balance, assuming the money was invested on the first day and held until the last day of each period shown. These returns only reflect the performance returns of a hypothetical $10,000 investment for a particular investment option over the stated period of time reflected in the table, not for individual accounts. Individual account performance will vary based on the timing of the initial and subsequent investments, withdrawals (if any), and the account balances.The returns shown above (a) take into account the underlying investment performance for each period; (b) show applicable interest and dividends; and (c) are net of the Administrative Asset Fee charged by UESP during such periods. Beginning on January 1, 2010, and ending on September 30, 2014, the Administrative Maintenance Fee of up to $15 annually was not reflected on the returns. The Administrative Mail Delivery Fee was included in the performance calculations until September 30, 2014. The fee no longer applies to UESP accounts as of July 2017.For age-based and static investment options, performance returns shown above assume that (a) prior to January 1, 2007, the investment options did not rebalance; (b) beginning

January 1, 2007, and ending December 31, 2012, investment options rebalanced on January 1 of each year to match the target allocations for each investment option in effect at the time; and (c) beginning January 1, 2013, investment returns are based on the aggregate market value of the investment options, which reflect the actual investment rebalancing that takes place on the birthday of each beneficiary. For these reasons and the reasons stated above, the actual returns in an individual account will not match those shown in the tables.The age brackets in the age-based investment options were changed on July 14, 2017. On that date, the number of age brackets was increased and the investment allocation for each age bracket was changed. The investment option performance shown in the table reflects the historical performance returns for the corresponding age bracket that existed before July 14, 2017. For more information about the investment allocations for these age brackets and their corresponding age-based investment options, see Part 7 | Investment Information.Past performance does not guarantee future results.See Notes on page 44


44 July 14, 2017

Latest Month

Latest Three

MonthsYear to Date 1

One Year

Average Annualized Return 2

Inception Date3

Three Year

Five Year

Ten Year

Since Inception

STATIC INVESTMENT OPTIONSEquity—100% Domestic 1.39% 2.52% 8.58% 17.25% 9.94% 15.20% 6.65% 5.24% 9/20/1999

Equity—30% International 1.70% 4.10% 9.68% 17.35% 7.26% 13.70% N/A 10.06% 10/3/2008

Equity—10% International 0.95% 2.36% 8.00% 17.05% 8.43% 14.40% 6.33% 10.44% 4/1/2003

70% Equity/30% Fixed Income 1.01% 2.35% 6.65% 12.74% 6.48% N/A N/A 9.17% 6/21/2013

20% Equity/80% Fixed Income 0.56% 1.37% 2.99% 4.67% 2.69% N/A N/A 3.63% 6/21/2013

Fixed Income 0.50% 1.10% 1.90% 1.42% 2.00% 1.64% 4.00% 3.87% 9/9/2002

Public Treasurers’ Inv. Fund: Utah Res. 0.11% 0.31% 0.51% 1.13% 0.79% 0.72% 1.24% 2.76% 11/3/1996

Public Treasurers’ Inv. Fund: Non-Utah Res. 0.09% 0.27% 0.45% 0.97% 0.63% 0.54% 0.99% 2.64% 11/3/1996

FDIC-Insured 0.14% 0.34% 0.54% 1.08% 0.80% 0.64% N/A 0.70% 2/11/2009

CUSTOMIZED INVESTMENT OPTIONSThe information below shows the returns for the following underlying investments and are net of the UESP Administrative Asset Fee. Returns on an account invested in the Customized Age-Based or Customized Static investment options will depend upon the underlying investment allocation chosen by the account owner/agent. In addition, individual account performance will vary based on the timing of the investments in the investment option, any cash flow in or out of the UESP account during the investment period, and on the balances in the UESP accounts.

Vang

uard

Fun

ds

Institutional Total Stock Market Index Fund 0.99% 2.12% 7.86% 17.44% 9.48% 15.06% N/A 13.89% 2/1/2010Institutional Index Fund 1.39% 2.51% 8.56% 17.23% 9.92% 15.19% N/A 13.84% 2/1/2010Value Index Fund 0.09% -0.92% 3.28% 15.55% 8.60% N/A N/A 11.75% 6/21/2013Growth Index Fund 2.81% 6.53% 15.21% 19.67% 10.97% N/A N/A 14.78% 6/21/2013Mid-Cap Index Fund 0.90% 2.08% 8.34% 16.18% 8.72% 15.00% N/A 14.36% 2/1/2010Small-Cap Index Fund -1.15% -0.57% 3.36% 16.62% 7.53% 14.43% N/A 14.08% 2/1/2010Small-Cap Value Index Fund -2.35% -2.71% -0.06% 16.24% 7.96% N/A N/A 12.22% 6/21/2013Small-Cap Growth Index Fund 0.31% 2.10% 7.76% 16.99% 6.93% N/A N/A 10.11% 6/21/2013FTSE Social Index Fund N/A N/A N/A N/A N/A N/A N/A N/A 7/14/2017Total International Stock Index Fund 2.99% 8.22% 14.10% 18.11% 1.60% 8.66% N/A 3.14% 5/6/2011Developed Markets Index Fund 3.35% 8.90% 14.01% 16.78% 1.83% 10.32% N/A 6.39% 2/1/2010International Value Fund5 3.36% 9.32% 14.55% 19.21% 0.25% 9.32% N/A 5.29% 2/1/2010International Growth Fund 5.13% 13.97% 23.41% 25.71% 5.10% 11.58% N/A 8.48% 2/1/2010Emerging Markets Stock Index Fund 1.21% 4.96% 13.76% 23.80% 1.25% N/A N/A 4.53% 6/21/2013Short-Term Investment-Grade Fund 0.26% 0.73% 1.41% 1.90% 1.72% 2.01% N/A 2.00% 8/1/2011Short-Term Bond Index Fund 0.22% 0.66% 1.08% 0.91% 1.09% N/A N/A 1.31% 6/21/2013Short-Term Infl.-Prot. Sec. Index Fund -0.10% 0.03% 0.52% 1.47% -0.01% N/A N/A 0.26% 2/3/2014Total Bond Market Index Fund 0.66% 1.35% 2.30% 1.29% 2.27% 1.95% N/A 3.30% 2/1/2010High-Yield Corporate Fund N/A N/A N/A N/A N/A N/A N/A N/A 7/14/2017Total International Bond Index Fund 0.47% 0.93% 0.98% 1.50% 3.75% N/A N/A 3.97% 2/3/2014

Dim

ensio

nal F

und

s

Global Allocation 60/40 Portfolio 0.69% 2.00% 5.49% 11.30% N/A N/A N/A 5.69% 2/2/2015Global Allocation 25/75 Portfolio 0.29% 1.16% 2.85% 5.23% N/A N/A N/A 2.89% 2/2/2015U.S. Large Cap Value Portfolio -0.13% -0.44% 4.01% 18.54% 7.75% N/A N/A 12.14% 6/21/2013U.S. Small Cap Value Portfolio -3.53% -4.21% -4.45% 17.19% 5.14% N/A N/A 9.36% 6/21/2013Real Estate Securities Portfolio -0.51% -2.77% 0.30% 2.57% 7.77% N/A N/A 10.02% 6/21/2013U.S. Sustainability Core 1 Portfolio N/A N/A N/A N/A N/A N/A N/A N/A 7/14/2017International Value Portfolio 1.71% 5.45% 9.19% 19.79% -0.41% N/A N/A 5.70% 6/21/2013Global Equity Portfolio 0.80% 2.72% 7.81% 17.59% 5.82% N/A N/A 10.14% 6/21/2013One-Year Fixed Income Portfolio 0.08% 0.22% 0.42% 0.67% 0.34% N/A N/A 0.33% 6/21/2013Five-Year Global Fixed Income Portfolio 0.35% 1.07% 1.69% 1.14% N/A N/A N/A 1.29% 4/16/2015

Public Treasurers’ Investment Fund6 0.09% 0.26% 0.42% 0.93% 0.58% 0.51% N/A 0.47% 2/1/2010FDIC-Insured Accounts 0.12% 0.33% 0.51% 1.03% 0.78% 0.62% N/A 0.69% 2/1/2010

Notes1 Year-to-date calculations are based on a calendar year; January 1 to the current month-end date.2 Average Annualized Returns for investment options with an inception date in the past 12 months are cumulative and non-annualized.3 The inception date is the first date that (a) the investment option was offered and/or received a contribution, or (b) the underlying fund was offered as part of either the Customized Age-Based

or Customized Static investment options.4 The age brackets in the age-based investment options shown in the table were changed on July 14, 2017. Investment option performance before this date reflects the returns for the

corresponding age bracket that existed prior to July 14, 2017. 5 Closed to new investments beginning on July 25, 2011.6 Public Treasurers’ Investment Fund is a pool of money managed by the Utah state treasurer in short-term investments. Closed to new investments as an underlying investment in the

Customized Age-Based and Customized Static investment options beginning on July 25, 2011.

INVESTMENT OPTION PERFORMANCE AS OF MAY 31, 2017, TABLE

8Part 8 | ExPEnsEs and FEEs


This section describes Utah Educational Savings Plan (UESP) services that may be subject to fees. UESP’s

Asset-Based Fee is comprised of the Operating Expense Ratios of underlying funds and an Administrative Asset Fee. UESP does not charge fees for opening an account, changing investment options, making withdrawals, or account transfers. Other fees may be charged for special services or returned contributions.

FEE STRUCTUREUESP’s Asset-Based Fee structure has two parts:

• The Operating Expense Ratios of the underlying funds• The UESP Administrative Asset Fee

The Operating Expense Ratios of the Vanguard and Dimensional funds and the UESP Administrative Asset Fee constitute the total annual Asset-Based Fee. No Operating Expense Ratios are assessed on the FDIC-insured accounts. The Operating Expense Ratio for the Public Treasurers’ Investment Fund is 0.005 percent, which UESP pays in full. UESP reserves the right to discontinue or limit paying the Operating Expense Ratio on the Public Treasurers’ Investment Fund after giving notice to affected account owners.For age-based and static investment options, the annual Asset-Based Fees range from 0.150 percent to 0.202 percent. This includes the Operating Expense Ratios, if any, and the 0.110 percent to 0.160 percent Administrative Asset Fee. Utah residents invested in the Public Treasurers’ Investment Fund are not charged the Administrative Asset Fee.For customized investment options, the annual Asset-Based Fees vary between 0.200 percent to 0.595 percent, depending on the underlying investments that the account owner/agent selects. This includes the Operating Expense Ratios, if any, and the 0.200 percent Administrative Asset Fee.The account owner/agent can determine the annual Asset-Based Fee on each account by using the UESP Asset Fee Structure Table in this section and online at uesp.org. Annual Asset-Based Fees for a customized investment option allocation can be calculated using UESP’s Customized Age-Based and Customized Static Allocation and Fee Calculators at uesp.org.The Administrative Asset Fee is calculated and assessed on the last business day of each month that both UESP and the New York Stock Exchange are open. The fee assessment will reduce the number of UESP units in the account on that day.UESP does not charge fees for opening or closing an account, contributions (except by wire transfer), investment option changes, rollovers, transfers, or withdrawals.

