TITLE 23: EDUCATION AND CULTURAL RESOURCES
CHAPTER XVI: TREASURER
PART 2500
COLLEGE SAVINGS POOL
SECTION 2500.10 PURPOSE
Section 2500.10 Purpose
The Treasurer may establish and
administer the Pool as a qualified State tuition program under section 529 of
the Code. The Pool shall be structured to enable account owners to own an
interest in a pool of assets, which may include, but need not be limited to,
equities, bonds, money market instruments, financial institution deposits, or
investment funds consisting primarily of those assets. The Treasurer, in a
manner that is in compliance with federal and State securities laws, may issue
interests in the Pool. The Treasurer may receive, hold, and invest moneys paid
into the Pool in trust for the benefit of the account owners and designated
beneficiaries and perform any other action the Treasurer deems
necessary to administer the Pool. In order to qualify the Pool as a
qualified state tuition program under section 529 of the Code and to so hold the
assets of the Pool in trust, the Treasurer may create a trust by declaration of
trust. The trust shall be an instrumentality of the State of Illinois. [15
ILCS 505/16.5(b)]
(Source:
Amended at 46 Ill. Reg. 3183, effective February 8, 2022)
 | TITLE 23: EDUCATION AND CULTURAL RESOURCES
CHAPTER XVI: TREASURER
PART 2500
COLLEGE SAVINGS POOL
SECTION 2500.20 DEFINITION OF TERMS
Section 2500.20 Definition
of Terms
The following definitions shall
apply to this Part:
"Act":
Section 16.5 of the State Treasurer Act [15 ILCS 505] that establishes the
College Savings Pool.
"Account":
An individual investment account established and maintained in the College
Savings Pool.
"Account Owner": Any
person or entity who has opened an account or to whom ownership of an account
has been transferred, as allowed by the Code, and who has authority to withdraw
funds, direct withdrawal of funds, change the designated beneficiary, or
otherwise exercise control over an account in the College Savings Pool.
"Administrative
Fees, Costs, and Expenses": Any fees, costs, and expenses, including
investment fees and expenses, to cover the costs of administration,
recordkeeping, and investment management, and payments to third parties,
related to the Pool.
"Applicant":
Any person who has applied or who is in the process of applying to open an
account in the Pool.
"Code":
The Internal Revenue Code of 1986, as amended (26 USC 1 et seq.).
"College Savings Pool"
or "Pool": The College Savings Pool authorized to be established by
the Treasurer under the Act and operated in accordance with section 529 of the
Code, which may consist of one or more programs.
"College
Savings Program" or "Program": An Illinois qualified tuition
program established under the Pool and operated in accordance with section 529
of the Code.
"Contributions":
Contributions made to an account by a donor.
"Designated
Beneficiary": Any individual designated as the beneficiary of an account
in the Pool by an account owner. A designated beneficiary must have a valid
social security number or taxpayer identification number. In the case of an
account established as part of a scholarship program permitted under section
529 of the Code, the designated beneficiary is any individual receiving
benefits accumulated in the account as a scholarship.
"Donor": Any person
or entity who makes a contribution to an account in the Pool.
"Earnings": The
aggregate total of all dividends and interest income received by the Pool. The
aggregate total of dividends and interest income shall be reduced by the
aggregate total of administrative fees, costs, and expenses paid out of the
Pool prior to calculating earnings. Earnings shall be determined without regard
to realized or unrealized capital gains and losses incurred by the Pool.
"Eligible Educational
Institutions": Public and private colleges, junior colleges, graduate
schools, and certain vocational institutions that are described in section 1001
of the Higher Education Resource and Student Assistance Chapter of Title 20 of
the United States Code (20 U.S.C. 1001) and that are eligible to participate in
Department of Education student aid programs.
"Investment
Options": The underlying funds and investment portfolios available to account
owners within a program.
"Investment
Policy ": The Investment Policy Statement adopted by the Treasurer
pursuant to the Act, which sets forth the policies, objectives, and guidelines
that govern the investment of moneys in the programs.
