How to Make an Investment Option Change
UESP’s recent glide path changes in its age-based investment options provided smoother equity step-downs between age brackets and further diversified fixed income holdings.
The changes also present an opportunity for you to evaluate your client’s investment option and possibly consider a different approach.
The IRS allows two investment option changes per calendar year for the same beneficiary. Because the glide-path modifications were initiated by UESP, they did not count as one of the two allotted option changes.
An investment option change can be made at advisor.my529.org or by submitting an Investment Option Change form (form 405), which can be downloaded online. If your client is enrolled in a customized investment option, changing the allocation of the underlying funds is considered an investment option change.
When advisors create a customized allocation, they can save a template of the new allocation for other clients who may be interested in that same set of underlying funds.
View the latest investment option performance data on advisor.my529.org and discuss with your client whether an option change is right for him or her.
Remember, the 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.
If your client 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, he or she will need to open another UESP account for the future contributions. Keep in mind that the same account owner/beneficiary combo cannot have more than one account in either a customized static or customized age-based option.