UESP charges fees to cover, in part, its expenses for wire transfers, returned contributions, and expedited delivery of a withdrawal check or other documents relating to an account.

OPERATING EXPENSE RATIOS OF THE UNDERLYING FUNDS

Vanguard and Dimensional Fund Operating Expense RatiosVanguard and Dimensional charge an Operating Expense Ratio for each underlying mutual fund. Vanguard and Dimensional expense ratios do not appear on UESP quarterly account statements because the fees are deducted from the applicable underlying fund by Vanguard or Dimensional. An account owner does not own shares in the Vanguard or Dimensional mutual funds. The performance and market values of a UESP account are net of any underlying fund Operating Expense Ratios.

See Notes on page 46.

Ticker Symbol

Total Operating

Expense Ratio Prospectus DateVanguard FundsInstitutional Total Stock Market Index Fund VITPX 0.02% April 27, 2017

Institutional Index Fund VIIIX 0.02% April 27, 2017Value Index Fund 1 VIVIX 0.05% April 27, 2017Growth Index Fund 1 VIGIX 0.05% April 27, 2017Mid-Cap Index Fund VMCPX 0.04% April 27, 2017Small-Cap Index Fund VSCPX 0.04% April 27, 2017Small-Cap Value Index Fund 1, 2 VSIIX 0.06% April 27, 2017Small-Cap Growth Index Fund 1, 2 VSGIX 0.06% April 27, 2017FTSE Social Index Fund VFTSX 0.22% December 22, 2016Total International Stock Index Fund VTPSX 0.07% February 23, 2017Developed Markets Index Fund VDIPX 0.05% April 26, 2017International Value Fund 2, 3 VTRIX 0.43% February 23, 2017International Growth Fund 1, 2 VWILX 0.33% December 22, 2016Emerging Markets Stock Index Fund 2 VEMRX 0.09% February 24, 2017Short-Term Investment-Grade Fund VFSIX 0.07% May 26, 2017Short-Term Bond Index Fund VBIPX 0.04% April 26, 2017Short-Term Inflation-Protected Securities Index Fund1 VTSPX 0.04% January 26, 2017

Total Bond Market Index Fund VBMPX 0.03% April 26, 2017High-Yield Corporate Fund1,2 VWEAX 0.13% May 26, 2017Total International Bond Index Fund VTIFX 0.07% February 23, 2017Dimensional FundsGlobal Allocation 60/40 Portfolio1, 4 DGSIX 0.28% February 28, 2017Global Allocation 25/75 Portfolio1, 4 DGTSX 0.25% February 28, 2017U.S. Large Cap Value Portfolio 1, 5 DFLVX 0.27% February 28, 2017U.S. Small Cap Value Portfolio 1, 2 DFSVX 0.52% February 28, 2017Real Estate Securities Portfolio 1, 2, 4 DFREX 0.18% February 28, 2017U.S. Sustainability Core 1 Portfolio1,4 DFSIX 0.25% February 28, 2017International Value Portfolio 1, 2, 5 DFIVX 0.43% February 28, 2017Global Equity Portfolio 1, 4 DGEIX 0.30% February 28, 2017One-Year Fixed Income Portfolio 1 DFIHX 0.17% February 28, 2017Five-Year Global Fixed Income Portfolio1 DFGBX 0.27% February 28, 2017

P A R T 8 | E X P E N S E S A N D F E E S

Part 8 | ExPEnsEs and FEEs

46 July 14, 2017

Notes1 The fund is available in the Customized Age-Based and Customized Static

investment options only.2 An investment allocation to this fund may not exceed 25 percent in the account.

For the Customized Age-Based investment option, this cap applies to the allocation for each age bracket. Therefore, the total Operating Expense Ratio will reflect the weighted allocation to the underlying investments.

3 The fund was available in the Customized Static investment option only and was closed to new investments beginning on July 25, 2011. However, upon making an investment option change, the 25 percent allocation cap in an account will apply.

4 The total Operating Expense Ratio reflects a fee waiver pursuant to a Fee Waiver Agreement in effect through February 28, 2018. The total Operating Expense Ratio may increase if the Fee Waiver Agreement is not extended beyond February 28, 2018.

5 The total Operating Expense Ratios reflect a permanent, contractual Fee Waiver Agreement with Dimensional Fund Advisors LP.

FDIC-Insured Accounts, Public Treasurers’ Investment Fund Expense RatiosNo Operating Expense Ratios are assessed on the FDIC-insured accounts. The Operating Expense Ratio for the Public Treasurers’ Investment Fund is 0.005 percent, which UESP pays in full.UESP reserves the right to discontinue or limit paying the Operating Expense Ratio on the Public Treasurers’ Investment Fund after giving notice to affected account owners.

Effect on UESP Investment Option Expense RatiosThe allocation of the underlying investments used in the UESP investment options determines the weighted underlying fund Operating Expense Ratio of each UESP investment option. For the UESP investment options that use Vanguard or Dimensional funds, the weighted underlying fund Operating Expense Ratio range is 0.020 to 0.395 percent. The maximum Operating Expense Ratio of 0.395 percent is reached if an account invested in a customized investment option includes a 25 percent allocation (the maximum allowed for certain funds) to each of UESP’s most expensive underlying funds.

UESP ADMINISTRATIVE ASSET FEEUESP charges an annual Administrative Asset Fee of 0.110 percent to 0.200 percent, depending on the selected investment option. UESP waives the Administrative Asset Fee for Utah resident account owners who are invested in the Public Treasurers’ Investment Fund investment option.

Fee Assessments and ExemptionsUESP’s Administrative Asset Fee is calculated and assessed on the last business day of each month that both UESP and the New York Stock Exchange are open. The fee is assessed at a rate of 0.0092 percent to 0.0167 percent (or 0.110 percent to 0.200 percent divided by 12) on an account’s balance.UESP administrative fees are not charged for the month in which the account is closed, as long as the account is closed before the fees are charged.UESP waives the Administrative Asset Fee for Utah resident account owners who are invested in the Public Treasurers’ Investment Fund investment option.

Fee Usage and PurposeFees charged to and deducted from UESP accounts provide the funding necessary for the Utah Higher Education Assistance Authority (UHEAA) to carry out the purposes, objectives, and provisions of UESP. The fees pay for the cost of the services authorized by the UHEAA Board and the Utah Legislature.Administrative fees are used to manage and administer UESP, the costs of which may include:

• Contracting for goods or services, personnel, and professional and managerial assistance

• Paying investment advisors to assist in the investment of money

• Providing administration for UESP• Covering the costs of transactions and services• Procuring insurance• Participating in other programs or promotions for the benefit

of account owners or beneficiaries• Carrying out studies and projections regarding higher

education costs and levels of financial participation needed in UESP

Fees are not used as a source of revenue for State of Utah government operations, nor does the State of Utah subsidize UESP. Fees and charges are subject to change any time upon approval of the UHEAA Board.

TRANSACTION FEESUESP does not charge fees for opening or closing an account, contributions (except through wire transfer), investment option changes, rollovers, transfers, or withdrawals.

Wire Transfer FeeContributions to a UESP account can be made with a wire transfer. UESP will charge a $15 fee to the UESP account for each wire transfer (or allocated proportionally among multiple UESP accounts if wired funds are sent to multiple UESP accounts).

Returned Contribution FeeUESP may assess a $20 fee against each account (prorated among multiple accounts) for a returned check or rejected electronic contribution. In addition, there may be a charge for any market losses or other expenses incurred by UESP due to a returned contribution. Any earnings (including dividends and/or interest) will be retained by UESP for administrative and other purposes. UESP reserves the right to cancel any current or future electronic contributions to a UESP account.

Expedited Delivery FeeDelivery of a withdrawal check or other documents relating to an account may be expedited through an overnight courier.However, UESP reserves the right to charge a fee to the account for the expedited delivery.



UESP ASSET FEE STRUCTURE TABLE

Investment Option

Annual Asset-Based Program FeesEstimated

Underlying Fund Expense Ratios1,*

UESP Administrative Asset Fee2

Total Annual Asset-Based Fees

(a) (b) (a) + (b)AGE-BASED INVESTMENT OPTIONSAGE-BASED AGGRESSIVE GLOBALAge 0-3 0.034% 0.16% 0.194%Age 4-6 0.034% 0.16% 0.194%Age 7-9 0.036% 0.16% 0.196%Age 10-12 0.038% 0.16% 0.198%Age 13-14 0.042% 0.16% 0.202%Age 15 0.042% 0.16% 0.202%Age 16 0.041% 0.16% 0.201%Age 17 0.039% 0.16% 0.199%Age 18 0.038% 0.16% 0.198%Age 19+ 0.036% 0.16% 0.196%AGE-BASED AGGRESSIVE DOMESTICAge 0-3 0.020% 0.16% 0.180%Age 4-6 0.020% 0.16% 0.180%Age 7-9 0.023% 0.16% 0.183%Age 10-12 0.027% 0.16% 0.187%Age 13-14 0.031% 0.16% 0.191%Age 15 0.032% 0.16% 0.192%Age 16 0.033% 0.16% 0.193%Age 17 0.032% 0.16% 0.192%Age 18 0.032% 0.16% 0.192%Age 19+ 0.032% 0.16% 0.192%AGE-BASED MODERATEAge 0-3 0.037% 0.16% 0.197%Age 4-6 0.037% 0.16% 0.197%Age 7-9 0.037% 0.16% 0.197%Age 10-12 0.038% 0.16% 0.198%Age 13-14 0.037% 0.16% 0.197%Age 15 0.036% 0.16% 0.196%Age 16 0.034% 0.16% 0.194%Age 17 0.031% 0.16% 0.191%Age 18 0.028% 0.16% 0.188%Age 19+ 0.024% 0.16% 0.184%AGE-BASED CONSERVATIVEAge 0-3 0.038% 0.16% 0.198%Age 4-6 0.038% 0.16% 0.198%Age 7-9 0.038% 0.16% 0.198%Age 10-12 0.036% 0.16% 0.196%Age 13-14 0.032% 0.16% 0.192%Age 15 0.028% 0.16% 0.188%Age 16 0.023% 0.16% 0.183%Age 17 0.018% 0.16% 0.178%Age 18 0.014% 0.16% 0.174%Age 19+ 0.009% 0.16% 0.169%

STATIC INVESTMENT OPTIONS

EQUITY-100% DOMESTIC 0.020% 0.16% 0.180%EQUITY-30% INTERNATIONAL 0.029% 0.16% 0.189%EQUITY-10% INTERNATIONAL 0.033% 0.16% 0.193%70% EQUITY/30% FIXED INCOME 0.032% 0.16% 0.192%20% EQUITY/80% FIXED INCOME 0.036% 0.16% 0.196%FIXED INCOME 0.040% 0.11% 0.150%PUBLIC TREASURERS’ INV. FUND UTAH RESIDENT3 0.000% 0.00%1,2 0.000%

PUBLIC TREASURERS’ INV. FUND NON-UTAH RESIDENT3 0.000% 0.16% 0.160%

FDIC-INSURED SAVINGS 0.000% 0.16% 0.160%

CUSTOMIZED INVESTMENT OPTIONS

CUSTOMIZED AGE-BASED4,5,6 0.0%-0.395% 0.20% 0.20%-0.595%CUSTOMIZED STATIC4,5,6 0.0%-0.395% 0.20% 0.20%-0.595%

*This is also referred to as the Operating Expense Ratio.