"Investment
Selection": Refers to the process of choosing the underlying investment
funds, as well as the investment portfolios, by participants.
"Participating Financial
Institution": Any financial institution lawfully doing business in the
State of Illinois that has executed a participation agreement with the
Treasurer or their agent, for the purposes of promoting a college savings
program in the Pool.
"Program
Disclosure Statement": The document distributed to applicants and account
owners describing the program. The Program Disclosure Statement shall include,
without limitation and unless contained in the application for enrollment, the
information required by the Act and otherwise required under applicable federal
and Illinois laws.
"Program Manager": Any
financial institution or entity lawfully doing business in the State of
Illinois selected by the Treasurer to oversee the recordkeeping, custody,
customer service, investment management, and marketing for one or more of the
programs in the College Savings Pool.
"Qualified
Expenses":
Tuition, fees, and the costs of
books, supplies, and equipment required for enrollment or attendance at an
eligible educational institution;
Expenses for special needs
services, in the case of a special needs beneficiary, which are incurred in
connection with such enrollment or attendance;
Certain expenses, to the extent
they qualify as qualified higher education expenses under Section 529 of the
Code, for the purchase of computer or peripheral equipment or Internet access
and related services, if that equipment, software, or services are to be
used primarily by the beneficiary during any of the years the beneficiary is
enrolled at an eligible educational institution, except that, these
expenses shall not include expenses for computer software designed for sports,
games, or hobbies, unless the software is predominantly educational in nature;
Room and board expenses
incurred while attending an eligible educational institution at least
half-time. A student shall be considered to be enrolled at least half-time if
the student is enrolled for at least half the full-time academic workload for
the course of study the student is pursuing, as determined under the standards
of the institution at which the student is enrolled;
Expenses for fees, books,
supplies, and equipment required for the participation of a designated
beneficiary in an apprenticeship program registered and certified with the
Secretary of Labor under the National Apprenticeship Act (29 U.S.C. 50); and
Amounts paid as principal or
interest on any qualified education loan of the designated beneficiary or a
sibling of the designated beneficiary, as allowed under section 529 of the
Code. [15 ILCS 505/16.5(a)]
"Third-party Service
Provider" means a subcontractor of the Program Manager for the exclusive
purpose of distributing the Bright Directions advisor-sold plan.
"Treasurer":
The duly elected Treasurer of the State of Illinois or their designee or
designees.
(Source: Amended at 46 Ill. Reg. 3183, effective February 8, 2022)
| TITLE 23: EDUCATION AND CULTURAL RESOURCES
CHAPTER XVI: TREASURER
PART 2500
COLLEGE SAVINGS POOL
SECTION 2500.30 APPLICATION PROCESS
Section 2500.30 Application Process
a) The
Treasurer may permit persons, including trustees of trusts and custodians under
a Uniform Transfers to Minors Act or Uniform Gifts to Minors Act account, and
certain legal entities to be account owners, including as part of a scholarship
program, provided that:
1) An
individual, trustee or custodian must have a valid social security number or
taxpayer identification number, be at least 18 years of age, and have a valid
United States street address; and
2) A
legal entity must have a valid taxpayer identification number and a valid
United States street address. [15 ILCS 505/16.5(d)]
b) Applications
may be processed through a program manager. Completed applications must be
submitted as specified in the application form and the program disclosure statement.
c) The Treasurer shall create applications for participation in
the Pool to be completed by the applicant. The applicant shall be responsible
for providing all of the information requested by the Treasurer. The
application shall include, but is not limited to, the following information:
1) The
applicant's name, physical address, date of birth, Social Security number or Taxpayer
Identification Number, and signature;
2) The
designated beneficiary's name, physical address, date of birth, and Social
Security number or Individual Taxpayer Identification Number;
3) Investment
selection;
4) Funding
method; and
5) Additional
information that may be beneficial to the administration of the program, or
that is required by federal regulations and/or guidance.
d) The Treasurer shall keep all information received from
applicants and account owners confidential and may only share the information as
required by law or as necessary to operate the College Savings Pool.
e) When an application is submitted through a financial advisor,
the financial advisor shall provide information regarding the financial advisor
on the application to enable the Treasurer to open an account for the
applicant.
f) Applications may include an initial contribution to the Pool
in a manner set forth in Section 2500.60. No minimum contribution shall be
required to open an account. Applications that are incomplete and applications
that fail to meet the guidelines established by the Treasurer or set by the
Code may be rejected.
(Source: Amended at 45 Ill. Reg. 2052, effective January 29, 2021)
| TITLE 23: EDUCATION AND CULTURAL RESOURCES
CHAPTER XVI: TREASURER
PART 2500
COLLEGE SAVINGS POOL
SECTION 2500.40 PROGRAM ADMINISTRATION
Section 2500.40 Program
Administration
a) The Treasurer is the trustee and administrator of the College
Savings Pool. The Treasurer's duties include, but are not limited to:
1) Providing administrative support to the Pool;
2) Developing and implementing investment policies for the Pool;
and
3) Appointing program managers and vendors to provide management,
oversight and other tasks necessary to administer the Pool.
b) Accounts in the Pool may be processed through a program
manager or its approved designees. The program manager is responsible for the
day-to-day oversight and management of the programs in the Pool. The program
manager's duties include, but are not limited to, oversight of the
recordkeeping, custody, customer service, investment management, and marketing
for one or more of the programs in the Pool.
c) The program manager shall maintain records as required by law
and in accordance with the Treasurer's records retention policies. The records
maintained by the program manager shall include records that enable the
production of a report for each account in the Pool. A separate accounting
shall be provided to the account owner, and, if applicable, to the financial
advisor, at least annually and shall show the account balance, the
investment in the account, the investment earnings, and the distributions from
the account.
(Source: Amended at 45 Ill. Reg. 2052, effective January 29, 2021)
| TITLE 23: EDUCATION AND CULTURAL RESOURCES
CHAPTER XVI: TREASURER
PART 2500
COLLEGE SAVINGS POOL
SECTION 2500.50 INVESTMENT POLICY
Section 2500.50 Investment
Policy
a) The
Treasurer will select the investment options to be offered by the Pool to the account
owners. The Treasurer shall develop, publish, and implement an investment
policy covering the investment of the moneys in each of the programs in the
Pool. The policy shall be published each year as part of the audit of the Pool
by the Auditor General. The policy shall be distributed to all account owners
in each program. The Treasurer shall notify all account owners in the program
in writing, and the Treasurer shall publish, in a newspaper of general
circulation in both Chicago and Springfield, any changes to the previously
published investment policy at least 30 calendar days before implementing the
policy. [15 ILCS 505/16.5(g)]
b) The
investment policy is a written statement describing the risk management and
oversight program and should be designed to:
1) ensure
that an effective risk management process is in place to monitor the risk
levels of the Pool;
2) ensure
that risks taken are prudent, properly managed, and adequately compensated
compared to applicable performance benchmarks and standards;
3) describe the Treasurer's
investment objectives; and
4) describe
the process of evaluating performance of employees and contractors that provide
investment management services to the Pool.
c) The
Treasurer will utilize the following investment principles when constructing,
evaluating, and selecting the investment framework, investment options, and
investment funds for the Pool:
1) Low
Cost – The Treasurer must use his or her best efforts to keep fees as low as
possible and consistent with the administration of high quality competitive
college savings programs. [15 ILCS 505/16.5(e)]
2) Open
Architecture – The Pool's investment framework shall utilize an open
architecture plan design, meaning it shall not be required to select
proprietary investment funds or investment options. The open architecture
design shall allow the Treasurer to select the underlying investment options
and investment funds. The open architecture design is intended to provide the Treasurer
with:
A) Access
to best in class portfolio managers;
B) The
ability to use nonproprietary products;
C) Increased
flexibility when choosing underlying investment strategies; and
D) The
ability to minimize account owner fees on underlying investment funds and
accounts.