UESP ASSET FEE STRUCTURE TABLE

*This is also referred to as the operating expense ratio.

1 The estimated expenses for each age bracket or investment option represent the weighted averages of the Operating Expense Ratios of the applicable underlying mutual funds in which each investment option is invested. The Operating Expense Ratios for the individual mutual funds are shown under Underlying Fund Operating Expense Ratios on page 45. The Operating Expense Ratios of the mutual funds are charged against the investments in the funds on a daily basis. There are no underlying investment expense ratios assessed on the FDIC-insured accounts. The underlying annual investment expense ratio for the Public Treasurers’ Investment Fund is 0.005 percent, which UESP pays in full. UESP reserves the right to discontinue or limit paying the underlying investment expense ratio on the Public Treasurers’ Investment Fund after giving notice to affected account owners.

2 The UESP Administrative Asset Fee is 0.110 to 0.200 percent annually (0.0092 to 0.0167 percent per month), charged as described under the UESP Administrative Asset Fee section on page 46. UESP waives the Administrative Asset Fee for Utah resident account owners who are invested in the Public Treasurers’ Investment Fund investment option.

3 The underlying annual investment expense ratio for the Public Treasurers’ Investment Fund is 0.005 percent, which UESP pays in full. UESP reserves the right to discontinue or limit paying the underlying investment expense ratio on the Public Treasurers’ Investment Fund after giving notice to affected account owners.

4 The minimum and maximum expenses and fees for the customized investment options are shown as a range that reflects the lowest and highest possible costs, assuming the entire investment option is invested in the least or most expensive underlying investments. Because the underlying fund Operating Expense Ratio varies, the fees will depend on the underlying investment allocation selected by the account owner/agent. The maximum Operating Expense Ratio of 0.395 percent is reached if an account investment in a customized investment option includes a 25 percent allocation (the maximum allowed) to each of UESP’s most expensive underlying funds. Certain accounts invested in funds that are closed to new investment could have a maximum fee of 0.628 percent. Total annual Asset-Based Fees for a customized investment option can be calculated by using UESP’s Customized Age-Based and Customized Static Allocation and Fee Calculators found at uesp.org.

5 The total Operating Expense Ratios for the Global Equity Portfolio, Global Allocation 60/40 Portfolio, Global Allocation 25/75 Portfolio, the DFA Real Estate Securities Portfolio, and the U.S. Sustainability Core 1 Portfolio reflect a fee waiver pursuant to a Fee Waiver Agreement with Dimensional Fund Advisors LP in effect through February 28, 2018. The total Operating Expense Ratio may increase if the Fee Waiver Agreement is not extended beyond February 28, 2018. The total Operating Expense Ratios for the U.S. Large Cap Value Portfolio and the DFA International Value Portfolio reflect a permanent, contractual Fee Waiver Agreement with Dimensional Fund Advisors LP.

6 The total Operating Expense Ratios for the U.S. Large Cap Value Portfolio and the DFA International Value Portfolio reflect a permanent, contractual Fee Waiver Agreement with Dimensional Fund Advisors LP.

Refer to the UESP Approximate Cost of a $10,000 Investment Table on page 48 to determine the projected total cost of UESP fees. The underlying fund operating expense ratios apply to the Vanguard and Dimensional funds included as underlying investments in UESP.


48 July 14, 2017

UESP APPROXIMATE COST OF A $10,000 INVESTMENT TABLEUESP APPROXIMATE COST OF A $10,000 INVESTMENT TABLE

Investment OptionInvestment Period

One Year Three Years Five Years Ten Years

AGE-BASED INVESTMENT OPTIONSAGE-BASED AGGRESSIVE GLOBALAge 0-3 $19.87 $62.51 $109.35 $247.62 Age 4-6 $19.87 $62.51 $109.35 $247.62 Age 7-9 $20.07 $63.15 $110.47 $250.15 Age 10-12 $20.28 $63.79 $111.59 $252.68 Age 13-14 $20.68 $65.08 $113.84 $257.73 Age 15 $20.68 $65.08 $113.84 $257.73 Age 16 $20.58 $64.76 $113.27 $256.47 Age 17 $20.38 $64.12 $112.15 $253.94 Age 18 $20.28 $63.79 $111.59 $252.68 Age 19+ $20.07 $63.15 $110.47 $250.15 AGE-BASED AGGRESSIVE DOMESTICAge 0-3 $18.43 $58.01 $101.49 $229.92 Age 4-6 $18.43 $58.01 $101.49 $229.92 Age 7-9 $18.74 $58.97 $103.18 $233.72 Age 10-12 $19.15 $60.26 $105.42 $238.77 Age 13-14 $19.56 $61.54 $107.67 $243.83 Age 15 $19.66 $61.87 $108.23 $245.10 Age 16 $19.76 $62.19 $108.79 $246.36 Age 17 $19.66 $61.87 $108.23 $245.10 Age 18 $19.66 $61.87 $108.23 $245.10 Age 19+ $19.66 $61.87 $108.23 $245.10 AGE-BASED MODERATEAge 0-3 $20.17 $63.47 $111.03 $251.41 Age 4-6 $20.17 $63.47 $111.03 $251.41 Age 7-9 $20.17 $63.47 $111.03 $251.41 Age 10-12 $20.28 $63.79 $111.59 $252.68 Age 13-14 $20.17 $63.47 $111.03 $251.41 Age 15 $20.07 $63.15 $110.47 $250.15 Age 16 $19.87 $62.51 $109.35 $247.62 Age 17 $19.56 $61.54 $107.67 $243.83 Age 18 $19.25 $60.58 $105.98 $240.04 Age 19+ $18.84 $59.30 $103.74 $234.98 AGE-BASED CONSERVATIVEAge 0-3 $20.28 $63.79 $111.59 $252.68 Age 4-6 $20.28 $63.79 $111.59 $252.68 Age 7-9 $20.28 $63.79 $111.59 $252.68 Age 10-12 $20.07 $63.15 $110.47 $250.15 Age 13-14 $19.66 $61.87 $108.23 $245.10 Age 15 $19.25 $60.58 $105.98 $240.04 Age 16 $18.74 $58.97 $103.18 $233.72 Age 17 $18.23 $57.37 $100.37 $227.39 Age 18 $17.82 $56.08 $98.12 $222.32 Age 19+ $17.31 $54.47 $95.32 $215.99

STATIC INVESTMENT OPTIONS

EQUITY-100% DOMESTIC $18.43 $58.01 $101.49 $229.92 EQUITY-30% INTERNATIONAL $19.35 $60.90 $106.54 $241.30 EQUITY-10% INTERNATIONAL $19.76 $62.19 $108.79 $246.36 70% EQUITY/30% FIXED INCOME $19.66 $61.87 $108.23 $245.10 20% EQUITY/80% FIXED INCOME $20.07 $63.15 $110.47 $250.15 FIXED INCOME $15.36 $48.36 $84.64 $191.90 PUBLIC TREASURERS’ INV. FUND UTAH RESIDENT1 $0.00 $0.00 $0.00 $0.00

PUBLIC TREASURERS’ INV. FUND NON-UTAH RESIDENT1 $16.39 $51.58 $90.26 $204.58

FDIC-INSURED SAVINGS $16.39 $51.58 $90.26 $204.58

CUSTOMIZED INVESTMENT OPTIONS

CUSTOMIZED AGE-BASED2,3,4 $20.48-$60.81 $64.44-$190.59 $112.71-$332.05 $255.20-$743.96CUSTOMIZED STATIC2,3,4 $20.48-$60.81 $64.44-$190.59 $112.71-$332.05 $255.20-$743.96

The table compares the approximate cost of investing in UESP over different periods of time. The actual cost may be higher or lower. The table is based on the following assumptions:

• A $10,000 investment invested for the time periods shown.

• A 5 percent annually compounded rate of return on the amount invested throughout the period.

• All units are redeemed at the end of the period shown for qualified higher education expenses.

• The table does not consider the impact of any potential federal or state taxes on the redemption.

• Total annual asset-based fees remain the same as those presented in the UESP Asset Fee Structure Table on page 45 and are reflected in this table as an annual fee assessed on the average yearly balance.

The Vanguard and Dimensional Operating Expense Ratios apply to the Vanguard and Dimensional funds, respectively. There are no underlying investment expense ratios assessed on the FDIC-insured accounts. Notes1 The underlying investment expense ratio for the Public

Treasurers’ Investment Fund is 0.005 percent, which UESP pays in full. UESP reserves the right to discontinue or limit paying the underlying investment expense ratio on the Public Treasurers’ Investment Fund after giving notice to affected account owners.

2 The ranges shown for the customized investment options reflect the lowest and highest possible costs, assuming the entire investment option is invested in the least or most expensive underlying investments. However, the cost of the investments will depend on the underlying investment allocation chosen by the account owner/agent. Certain accounts invested in funds that are closed to new investment could have a maximum fee of $64.17, $201.06, $350.17, and $783.89 for one year, three years, five years, and ten years, respectively. Total annual asset-based fees for a customized investment option allocation can be calculated by using UESP’s Customized Age-Based or Customized Static allocation and fee calculators at uesp.org.

3 The total Operating Expense Ratios for the Global Equity Portfolio, Global Allocation 60/40 Portfolio, Global Allocation 25/75 Portfolio, the DFA Real Estate Securities Portfolio, and the U.S. Sustainability Core 1 Portfolio reflect a fee waiver pursuant to a Fee Waiver Agreement with Dimensional Fund Advisors LP in effect through February 28, 2018. The total Operating Expense Ratio may increase if the Fee Waiver Agreement is not extended beyond February 28, 2018.

4 The total Operating Expense Ratios for the U.S. Large Cap Value Portfolio and the DFA International Value Portfolio reflect a permanent, contractual Fee Waiver Agreement with Dimensional Fund Advisors LP.

9


This section summarizes the federal and Utah state income tax benefits that may be available to individuals, trusts,

and corporations with a Utah Educational Savings Plan (UESP) account. The section describes exemptions from federal and Utah state income tax on investment earnings used for qualified higher education expenses, as well as tax penalties for withdrawals that are not used for qualified higher education expenses. Included is information on Utah state income tax credits and deductions available to Utah taxpayers.

GENERAL INFORMATIONUESP is designed to provide account owners and beneficiaries with federal tax benefits as a qualified tuition program under Section 529 of the Internal Revenue Code (IRC). The federal and state tax considerations associated with investing in UESP are complex, and changes to federal or state tax laws could affect the tax treatment of money in a UESP account. Tax law changes may alter the benefits, requirements, and flexibility of UESP accounts.In January 2008, the Internal Revenue Service (IRS) issued an advance notice of proposed rulemaking under IRC Section 529. The notice provides that previously proposed regulations relating to the tax treatment of 529 plans will be reissued and those previously proposed regulations will provide a general anti-abuse rule that may have a retroactive effect. As of the date of this Program Description, neither new proposed regulations nor any final regulations governing Section 529 have been issued. Consult a tax advisor for more information.Section 529 qualified tuition programs are intended to be used only to save for qualified higher education expenses. These programs are not intended to be used, nor should they be used, by any taxpayer for the purpose of evading federal or state taxes or tax penalties. Opening a 529 plan account for any purpose other than to save for qualified higher education expenses of a designated beneficiary is inappropriate. You may wish to seek advice from a tax advisor based on your own particular circumstances.An account owner/agent should consult a tax advisor regarding his or her individual tax situation before investing in UESP. UESP, the Utah Higher Education Assistance Authority (UHEAA) Board, and their employees do not provide tax advice and do not assume any responsibility for the tax consequences of investing in UESP.The tax benefits from investing in UESP only result when an account is opened and maintained to save for qualified higher education expenses.

FEDERAL TAX CONSIDERATIONSContributions to an account are not deductible for federal income tax purposes. However, earnings on investments in an account grow federally tax-deferred. As long as the funds are used for qualified higher education expenses of the beneficiary at an eligible educational institution, withdrawals from an account will generally not be subject to federal income tax.An account owner/agent may withdraw money to use for nonqualified purposes. However, the earnings portion of the withdrawal will be subject to federal income tax as ordinary income and, in certain circumstances, a 10 percent federal tax penalty. The recipient of a nonqualified withdrawal is responsible for paying applicable taxes.A withdrawal will not be subject to the 10 percent federal tax penalty on the earnings if the beneficiary:

• has died or is disabled• has received a scholarship (limited to no more than the

amount of the scholarship)• is attending a U.S. service academy• is claiming certain federal education credits such as the

American Opportunity and Lifetime Learning CreditsSee Part 6 | Withdrawals for details on how withdrawals are processed. The calculation of the taxable portion of any withdrawal will be made as of the date the withdrawal is made.

Estate Tax and Gift Tax ConsiderationsContributions to a UESP account are treated as a completed gift to the beneficiary for federal estate and gift tax purposes. Generally, funds held in an account are not included as part of an account owner/agent’s estate, though the account owner/agent remains in control of the money. Because the contribution is considered to be a completed gift, gift tax and generation-skipping transfer tax rules apply.A special provision for 529 plans allows a person to make a gift of $70,000 ($140,000 if married filing jointly) to a single beneficiary in one year without creating a taxable gift if the person makes an election on IRS Form 709 to treat the entire gift as a series of five equal annual gifts. This means that a $70,000 five-year averaging election counts as a series of five $14,000 contributions, and a $140,000 five-year averaging joint election counts as a series of five $28,000 contributions. The account owner/agent cannot make any additional gifts to that beneficiary during the five-year period without being subject to federal gift tax rules.If the account owner/agent dies before the five-year period has elapsed, the portion of the contribution allocable to the calendar

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50 July 14, 2017

years remaining in the five-year period after the date of death are included in the estate for estate tax purposes.

Supplemental Contributions Due to Exclusion Increases If the IRS increases the annual gift tax exclusion, a person who took advantage of the five-year averaging election in a previous year is allowed to make an additional gift to the same beneficiary in each of the remaining years of the five-year election, beginning with the year that the gift tax exclusion increased.For example, in 2013, the annual gift tax exclusion increased from $13,000 to $14,000 per individual taxpayer, a difference of $1,000. A person who files an individual tax return can make a $1,000 supplemental contribution in each year that remains in his or her five-year election period, beginning with the year that the gift tax exclusion increased. The following table provides an example of how to make supplemental contributions.

Year 1 (2012)

Year 2 (2013)

Year 3 (2014)

Year 4 (2015)

Year 5 (2016)

InitialContribution $65,000

Averaged gift $13,000





AdditionalContributions $1,000 $1,000 $1,000 $1,000

Account owners who file joint tax returns can also make supplemental contributions. For example, for a person who files a tax return, the annual gift tax exclusion increased in 2013 from $26,000 to $28,000 for that person and his or her spouse, a difference of $2,000. That person can make a $2,000 supplemental contribution to the same beneficiary each year that is left in the five-year election period, beginning with the year that the gift tax exclusion increased. The following table illustrates how to make supplemental contributions.

Year 1 (2012)

Year 2 (2013)

Year 3 (2014)

Year 4 (2015)

Year 5 (2016)

InitialContribution $130,000






AdditionalContributions $2,000 $2,000 $2,000 $2,000

Federal gift tax and generation-skipping transfer tax consequences are possible if an account is rolled over or transferred to a new beneficiary who is not a “member of the family” of the current beneficiary or who is in a younger generation than the current beneficiary.

These federal tax provisions are complex, and you should consult a tax advisor regarding how estate, gift, and generation-skipping transfer taxes apply to your particular situation.

American Opportunity and Lifetime Learning Tax CreditsAn account owner/agent may take either an American Opportunity Tax Credit or a Lifetime Learning Tax Credit (collectively referred to herein as “Tax Credits”) in the same year that money from a UESP account is withdrawn. However, federal regulations do not allow tax-exempt earnings from a UESP account to be used for these Tax Credits.Money in a UESP account may be used for room and board, books, computers, and supplies that do not qualify for these Tax Credits. Other funding sources can be used to pay for tuition and required fees that qualify for these Tax Credits. Any tax-free UESP earnings used to pay tuition and fees will reduce the amount eligible for these Tax Credits.A number of federal education tax benefits are available in addition to the tax benefits available to 529 plan participants. Federal tax laws provide rules intended to coordinate these tax benefits among the Tax Credits, Coverdell Education Savings Accounts (ESAs), certain U.S. Savings Bonds, deductions for higher education expenses, and other education tax benefits. For more information, see IRS Publication 970, Tax Benefits for Education, available at irs.gov.If you are considering using more than one of these tax benefits, you should consult a tax advisor on how the rules that apply to these benefits may affect your situation.

IRS Form 1099-QFederal tax law requires UESP to issue IRS Form 1099-Q for the taxable year when money is withdrawn from an account for any purpose, including rollovers to another 529 plan. The account owner/agent or beneficiary who receives the form is responsible for tax reporting to the IRS. This information should be used in preparing tax returns for the year.Earnings do not need to be reported on federal income tax returns if the withdrawal is used for qualified higher education expenses.

Individual and Institutional AccountsIf the withdrawal was sent to the beneficiary or an eligible educational institution, UESP will mail IRS Form 1099-Q to the beneficiary by January 31 of the following year. If the withdrawal was sent to the account owner or rolled over to another 529 plan, the account owner will receive IRS Form 1099-Q.

UGMA/UTMA AccountsBecause the beneficiary is considered the account owner, the beneficiary will receive IRS Form 1099-Q, regardless of the payee named on the withdrawal.



Maintaining Expense RecordsThe account owner/agent or beneficiary, as applicable, is responsible for any filings with the IRS and for maintaining adequate records, including obtaining and keeping receipts or other documentation that show withdrawals were used for qualified higher education expenses. This information may be requested by the IRS or the appropriate state tax authority.

STATE TAX CONSIDERATIONSNon-Utah taxpayers and residents: You should determine whether the state in which you or your beneficiary pays taxes or lives offers a 529 plan that provides state tax or other benefits not otherwise available to you by investing in UESP. You should consider such state tax treatment and benefits, if any, before investing in UESP. A Utah taxpayer who participates in a 529 plan other than UESP will not receive a Utah state income tax credit or deduction for contributions made to other 529 plans.Investment earnings in an account are not subject to Utah state income tax if the money is used for the qualified higher education expenses of the beneficiary at an eligible educational institution.The account owner/agent may use a withdrawal for nonqualified purposes. However, a Utah taxpayer resident who makes a nonqualified withdrawal will be subject to ordinary Utah state income tax on the earnings portion of the withdrawal. The recipient of a nonqualified withdrawal is responsible for paying applicable taxes.A Utah taxpayer who is an account owner, including a Utah trust, may take a tax credit up to certain limits (see tables on pages 51 and 52) for contributions to his or her account that are funded with Utah taxable income. A Utah corporation may take a tax deduction up to certain limits for contributions to its account with Utah taxable income. No Utah tax benefits are permitted for contributions to other 529 plans or for UESP internal transfers.The beneficiary must be younger than age 19 when designated on the account for the account owner to claim a Utah state income tax credit or deduction for contributions made to the beneficiary’s account. If this requirement is met, the account owner is eligible for the Utah state income tax credit or deduction each year a contribution is made for the life of the account.However:

• If the beneficiary of the account is changed to a beneficiary age 19 or older, all additional contributions to the account are ineligible for the Utah state income tax credit or deduction

• If the beneficiary of an account whose previous beneficiary was age 19 or older when the account was opened is changed to a beneficiary younger than age 19, all new contributions to the account, but not past contributions, are eligible for the Utah state income tax credit or deduction

For additional details, see Utah Tax Recapture (Addback) on page 52.

The Utah state income tax credit or deduction for contributions to a UESP account is available only to Utah taxpayers. A Utah account owner may receive Utah state income tax benefits for eligible contributions made to his or her account by a third party. A Utah taxpayer may not claim Utah state income tax benefits for contributions made to an account for which the taxpayer is not the account owner.The Utah state income tax credit and deduction amount may be adjusted by UESP each year based on changes in the Consumer Price Index. The Utah state income tax credit does not phase out based on the taxpayer’s income.

Utah IndividualsSingle Tax ReturnFor the 2017 tax year, Utah taxpayers filing a single individual, head of household, married filing separately, or qualifying widow(er) tax return can claim a 5 percent Utah state income tax credit per qualified beneficiary for contributions up to $1,920.

Joint Tax ReturnFor the 2017 tax year, Utah taxpayers who are married and filing a joint tax return can claim a 5 percent Utah state income tax credit per qualified beneficiary for contributions up to $3,840.Married couples are not required to have separate UESP accounts to claim the joint tax benefits. However, if both spouses own separate accounts for the same beneficiary, each will receive a Utah state tax form TC-675H for his or her account. In this case, their aggregated maximum Utah state income tax credit is limited to one joint tax credit per qualified beneficiary.

Tax FilerUESP

Account Type


Tax Credit



Single Individual $1,920 $96Joint Individual $3,840 $192

Utah State Income Tax Credit ExampleThe table below illustrates the impact of contributions and the Utah state income tax credit for a joint income tax return.

2017 ContributionsTax Credit

Percentage2017 Utah State Income

Tax Credit

$0-$3,839.99 x 5% = Product of contributionmultiplied by 5%

$3,840.00 x 5% = $192

$3,840.00 x 5% = $192 + amounts over x $3,840.00

0% = $0$192

UGMA/UTMA AccountsBecause of the special nature of UGMA/UTMA accounts, only the account owner (who is also the beneficiary), not the UGMA/UTMA account agent, is eligible for state tax benefits, even if the account owner is a minor.