3) Various
Investment Options – The Pool's investment options may include, but are not
limited to:
A) Dynamic
age-based portfolio;
B) Static
portfolios with varying target allocations (i.e., aggressive, moderate or
conservative risk profiles); and
C) Individual
fund portfolios.
4) The
portfolios listed in subsection (c)(3) may include some or all of the following
asset categories:
A) Deposits
with financial institutions (e.g., FDIC-insured savings accounts);
B) Short-term
investments (e.g., money market funds);
C) Fixed
income investments;
D) Real
estate investments;
E) Domestic
equity investments; and
F) International
equity investments.
(Source: Amended at 46 Ill. Reg. 3183, effective February 8, 2022)
| TITLE 23: EDUCATION AND CULTURAL RESOURCES
CHAPTER XVI: TREASURER
PART 2500
COLLEGE SAVINGS POOL
SECTION 2500.60 CONTRIBUTIONS
Section 2500.60 Contributions
a) Contributions
may be made only in cash. Cash contributions may be made by check, money
order, electronic transfer, payroll contribution, wire transfer, or similar
methods allowed by the Code.
b) The Pool
shall have no requirement on minimum contributions, and donors may make
contributions at any time. The Pool shall not permit any additional
contributions to an account as soon as the sum of:
1) the
aggregate balance in all accounts in the Pool for the designated beneficiary;
and
2) the
aggregate contributions in the Illinois Prepaid Tuition Program for the designated
beneficiary reaches the specified balance limit established from time to time
by the Treasurer in accordance with Section 2500.90.
c) Contributions
may be made by the account owner or any other person. No person other than the
account owner may direct the investment and distribution of contributions to an
account (or earnings thereon).
d) An account owner may, directly or indirectly, direct the
investment of their account only as provided in section 529(b)(4) of the
Code. Donors and designated beneficiaries, in those capacities, may not,
directly or indirectly, direct the investment of an account.
(Source:
Amended at 46 Ill. Reg. 3183, effective February 8, 2022)
| TITLE 23: EDUCATION AND CULTURAL RESOURCES
CHAPTER XVI: TREASURER
PART 2500
COLLEGE SAVINGS POOL
SECTION 2500.70 DISTRIBUTIONS
Section 2500.70 Distributions
a) Distributions
made from an account in the Pool may be made directly to the eligible
educational institution, directly to a vendor, in the form of a check payable
to both the designated beneficiary and the institution or vendor, directly to
the designated beneficiary or account owner, or in any other manner that is
permissible under section 529 of the Code. [15 ILCS 505/16.5(i)]
b) Funds
contained in an account may be rolled over into other eligible Illinois
programs, including an eligible ABLE account (see 15 ILCS 505/16.6) or
another qualified tuition program, to the extent permitted by section
529 of the Code.
c) The
Treasurer will comply with all reporting requirements regarding distributions
under section 529 of the Code.
(Source: Amended at 46 Ill. Reg. 3183, effective February 8, 2022)
| TITLE 23: EDUCATION AND CULTURAL RESOURCES
CHAPTER XVI: TREASURER
PART 2500
COLLEGE SAVINGS POOL
SECTION 2500.80 ADMINISTRATIVE FEES, COSTS, AND EXPENSES
Section 2500.80
Administrative Fees, Costs, and Expenses
a) Any
fees, costs, and expenses, including investment fees and expenses and
payments to third parties, related to the Pool, shall be paid from the assets
of the Pool. [15 ILCS 505/16.5(e)]
b) The
Treasurer must use their best efforts to keep these fees as low as
possible and consistent with administration of high quality competitive college
savings programs. [15 ILCS 505/16.5(e)]
c) Fees,
costs, and expenses shall include sufficient reserve funds in line with
industry standards for government operated funds.
d) The
Treasurer may permit a third-party service provider to provide compensation to
participating financial institutions or other financial services providers that
promote the Pool to their customers, provided that the cost of the compensation
is not passed on to account owners without their consent.