52 July 14, 2017

Utah TrustsFor the 2017 tax year, Utah-based trusts can claim a 5 percent Utah state income tax credit for contributions up to $1,920 per qualified beneficiary. Utah-based grantor trusts whose grantor filing status is married and filing jointly can claim a 5 percent Utah state income tax credit for contributions up to $3,840 per qualified beneficiary.

Tax FilerUESP

Account Type


Tax Credit



Trusts Institutional $1,920 $96Grantor Trust, Married Filing Jointly

Institutional $3,840 $192

Utah CorporationsFor the 2017 tax year, Utah-based corporations can claim a Utah state income tax deduction for contributions up to $1,920 per qualified beneficiary. A joint tax deduction is not allowed for institutional accounts, including corporations.

Tax FilerUESP

Account Type


Tax Deduction

2017 Maximum Utah State Income Tax Deduction per

BeneficiaryCorporation Institutional $1,920 $1,920

Nonresidents and Part-Year Utah ResidentsA nonresident is a person who is not a Utah resident but has Utah taxable income. A part-year Utah resident is a person who has moved into or out of Utah during the tax year or who lives in Utah seasonally.A nonresident or part-year Utah resident can claim only a prorated amount of the Utah state income tax credit. The apportioned tax credit is based on the percentage of income the account owner earned and received in Utah of his or her total income during the tax year. This percentage is calculated by dividing the modified Utah adjusted gross income earned (Utah state taxable income) by the account owner’s modified federal adjusted gross income. The Utah state income tax credit is then multiplied by that percentage, and the result is the apportioned tax credit that may be claimed on the account owner’s Utah state income tax return.

Utah State Tax Form TC-675H—Utah Educational Savings Plan Tax Statement for Contributions, Withdrawals and TransfersAt the conclusion of each tax year, UESP will mail Utah state tax form TC-675H—Utah Educational Savings Plan Tax Statement for Contributions, Withdrawals and Transfers, to each Utah taxpayer account owner by January 31 of the following year. A Utah taxpayer who does not receive a Utah state tax form TC-675H in the mail can download the form under Account Access at uesp.org or contact UESP to request a duplicate. A

Utah taxpayer who is not living in Utah must contact UESP to request form TC-675H.The form states the allowable amount contributed to an account during the year that may be credited or deducted by the account owner on the Utah state income tax return. The form also provides the amount of withdrawals made from each account during the year. The account owner should carefully review Utah state tax form TC-675H instructions.The Utah state income tax credit or deduction is limited to contributions made to an account whose beneficiary was younger than age 19 when originally designated on the account.UESP transmits the information on Utah state tax form TC-675H to the Utah State Tax Commission. An account owner/agent who submits different information to the Utah Tax Commission may delay the processing of his or her Utah state income tax return and/or trigger a tax audit. If any information on the form is incorrect, contact UESP toll-free at 800.418.2551.

Utah Tax Recapture (Addback)Except as described under the Circumstances Exempt from Tax Recapture subsection below, recapture (addback) of any Utah state income tax credit or deduction is mandatory when there are nonqualified withdrawals, certain changes in beneficiaries, transfers of account money, and rollovers to another 529 plan. The amount to be recaptured (added back) is limited (1) to the sum of all previous credits and deductions, and (2) contributions used to calculate UESP income tax credits and deductions. The amount of any prior-year contributions used to calculate a credit or deduction must be added to the account owner’s Utah taxable income for the contribution portion of:

• Any withdrawal from an account that was not used for qualified higher education expenses

• A change in beneficiary from one who was younger than age 19 when originally designated on the account to a new beneficiary who is age 19 or older

• A transfer of funds from an account whose beneficiary was younger than age 19 when designated on the account to the account of another beneficiary who was age 19 or older when his or her account was opened

• A rollover to another 529 planThe addition of any Utah state income tax credit or deduction to Utah taxable income must be made in the year the nonqualified withdrawals, changes, transfers, or rollovers occurred. A Utah state income tax credit or deduction for the current year is not permitted for current-year contributions that result in a nonqualified withdrawal, change, or transfer.

Circumstances Exempt from Tax RecaptureThe account owner/agent may take a nonqualified withdrawal that is not subject to the recapture of any previously claimed Utah state income tax credit or deduction if the beneficiary is unable to use the money in an account due to the beneficiary’s death, disability, receipt of a scholarship (up to the amount of the



scholarship), or attendance at a U.S. service academy. However, the earnings portion of the nonqualified withdrawal may be subject to Utah state income taxes.Rather than take a nonqualified withdrawal, the account owner/agent may choose to transfer the account funds to another qualified beneficiary who is a “member of the family” of the previous beneficiary, or, in the case of a scholarship, use the money for other qualified higher education expenses not covered by the scholarship.

Contributing a Utah State Income Tax Refund to a UESP AccountA Utah taxpayer may elect on the Utah state individual income tax return to contribute a portion or all of his or her Utah state income tax refund to UESP account(s) that he or she owns.The Utah state income tax credit is available for the tax year the contribution is made.

If a Utah taxpayer has more than one account, the tax refund contribution will be apportioned equally among all individual accounts owned by that taxpayer. If taxpayers are filing jointly, the contribution will be apportioned equally among all individual accounts owned by both taxpayers.If a Utah taxpayer does not have an account but indicates on a Utah state individual income tax return that he or she wishes to make a contribution, UESP will return the tax refund to the taxpayer without interest or earnings along with information about how to open an account.The federal and state tax provisions summarized in Part 9 | Tax Considerations are complex, and each taxpayer’s situation is unique. You should consult a tax advisor to determine the effect of federal and state tax laws on your particular situation. Individual tax situations vary greatly, and UESP cannot provide legal or tax advice concerning the tax consequences for any particular person resulting from participation in UESP.

See 2017 Year-End Deadlines, page 60.

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This section describes various tax and other risks associated with opening a Utah Educational Savings Plan (UESP)

account. UESP does not guarantee investments. Accounts may lose value. However, Federal Deposit Insurance Corporation (FDIC) insurance is provided for FDIC-insured accounts. This section also covers potential tax law changes and federal financial aid risks.

UNDERSTANDING INVESTMENTS

Changes to Investment OptionsUESP and the State of Utah reserve the right to change the investment options or underlying investments available to UESP accounts, the managers of the underlying investments, and/or the fees charged to account owners without prior notice in order to meet the purposes of UESP, the Utah State Board of Regents, and the Utah Higher Education Assistance Authority (UHEAA) Board; and to comply with federal and state laws and regulations. Any changes could affect the investment risk and performance of the accounts.

Investment Return or Principal PreservationNeither the State of Utah nor UESP makes any guarantees concerning the rate of return or preservation of principal (basis) of contributions to accounts. Accounts are not backed by the full faith and credit of the State of Utah or guaranteed by UESP, its employees, or members of the UHEAA Board. Account owners assume all investment risk, including the loss of principal or investment. The UHEAA Board and its employees are not registered securities or investment advisors. They do not make investment recommendations or give advice, and they do not assume any responsibility for the investment performance of UESP.

Account Value/Loss of PrincipalThe value of a UESP account may vary depending on market conditions and the performance of the investment option selected. It could be more or less than the amount contributed. In short, the investment could lose value. However, subject to the application of the rules and regulations of Sallie Mae Bank and U.S. Bank (the “Banks”) and the FDIC, money in the FDIC-Insured investment option, or money allocated to a portion of another investment option that includes the FDIC-insured accounts as an underlying investment, will retain its value. An account owner/agent should periodically assess and, if

appropriate, adjust his or her investment choices to match his or her time horizon, risk tolerance, and investment objectives.An account owner/agent should periodically assess and, if appropriate, adjust his or her investment choices to match his or her time horizon, risk tolerance, and investment objectives.

FDIC InsuranceExcept for the underlying investment specified below, investments in UESP are not insured by the FDIC.FDIC insurance, up to applicable FDIC limits, is provided for the FDIC-insured accounts held in trust by UESP at the Banks. Contributions to and earnings on the FDIC-insured accounts for each UESP account owner are apportioned between the Banks according to the following percentages: Sallie Mae Bank (90 percent) and U.S. Bank (10 percent). Money in the FDIC-insured accounts is insured by the FDIC on a pass-through basis to each account owner up to the maximum amount set by federal law, which is $250,000 at each Bank. The amount of FDIC insurance provided to an account owner at each Bank is based on the total of (1) the proportional value of an account owner’s investment in the FDIC-insured accounts at each Bank, plus (2) the value of the account owner’s other personal bank accounts (if any) held at each Bank, as determined by the Banks and by FDIC regulations.

No Other Insurance; No GuaranteesInvestments in UESP are not insured or guaranteed by the State of Utah, UESP, the Utah State Board of Regents, UHEAA, other state agencies, federal government agencies (except to the extent noted above regarding FDIC insurance), or any employees or directors of any such entities. Units in UESP have not been registered with the United States Securities and Exchange Commission (SEC) or with any state securities agency.

HIGHER EDUCATION COSTS AND ATTENDANCE

Higher Education CostsNeither UESP nor the State of Utah offers any guarantees regarding the future costs of higher education or the ability of an account to cover these qualified higher education expenses for any beneficiary. The total amount of qualified higher education expenses for the beneficiary may exceed the balance in a UESP account.

P A R T 1 0 | K E Y R I S K F A C T O R S

Part 10 | Key risK Factors


Higher Education AttendanceThere is no guarantee that a beneficiary will be accepted to an institution of higher education, or that a beneficiary will remain enrolled at or receive a degree from an eligible educational institution. UESP does not provide advice or help in applying to institutions of higher education or calculating the costs of attendance. If a beneficiary does not attend an eligible educational institution and money is withdrawn from an account, the withdrawal will be subject to taxes and tax penalties.

POTENTIAL CHANGES

Federal and State Tax Law ChangesLaws pertaining to federal and state tax treatment of money in 529 plans are subject to change. UESP does not offer any assurance as to the timing or nature of any changes, or the laws’ effect on the favorable treatment of UESP accounts.In January 2008, the Internal Revenue Service (IRS) issued an advance notice of proposed rulemaking under Internal Revenue Code Section 529. The notice provides that previously proposed regulations relating to the tax treatment of 529 plans will be reissued and those previously proposed regulations will provide a general anti-abuse rule that may have a retroactive effect.As of the date of this Program Description, neither proposed regulations nor any final regulations governing Section 529 have been issued. Consult a tax advisor for more information.

Changes to UESPUHEAA and the Utah Legislature reserve the right to discontinue or change any aspect of UESP. Certain account owners/agents may be prohibited from participating in certain changes, at the discretion of the UHEAA Board, if their accounts were opened before the change. Changes may include, but are not limited to, fee structure, investment options available, underlying funds used in investment options, investment managers, other program managers, and operational requirements and offerings.

Suspension of OperationsUESP’s hours of operation are Monday through Friday, 8 a.m. to 5 p.m. MT. UESP will be closed for federal, State of Utah, and other Utah State Board of Regents holidays. UESP may also temporarily suspend certain operations due to closures of securities markets, banks, or other organizations with which UESP conducts business.UESP reserves the right to cease operations or temporarily suspend services any time and without notice.

FEDERAL FINANCIAL AID RISKSSection 529 college savings plans such as UESP are considered “qualified education benefits” and typically are reported as the account owner’s asset in a financial aid needs analysis.

Beginning with the academic year 2009–2010, 529 plan accounts owned by dependent students are included in financial aid needs analyses. However, these accounts will be deemed to be owned by the student’s parents, and only a portion of the value of the account(s) will be included in the calculation of the Expected Family Contribution (EFC) for the financial aid needs analysis.The exact portion of the 529 account that is included in the EFC calculation depends on variables, including whether the student’s family has a one- or two-parent income and on the age of the older parent. Currently, the portion of the account value to be included in the calculation is approximately 3 percent to 6 percent.If an independent student or the student’s spouse is the 529 plan account owner, the value of the account is included in the needs analysis as the student’s asset. In this case, the portion of the asset value included in the EFC calculation will depend on the student’s age and marital status. The maximum portion of the account value included in the calculation will be 20 percent.Qualified withdrawals are not considered “base-year income” and thus will not be included as income in the year in which the 529 plan account withdrawal is received. Additionally, 529 plan account withdrawals are not considered financial assistance already received when determining federal student aid.An individual should contact the financial aid office of a specific higher education institution regarding his or her individual financial aid circumstances. Money in a UESP account could affect eligibility for other need-based financial aid and scholarship opportunities of the beneficiary. UESP provides no assurance as to the future effects of the account on financial aid eligibility. An account owner should carefully evaluate any possible financial aid alternatives for the beneficiary before opening an account.

Medicaid and Other Federal and State BenefitsA UESP account may be considered an asset of the account owner/agent or beneficiary for Medicaid or other need-based federal or state benefit programs. It is possible that a UESP account will be viewed as a “countable resource” in determining an individual’s financial eligibility for Medicaid. Withdrawals from an account during certain periods also may delay the ability to qualify for Medicaid benefits.Consult an advisor or contact the federal or state agency that administers a particular benefit program to determine how a UESP account will be treated.

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56 July 14, 2017

This section describes the privacy policy of the Utah Educational Savings Plan (UESP), as well as how an

account owner/agent can safeguard his or her accounts. The section also provides legal and other information relating to UESP accounts, including limits on UESP responsibilities, limits on protection from creditors under federal bankruptcy laws, and a warning that account owners and beneficiaries will not be compensated for damages caused by events beyond the control of UESP.

QUARTERLY ACCOUNT STATEMENTSUESP quarterly account statements will be sent to the account owner/agent. People with interested party or LPOA access are able to view quarterly account statements online. The quarterly account statement will be deemed conclusive and accurate unless the account owner/agent advises UESP in writing of any objection or concern within 60 calendar days following the end of the quarter.

If You Suspect an ErrorAn account owner/agent who needs additional information or believes a quarterly account statement contains errors can mail or fax a letter of inquiry or objection to UESP. Letters should include:

• The name of the account owner/agent• Account number• Description of any suspected errors• Dollar amount of the suspected errors• Effective dates of the transactions in question• An explanation of why the account owner/agent believes the

errors existBecause the confidentiality of email cannot be guaranteed, an account owner/agent should not include detailed information in an email to UESP. Instead, he or she should write or fax a letter. An account owner/agent may call UESP, but doing so will not establish or verify his or her objection to the statement.

If the Account Appears InactiveUESP will discontinue mailing a quarterly account statement and classify the account as inactive if the U.S. Postal Service returns the statement as undeliverable for at least four consecutive quarters. An account owner/agent should keep contact information on record with UESP current to ensure uninterrupted delivery of quarterly account statements.

If three consecutive email notices are returned to UESP as undeliverable, the quarterly account statement will be sent by mail.

NO PLEDGING AS SECURITY FOR A LOANUnder Section 529 of the Internal Revenue Code and UESP program rules, funds in UESP or any other 529 plan may not be assigned or pledged as security for a loan. Any pledge of interest in an account will be of no force and effect.

LIMITS ON REPRESENTATIONSInformation and statements contained in the Program Description that represent opinions, estimates, forecasts, or other information—expressly described or not—are intended solely as such and should not be construed as statements of fact.

INFORMATION SUBJECT TO CHANGEThe information in this Program Description supersedes all previous Program Descriptions and Supplements and is believed to be accurate as of the date of its publication, but is subject to change without notice. No one is authorized to provide information that differs from the information in the most current issue of this Program Description, including any Supplements or amendments.

Special Considerations In addition to rights expressly stated elsewhere in this Program Description, UESP reserves the right to:

• Reject a form that is not in good order• Reject a form that is completed, but is superseded by an

updated version of the form• Reject a form that is dated with a signature more than

60 calendar days old• Reject a form that is signed by a person without a Signature

Card on file with UESP• Change the UESP Administrative Asset Fee, any other fees,

and the investment options or underlying investments offered to an account owner/agent

• Freeze an account; close an account; or refuse, change, discontinue, or temporarily suspend account services, including accepting contributions, processing investments, changing beneficiaries, and processing withdrawal requests, for any reason

P A R T 1 1 | O T H E R L E G A L A N D A D M I N I S T R A T I V E I N F O R M A T I O N

Part 11 | Other LegaL and administrative infOrmatiOn


• Freeze an account when UESP reasonably believes fraudulent, suspicious, or illegal activity may occur or has occurred

• Freeze an account when UESP has received reasonable notice of a dispute regarding the funds in an account

• Freeze an account upon notification to UESP of the death of an account owner until UESP receives required documentation in good order

• Freeze an account if UESP discovers an account has been established for purposes other than to save for qualified higher education expenses

• Withdraw funds from an account without the account owner/agent’s permission in cases of threatening conduct, or suspicious, fraudulent, or illegal activity

• Delay sending out the proceeds of a withdrawal request (this generally applies to large withdrawal requests without advance notice or during unusual market activity)

• Suspend the processing of withdrawal requests or postpone sending out the proceeds of a withdrawal request when the New York Stock Exchange (NYSE), bond market, or banks are closed for any reason other than their usual weekend or holiday closings, when trading is restricted by the United States Securities and Exchange Commission (SEC), or under any emergency circumstances

• Conduct promotions and special offers with conditions on participation, including those that limit participation to a Utah resident account owner/agent and/or his or her beneficiaries

The risk of market loss, tax implications, penalties, and any other expenses as a result of an account change, freeze, delayed transaction, account closure, or withdrawal of account funds will be solely the account owner’s responsibility.

PROVISION FOR PERIODIC AUDITSUESP’s financial statements are audited annually by the Utah state auditor and will be available for account owner/agent review. Call UESP toll-free at 800.418.2551 to arrange to review a copy.

EXTRAORDINARY EVENTSUESP, the Utah Higher Education Assistance Authority (UHEAA) Board, and the State of Utah are not liable for any loss to an account owner caused directly or indirectly by government restriction; exchange or market rulings; suspension of trading; war; acts of terrorism; forces of nature; strikes; changes in federal law, state law, or tax law; or other conditions beyond their control.

NO INDEMNIFICATIONUESP, the UHEAA Board, the State of Utah, and their board members, officers, employees, or associated persons will not indemnify an account owner/agent, beneficiary, or contributor to accounts against any damages, losses, or other claims arising from their official or unofficial acts, whether negligent or otherwise.

UESP uses reasonable procedures to confirm that transaction requests on accounts are genuine. However, UESP is not responsible for any losses arising from fraudulent or unauthorized instructions that it believes to be genuine. An account owner/agent should keep information confidential and review any confirmations and quarterly account statements received from UESP.All confirmations and quarterly account statements will be deemed conclusive and accurate unless the account owner/agent advises UESP in writing of any objection or concern within 60 calendar days of receipt. If an account owner/agent suspects fraudulent activity on an account, he or she should contact UESP immediately.

LIMITS ON PROTECTION FROM CREDITORSFederal bankruptcy law protects certain 529 plan accounts if the beneficiary is the child, stepchild, grandchild, or step-grandchild of the debtor. The protection covers 529 plan funds that have been in the account for at least 720 calendar days. For funds in accounts held for less than 720 calendar days but more than 365 calendar days, the protection is only for the first $6,225 of the account balance in a 529 plan. There is no protection for funds held less than 365 calendar days. Those funds are fully available to the bankruptcy estate to pay creditors.Utah law does not currently provide any additional protection against creditors for funds held through UESP. A person should consult his or her advisor regarding any specific protections that may be available in other states.

PRIVACY POLICYUESP respects the right to privacy of an account owner/agent and beneficiary, and recognizes UESP’s obligation to keep account information secure and confidential.

Information UESP CollectsAs the administrator, UESP collects nonpublic personal information about the account owner/agent, successor account owner/agent, and beneficiary from the following sources:

• Account Agreements or other forms submitted to UESP• (if the account owner/agent enters information on an online

application or form, UESP may store the information even if the application or form is not completed or submitted)

• Transactions with UESP or other institutions, such as banks and credit unions, that affect account owners’ UESP accounts

• UESP’s website, uesp.org (UESP may collect information automatically from account owners, using cookies and similar text files to keep track of their preferences)

• Third parties designated to verify identity or prevent fraud• Third parties that the account owner authorizes to provide

information to UESP


58 July 14, 2017

• Third parties that the account owner designates to have access to his or her account(s)

Personal information collected from any source may include, among other things, the name, address, U.S. Social Security or Taxpayer Identification Number, date of birth, and information about accounts at other institutions of the account owner/agent, successor account owner/agent, and beneficiary.

How UESP Handles InformationUESP does not sell information about a current or former account owner/agent or beneficiary to third parties. UESP also does not disclose any nonpublic private information about a current or former account owner/agent or beneficiary to anyone, except with express permission, when needed to complete transactions, or as required by law. Here are the details:

• UESP restricts access to private personal information about an account owner/agent to individuals authorized to have access to such information, or to employees who need to know such information to provide account services to the account owner/agent.

• To complete certain transactions or account changes that the account owner/agent directs, it may be necessary to provide identifying information to companies, individuals, or groups that are not affiliated with UESP. For example, if an account owner/agent asks to transfer money from another financial institution to UESP, UESP may need to provide certain information about the account owner/agent to that financial institution to complete the transaction.

• In certain instances, UESP may contract with nonaffiliated companies to perform services for UESP. Where necessary, UESP will disclose information about the account owner/agent to these third parties. In all such cases, UESP provides the third party with only the information necessary to carry out its assigned responsibilities, and only for that purpose. UESP also requires these third parties to treat the account owner/agent’s private information with the same high degree of confidentiality that UESP does.

• Finally, UESP will release information if compelled by law to do so or in other legally limited circumstances (e.g., to prevent or report fraud or suspicious activity).

UESP maintains physical, electronic, and procedural safeguards that comply with federal regulations to guard nonpublic personal information.