(Source: Amended at 46 Ill. Reg. 3183, effective February 8, 2022)
| TITLE 23: EDUCATION AND CULTURAL RESOURCES
CHAPTER XVI: TREASURER
PART 2500
COLLEGE SAVINGS POOL
SECTION 2500.90 ACCOUNT LIMITS
Section 2500.90 Account Limits
a) The
Treasurer shall limit the contributions that may be made to the Pool on behalf
of a designated beneficiary to prevent contributions in excess of those
necessary to provide for the qualified expenses of the designated beneficiary. The
account balance limit will be reflected on the Treasurer's website or in
another form that provides adequate notice to account owners. No donor may
make a contribution to an account for a designated beneficiary if that contribution
would cause the aggregate balance of all accounts for the designated beneficiary
in State of Illinois section 529 programs to exceed the account balance limit
established by the Treasurer. For purposes of the account balance limit, the
aggregate balance shall be comprised of all accounts under all section 529 qualified
tuition programs in the State of Illinois for a particular designated
beneficiary. An account may only exceed the account balance limit in the event
that investment earnings accrue after the last permitted contribution. The
Treasurer may, from time to time, adjust the account balance limit.
b) Account
Balance Limit Calculation
When adjusting the account balance
limit, the Treasurer will consider the following:
1) Estimates
of tuition, fees, books, supplies, equipment, and room and board as set forth
in the cost of attendance for an undergraduate, graduate and professional
degree from at least 12 eligible educational institutions, including at least two
public and two private eligible educational institutions reasonably believed to
have the highest cost qualified expenses in:
A) Illinois;
B) the
Midwest; and
C) nationally.
2) The
guidance available from the United States Treasury and the Internal Revenue
Service on how an account balance limit may be determined to provide adequate
safeguards to prevent contributions on behalf of a designated beneficiary in
excess of those necessary to provide for the qualified expenses of the
designated beneficiary.
(Source: Amended at 45 Ill. Reg. 2052,
effective January 29, 2021)
| TITLE 23: EDUCATION AND CULTURAL RESOURCES
CHAPTER XVI: TREASURER
PART 2500
COLLEGE SAVINGS POOL
SECTION 2500.100 DEBT
Section 2500.100 Debt
a) The Pool may not incur any indebtedness. The interests of the
account owners and the designated beneficiaries shall not be treated as
indebtedness under this Section.
b) No interest in the Pool, or any portion of the Pool, may be
used as security for a loan.
(Source: Amended at 45 Ill. Reg. 2052, effective January 29, 2021)
| TITLE 23: EDUCATION AND CULTURAL RESOURCES
CHAPTER XVI: TREASURER
PART 2500
COLLEGE SAVINGS POOL
SECTION 2500.110 PROGRAM DOCUMENTS
Section 2500.110 Program
Documents
In order to establish and
administer the Pool, the Treasurer may enter into all necessary agreements, documents
and instruments with terms and provisions that shall not be inconsistent with
the Act, section 529 of the Code and any regulations promulgated under the
Code, or this Part.
(Source:
Amended at 45 Ill. Reg. 2052, effective January 29, 2021)
| TITLE 23: EDUCATION AND CULTURAL RESOURCES
CHAPTER XVI: TREASURER
PART 2500
COLLEGE SAVINGS POOL
SECTION 2500.120 PRIVATE CONTRACTORS (REPEALED)
Section 2500.120 Private
Contractors (Repealed)
(Source:
Repealed at 45 Ill. Reg. 2052, effective January 29, 2021)
| TITLE 23: EDUCATION AND CULTURAL RESOURCES
CHAPTER XVI: TREASURER
PART 2500
COLLEGE SAVINGS POOL
SECTION 2500.130 AMENDMENT OF RULES (REPEALED)
Section 2500.130 Amendment
of Rules (Repealed)
(Source:
Repealed at 45 Ill. Reg. 2052, effective January 29, 2021)
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