How UESP Protects Privacy OnlineUESP’s web applications use secure forms of online communication, including data encryption, Secure Sockets Layer (SSL) protocol, usernames and passwords, and site-to-user authentication. These technologies provide a high level of security and privacy when the account owner/agent accesses account information or performs online transactions.When a person visits uesp.org, UESP collects certain technical and navigational information, such as computer browser type,

Internet protocol address, web pages visited, and average time spent on the website. This information may be used to alert the visitor to software compatibility issues or to resolve technical or service problems. It may also be analyzed to improve UESP’s web design and functionality and UESP’s ability to serve the account owner/agent and his or her accounts.Like most websites, UESP’s website uses cookies and similar data files—small text files stored on a computer by a browser. Cookies are used for many things, such as determining whether someone previously visited the website, or establishing how many new website visitors UESP receives each month. Information collected by cookies includes facts about the visitor’s computer settings and the use of his or her computer, but doesn’t include personal information, such as names and addresses. UESP will not share the information in these data files or give others access to it except to help UESP better serve the visitor.Most internet browsers accept cookies automatically. However, a visitor can change a browser’s settings to erase cookies or prevent their automatic acceptance. If the visitor chooses not to allow cookies, UESP cannot guarantee his or her experience with the website will have the same quality as if cookies were allowed. UESP uses Extended Validation Certificates. Certain browsers, including the latest versions of Chrome®, Firefox®, and Internet Explorer®, may highlight part of the address bar in green. The certificates help guard against phishing attacks by confirming the web page the user is visiting is part of the official UESP website. UESP passed an independent audit to obtain this certificate from a leading certificate authority company. Other browsers may recognize extended validation certificates in the future.

What the Account Owner/Agent Can DoAn account owner/agent should keep all account information confidential to safeguard his or her accounts. An account owner/agent should never give account information to third parties except through authorized interested party access or limited power of attorney authority granted by the account owner/agent for selected UESP account(s). UESP is not responsible for the consequences if the account owner/agent gives account information to third parties.Anyone who suspects unauthorized account activity should contact UESP or any other appropriate authorities immediately.

Privacy Policy ModificationsUESP reserves the right to modify this policy at any time.

ACCOUNT OWNER/AGENT OBLIGATIONS AND RESPONSIBILITIES For future reference, the account owner/agent should keep this Program Description, all Supplements to it, and a copy of the Account Agreement submitted to UESP (or confirmation if submitted online) to open an account. These documents provide important information about UESP, including information about



the investment risks associated with and the terms under which the account owner/agent agrees to open an account.The account owner/agent should read all quarterly account statements, newsletters, updated Program Descriptions, and Supplements received from UESP, as well as any other information UESP might provide throughout his or her ownership of a UESP account. The account owner/agent is also encouraged to visit uesp.org for information regarding the plan and for timely information regarding his or her UESP account.References made in the Program Description to documents or laws are merely summaries and thus are not definitive or complete. An account owner/agent with specific inquiries should refer to the documents or laws for complete information.

UESP is not authorized to provide legal, financial, or tax advice. Prospective and existing account owners/agents should consult a financial advisor for inquiries specific to their circumstances.For inquiries about UESP, including how to open an account, or to request an Account Agreement or other forms, visit UESP online at uesp.org or call UESP toll-free at 800.418.2551. Written requests may be sent to: UESP, PO Box 145100, Salt Lake City, UT 84114-5100.

60 July 14, 2017

To qualify for tax year 2017, account transactions must meet the following deadlines. All documents must be received by UESP in good order to be processed.Note: UESP does not guarantee that a transaction received on the last day UESP conducts business for that year will be completed on that day.

Online Process DeadlineMust be received by UESP before 11:59 p.m., Mountain Time

Manual Process Deadline1

Must be received by UESP before 5 p.m., Mountain Time

Contributions Sunday, December 31, 2017 Friday, December 29, 2017

New Accounts Sunday, December 31, 2017 Friday, December 29, 2017

Withdrawals Sunday, December 31, 2017 Friday, December 29, 2017

Investment Option Change Sunday, December 31, 2017 Friday, December 29, 2017

Incoming Rollovers (money received) N/A Friday, December 29, 2017

Transfers (between accounts with the same account owner) Sunday, December 31, 2017 Friday, December 29, 2017

Transfers (between accounts with different account owners) N/A Friday, December 29, 2017

Outgoing Rollovers N/A Friday, December 15, 2017

Note1 Paper forms and incoming faxes are considered manual submissions and must meet the deadlines for the manual process. A mailed contribution postmarked on or before

the December 29, 2017, deadline but received in 2018 will be recorded as a 2018 tax-year contribution.

2 0 1 7 Y E A R - E N D D E A D L I N E S


UESP forms listed below are available for download at uesp.org or by calling UESP toll-free at 800.418.2551. Some account functions may also be completed in Account Access at uesp.org, as indicated.

General Forms

Form Title FunctionMay Complete

Online

100 Individual Account Agreement Open a new individual UESP account

102 Institutional Account Agreement Open a new institutional UESP account

104 UGMA/UTMA Account Agreement Open a new UESP UGMA/UTMA account

110 Account Owner/Agent Signature Card Provide a signature for validating future UESP account transactions

115 Account Owner/Agent Signature Card with Signature Guarantee

Provide a signature guarantee for validating a UESP account owner/agent’s signature

200 One-Time or Recurring Electronic Contributions Authorization/Change

Set up or change one-time or recurring electronic contributions to a UESP account from a bank account

1

205 Payroll Contribution Set up or change payroll contributions to a UESP account 1

210 Incoming Direct Rollover: 529 Plan or Coverdell ESA

Roll over liquidated funds into a UESP account from another 529 plan or transfer funds from a Coverdell ESA

215 Liquidated Funds Transfer: 529 Plan, Coverdell ESA, or Savings Bonds

Transfer liquidated funds into a UESP account from another 529 plan, a Coverdell ESA, or a qualified U.S. Savings Bond

225 Wire Transfer Notification Authorize a wire transfer to a UESP account

300 Withdrawal Request Withdraw money from a UESP account 2

400 Internal Transfer Transfer funds between existing UESP accounts 3

405 Investment Option Change Change the investment option on a UESP account

500 Account Information Change Change the address(es) and/or telephone number(s) for a UESP account

505 Account Owner/Agent Change Change the account owner/agent listed on a UESP account

510 Beneficiary Change/Correction Change the beneficiary listed on a UESP account or correct the current beneficiary’s information

515 Primary/Secondary Successor Owner Designation, Change, or Removal

Establish, change, or remove the successor account owner(s) on a UESP account

Notes1 For individual and institutional accounts only2 For qualified withdrawals only3 For accounts with the same account owner

F O R M S

Forms

62 July 14, 2017

Scholarship Program Forms Scholarship program forms are only available by calling UESP toll-free at 800.418.2551.


Online

105 Master Account AgreementOpen a master account for purposes of funding a scholarship program operated by a qualifying governmental entity or tax-exempt 501(c)(3) organization

106 Scholarship Account AgreementOpen a new scholarship account owned by a qualifying institution for a specific beneficiary as part of a scholarship program

1

Note1 Before opening a scholarship account, an institution must first open at least one master account with UESP using a Master Account Agreement (form 105).

Limited Power of Attorney Forms


Online

700 Entity Limited Power of Attorney Registration Register an entity that may be granted limited power of attorney authority

710 Entity Limited Power of Attorney Authorization Grant an entity limited power of attorney authority for a UESP account(s)

720 Entity Limited Power of Attorney Revocation Revoke an entity’s limited power of attorney authority for a UESP account(s)

730 Entity Limited Power of Attorney Signature Card Provide signatures that will be used to validate account transactions

800 Individual Limited Power of Attorney Registration Register an individual who may be granted limited power of attorney authority

810 Individual Limited Power of Attorney Authorization Grant an individual limited power of attorney authority for a UESP account(s)

820 Individual Limited Power of Attorney Revocation Revoke an individual’s limited power of attorney authority for a UESP account(s)


Age Requirements

Account Owner/Agent An account owner/agent must be at least age 18 and have a valid U.S. Social Security or Taxpayer Identification Number.

Beneficiary A beneficiary may be any age and must have a valid U.S. Social Security or Taxpayer Identification Number.

Utah State Income Tax Credit/Deduction

Contributions to an account by a Utah taxpayer account owner are only eligible for a Utah state income tax credit or deduction if the account is established and the beneficiary is designated before age 19.

Dollar Amounts

Maximum Aggregate Account Balances

UESP will accept contributions for a beneficiary until all UESP account balances for that beneficiary reach $430,000.

Minimum Contributions No minimum contribution is required.

Minimum Balances No minimum balance is required.


Utah taxpayers may not claim a Utah state income tax credit or deduction for contributions made to any other state’s 529 plan.Utah IndividualsFor the 2017 tax year, Utah taxpayers filing an individual tax return can claim a 5 percent Utah state income tax credit per qualified beneficiary for contributions up to $1,920. Utah taxpayers who are married and filing a joint tax return can claim a 5 percent Utah state income tax credit per qualified beneficiary for contributions up to $3,840.Utah TrustsFor the 2017 tax year, Utah-based trusts can claim a 5 percent Utah state income tax credit for contributions up to $1,920 per qualified beneficiary. Utah-based grantor trusts whose grantor filing status is married and filing jointly can claim a 5 percent Utah state income tax credit for contributions up to $3,840 per qualified beneficiary.Utah CorporationsFor the 2017 tax year, Utah-based corporations can claim a Utah state income tax deduction for contributions up to $1,920 per qualified beneficiary.

Maximum Gift Without Incurring Federal Gift Tax

A person can contribute $14,000 ($28,000 if filing jointly) each year for the benefit of one beneficiary without incurring gift tax liability, or up to $70,000 ($140,000 if filing jointly) in one year if a five-year election is made.

Federal Deposit Insurance Corporation (FDIC) Insurance

FDIC insurance, up to applicable FDIC limits, is provided for the FDIC-insured accounts held in trust by UESP at Sallie Mae Bank and U.S. Bank (the “Banks”). Contributions to and earnings on the FDIC-insured accounts for each UESP account owner are apportioned between the Banks according to the following percentages: Sallie Mae Bank (90 percent) and U.S. Bank (10 percent). Money in the FDIC-insured accounts is insured by the FDIC on a pass-through basis to each account owner up to the maximum amount set by federal law, which is $250,000 at each Bank. The amount of FDIC insurance provided to an account owner at each Bank is based on the total of (1) the proportional value of an account owner’s investment in the FDIC-insured accounts at each Bank, plus (2) the value of the account owner’s other personal bank accounts (if any) held at each Bank, as determined by the Banks and by FDIC regulations.

S U M M A R Y O F R U L E S

Summary of ruleS

64 July 14, 2017

Movement of Funds

Contributions Anyone can contribute to an account regardless of who owns the account. However, (1) only the account owner/agent can control how money is invested and used, and (2) only a Utah taxpayer account owner can claim applicable Utah state income tax benefits related to the account, regardless of who contributed to it.

Withdrawals An account owner/agent may request a withdrawal of funds from his or her account any time. Withdrawals may only be sent to the account owner/agent, the beneficiary, an eligible educational institution, or another 529 plan.

Rollovers Funds may be rolled over to another 529 plan once every 12 months for the same beneficiary.

Investment Option Changes The investment option on an existing account may be changed twice per calendar year for each beneficiary or any time in connection with an allowable transfer to a new beneficiary.

Transfers and Partial Transfers

Some or all of the funds in an account may be transferred from one beneficiary to another without tax penalty as long as the new beneficiary is a member of the family of the previous beneficiary.

Year-End Deadlines


For contributions to count toward the Utah state income tax credit or deduction, contributions to Utah taxpayers’ accounts must be received online before 11:59 p.m. MT, Sunday, December 31, 2017, or received in the UESP office before 5 p.m. MT, Friday, December 29, 2017.

index


529 Planabout, 1

abandoned account, 12account

abandoned account, (See abandoned account)account value, i, 1, 54dividend/interest earnings, 33inactive account, 12, 56individual, (See individual accounts)institutional, (See institutional accounts)maximum aggregate account balance, 14, 63online Account Access, 5, 13opening, iv, 3–5scholarship, (See scholarship programs)statement, 27, 56types, 3, 6–10UGMA/UTMA, (See UGMA/UTMA accounts)

account owner/agent, iv, 4, 6–9changing, 6, 7, 9death of, 6individual accounts, 3, 6institutional accounts, 3, 7naming, 4successor, iii, 4, 6, 7, 8, 9UGMA/UTMA accounts, 3, 8

address change, 11, 13age-based, (See investment options)agent, (See account owner/agent)American Opportunity Tax Credit, 50beneficiary, ii, iv, 4, 7, 8, 9, 63

changing, 10choosing, 4individual account, 7institutional account, 8UGMA/UTMA account, 9

circumstances exempt from tax penalties, 10–11, 25–26contact information

UESP, 5, front cover, back coverupdating, 11, 13

contributions, v, 4–5, 11, 14–18cancel, 16change, 16gift tax exclusion, 49–50, 63initial, 4maximum aggregate account balance, 14methods, 11, 15–17

check, 16Gift Program, (See Gift Program)incoming rollover, (See rollovers)one-time electronic, 15online, 15online bill pay, 17payroll, 16

recurring electronic, 16special occasion, 17transfers, 17, (See transfers)Utah state individual income tax refund, 17, 53wire transfer, 16

no minimum, v, 4, 14, 63nonaccount owner, 14restrictions, 14returned, 15, 46tax benefits for, (See tax benefits)

costs, (See fees)Coverdell Education Savings Account (ESA), 21

transfer of, 21custodian, (See UGMA/UTMA accounts)customized, (See investment options)deadlines, vi, 17, 26, 60, 64Dimensional

about, 34funds, 32–34, 36–37, 44, 45risks, 39–42

disabilitycircumstances exempt from tax recapture, 10, 25–26, 52

dividends, 33earnings, (See dividends)eligible educational institutions, ii, 25ESA, (See Coverdell Education Savings Account)estate tax, (See gift tax exclusion)expense ratios, (See fees)expenses, (See fees)FDIC

FDIC-insured accounts, ii, iv, vi, 2, 34, 42, 46, 63FDIC-Insured investment option, iv, 29, 42insurance, i, vi, 2, 29, 54, 63

feesAdministrative Asset Fee, v, 45, 46, 47associated with each investment option, v, 45, 47, 48customized investment option fee, 47expedited delivery, 46Operating Expense Ratios of underlying funds, 45, 46returned contribution, 46UESP Asset-Based fee structure, 45–48usage and purpose of, 46wire transfer, 46

financial aid, 55forms

IRS Form 1099-Q, 20, 24, 25, 50list of UESP forms, 61–62Utah State Tax Form TC-675H, 10, 21, 52

funds, (See underlying investments)Gift Program, 4, 11, 13, 15, 17

I N D E X

index

66 July 14, 2017

gift tax exclusion, vi, 49individual accounts, iv, 3, 6–7

account owner, 6beneficiary, 7successor, 6

institutional accounts, iv, 3, 7–8account owner/agent, 7beneficiary, 8required documentation, 7–8successor, 8

interest, (See dividends)internal transfers, (See transfers)investment options, v, 4, 11, 27–44

age-based, ii, v, 27, 28, 29, 30, 32, 41, 43, 47, 48Age-Based Aggressive Domestic, 11, 28, 32, 41, 43, 47, 48Age-Based Aggressive Global, 11, 28, 32, 41, 43, 47, 48Age-Based Conservative, 11, 29, 32, 41, 43, 47, 48Age-Based Moderate, 11, 29, 32, 41, 43, 47, 48

approximate cost of a $10,000 investment in, 48asset allocation, 32changing, 31customized, ii, v, 11, 27, 28, 30, 31, 32, 41, 44, 45, 47, 48

Customized Age-Based, 30, 31, 32, 41, 43, 44, 47, 48Customized Static, 30, 31, 32, 41, 43, 44, 47, 48

fees associated with, 45–48, (See also fees)list of, 11Market value of, 27ownership of units within, iii, 1, 27performance of, 43, 44rebalance, iii, 27, 28, 29, 30risks associated with selecting, 38–42static, iii, v, 11, 29, 32, 41, 44, 47, 48

20% Equity/80% Fixed Income, 11, 29, 32, 41, 44, 47, 4870% Equity/30% Fixed Income, 11, 29, 32, 41, 44, 47, 48Equity—10% International, 11, 29, 32, 41, 44, 47, 48Equity—30% International, 11, 29, 32, 41, 44, 47, 48Equity—100% Domestic, 11, 29, 32, 41, 44, 47, 48FDIC-Insured, 11, 29, 32, 41, 44, 47, 48Fixed Income, 11, 29, 32, 41, 44, 47, 48Public Treasurers’ Investment Fund, 11, 29, 32–34, 41, 44, 47, 48

underlying investments in, 33–37, 44, 47, 48IRS Form 1099-Q, (See forms)Key Terms, ii–iiiLifetime Learning Tax Credits, 50limited power of attorney, iii, 13, 62member of the beneficiary’s family, iii, 10online

Account Access, 5, 13Operating Expense Ratios, (See fees)payroll contributions, (See contributions)power of attorney, (See limited power of attorney)privacy policy, vi, 57–58Public Treasurers’ Investment Fund, 29

about, iii, 29, 32–34, 38–39, 41, 42, 44fees, 45–48underlying investments in, (See underlying investments)

qualified higher education expenses, iii, v, 25quarterly account statements, 27, 56risks

associated with each investment option, 38–42associated with each underlying investment, 38–42FDIC insurance, i, ii, vi, 2, 38–42, 54federal financial aid, 55of investing in UESP, i, vi, 1, 28, 54performance, 54

rollovers, iii, v, 19–20incoming, 19

tax considerations, 19outgoing, 19

tax considerations, 20Sallie Mae Bank, i, ii, vi, 1, 2, 27, 29, 33, 34, 54, 63scholarship

circumstances exempt from tax penalties, 10–11, 25, 49circumstances exempt from tax recapture, 52–53

scholarship programs, 9–10, 62schools, (See eligible educational institutions)shared access, interested parties, 13Signature Card, 3, 5, 56, 61signature guarantee, 19–20, 22–23static, (See investment options)successor account owner, (See account owner/agent)

primary, 6–7secondary, 6–7

tax benefitsfor corporations, i, vi, 52, 63for individuals, i, vi, 49, 51, 63for nonresident & part-year Utah residents, 52for trusts, vi, 52, 63of 529 plans, 1recapture of, v, 10, 12, 19–21, 52–53Utah State income tax credit/deduction, i, vi, 1, 7–9, 51–53

tax considerationsconsequences, 49–53federal income tax, vi, 49–50gift tax exclusion, (See gift tax exclusion)rollovers, (See rollovers)Utah state, vi, 1, 51–53, 63

tax penalty, 9, 10–11, 21, 25, 51, 52transactions

cancelling, 12timing of, 12

transfersCoverdell Education Savings Account (ESA), v, 5, 21from another savings vehicle, 21internal, v, 20transfers (to, from), iii, v, 5, 17, 20, 21, 26, 52, 60, 61, 64U.S. Savings Bond, (See U.S. Savings Bond)

UGMA/UTMA accounts, iii, iv, 3–5, 8–9account owner/agent, 8beneficiary, ii, iii, 9custodian, ii, 8, 9electronic contribution, 4, 5, 11, 17

index


successor, 9tax considerations, 9transfer of, 21withdrawals, 23

underlying investments (underlying funds), iii, 1, 2, 29–44allocations in investment options, 32daily pricing, 33, 34Dimensional funds, (See Dimensional)dividends/interest earnings of, (See dividends)FDIC-insured accounts, 34investment risks associated with, 38–42operating expense ratios, 45, 46performance of, 43, 44pooling of, 27Public Treasurers’ Investment Fund, (See Public Treasurers’ Investment Fund)risks associated with, (See risks)understanding investments, 54Vanguard funds, (See Vanguard)

unit, i, iii, 1, 2, 27, 33, 34, 45unit price, iii, 12, 14, 22, 24, 27, 34U.S. Bank, i, ii, vi, 1, 2, 29, 34, 54, 63U.S. Savings Bond

transfer of, iii, v, 5, 17, 21U.S. service academy

circumstances exempt from tax penalties, 10, 25, 49circumstances exempt from tax recapture, 52–53Circumstances exempt from tax recapture, 25

Utah state income tax refundcontribution of, v, 11, 17, 52, 53

Utah State Tax Form TC-675H, (See forms)Vanguard

about, 33, 34funds, 32, 33, 35, 36, 44, 45risks, 38, 39, 42

wire transfer, (See contributions)withdrawal

cancelling, 24custom, 23eligible educational institutions, 25eligible payees, 23exempt from penalties, 25expedited, 45, 46full-balance, 24multiple accounts, 23

different account types, 23, 24same account types, 23, 24

nonqualified, 25proportional, 23qualified, 24Qualified Higher Education Expenses, 25recontribution, 24rollovers, (See rollovers)signature guarantee, (See signature guarantee)tax penalties, 25, 49, 52transfers, (See transfers)

Year-End Deadlines, vi, 17, 26, 60, 64

July 14, 2017

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SAVE FOR COLLEGE. INSPIRE THEIR FUTURE.®

Utah’s official nonprofit 529 college savings program

Administered and managed by the Utah State Board of Regents and the Utah Higher Education Assistance Authority

© 2017 Utah Educational Savings PlanJuly 14, 2017 The terms Utah Educational Savings Plan and UESP are registered service marks.

UESP Contact InformationMailing address UESP, PO Box 145100, Salt Lake City, UT 84114-5100Physical address UESP, State Board of Regents Building, Gateway 2, 60 South 400 West, Salt Lake City, UT 84101-1284Toll-free telephone 800.418.2551Local telephone 801.321.7188Toll-free fax 800.214.2956Email [email protected] uesp.orgHours of operation 8:00 a.m.–5:00 p.m., Mountain TimeDays of operation Monday–Friday (closed federal, State of Utah, and Utah State Board of Regents holidays)

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