SUPPLEMENT. Program Description. February 5, 2018, Supplement to the July 14, 2017, Program Description UESP NAME CHANGE

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1 Program Description SUPPLEMENT Utah s Official Nonprofit 529 College Savings Program February 5, 2018, Supplement to the July 14, 2017, Program Description 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... 1 my529 Hours of Operation Have Been Extended Two Hours... 1 Increase in Federal Gift Tax Exclusion for 529 Plan... 2 Change in Maximum Aggregate Account Balance Contribution Amounts Eligible for Utah Tax Benefits Change in Year-End Tax Deadlines Annual Withdrawal Limits for K-12 Tuition Expenses Operating Expense Ratios Lowered, Prospectus Dates Changed for Two Underlying Investments... 7 Rollovers of Funds from a my529 Account to an Able Account UESP (my529) Contact Information Mailing address PO Box , Salt Lake City, UT Toll-free telephone Website uesp.org (my529.org) Hours of operation 7 a.m. 6 p.m. MT Days of operation Hand-delivered forms and contributions must be received at my529 offices by 5 p.m. MT Monday Friday (closed federal, State of Utah, and Utah State Board of Regents holidays) UESP NAME CHANGE Description The 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 info@uesp.org. my529 my529.org info@my529.org MY529 HOURS OF OPERATION HAVE BEEN EXTENDED TWO HOURS Description my529 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 1

2 INCREASE IN FEDERAL GIFT TAX EXCLUSION FOR 529 PLANS February 5, 2018, Supplement to the July 14, 2017, Program Description Description Effective 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 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 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 $70,000 Contribution Averaged Gift $14,000 $14,000 $14,000 $14,000 $14,000 Additional $1,000 $1,000 $1,000 $1,000 Contributions 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 $28,000 Additional 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. PO Box , Salt Lake City, Utah my529.org

3 February 5, 2018, Supplement to the July 14, 2017, Program Description CHANGE IN MAXIMUM AGGREGATE ACCOUNT BALANCE Description On 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, CONTRIBUTION AMOUNTS ELIGIBLE FOR UTAH TAX BENEFITS Description The maximum contribution to a my529 account that qualifies for a Utah state income tax credit or deduction was raised, effective January 1, 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 Return For 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. PO Box , Salt Lake City, Utah my529.org

4 February 5, 2018, Supplement to the July 14, 2017, Program Description 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 Return For 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: 2018 Maximum Allowable Contribution for a Utah State Income Tax Credit 2018 Maximum Utah State Income Tax Credit per Beneficiary (5%) my529 Tax Filer Account Type Single Individual $1,960 $98 Joint 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 Contributions Tax Credit Percentage $0-$3, x 5% = 2018 Utah State Income Tax Credit Product of contribution multiplied by 5% $3, x 5% = $196 $3, x 5% = $196 + amounts over x 0% = $0 $3, $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 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 Maximum Allowable Contribution for a Utah State Income Tax Credit 2018 Maximum Utah State Income Tax Credit per Beneficiary (5%) my529 Tax Filer Account Type Trusts Institutional $1,960 $98 Grantor Trust, Married Filing Institutional $3,920 $196 Jointly 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 Corporations For the 2018 tax year, Utah-based corporations can claim a Utah state income tax deduction for contributions up to $1,960 per qualified beneficiary Maximum Allowable Contribution for a Utah State Income Tax Deduction 2018 Maximum Utah State Income Tax Deduction per Beneficiary my529 Tax Filer Account Type Corporation 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 Individuals For 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 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. PO Box , Salt Lake City, Utah my529.org

5 February 5, 2018, Supplement to the July 14, 2017, Program Description Utah Corporations For 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 Description The 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, 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, 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 Deadlines See 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 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 Deadlines See 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, Hand-delivered forms and contributions must be received at my529 offices by 5 p.m. MT. PO Box , Salt Lake City, Utah my529.org

6 February 5, 2018, Supplement to the July 14, 2017, Program Description 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 Deadlines To 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. Online Process Deadline Must be received by my529 before 11:59 p.m. MT Manual Process Deadline 1 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) Transfers (between accounts with different account owners) Monday, December 31, 2018 Monday, December 31, 2018 N/A Monday, December 31, 2018 Outgoing Rollovers N/A Friday, December 14, 2018 Note 1 Paper 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. ANNUAL WITHDRAWAL LIMITS FOR K-12 TUITION EXPENSES Description Effective 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). PO Box , Salt Lake City, Utah my529.org

7 February 5, 2018, Supplement to the July 14, 2017, Program Description 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 Description Operating 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 Funds FTSE Social Index VFTSX 0.20% December 21, 2017 Fund International Growth Fund 1, 2 VWILX 0.32% December 21, 2017 ROLLOVERS OF FUNDS FROM A MY529 ACCOUNT TO AN ABLE ACCOUNT Description Effective 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 Account my529 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 PO Box , Salt Lake City, Utah my529.org

8 February 5, 2018, Supplement to the July 14, 2017, Program Description 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. PO Box , Salt Lake City, Utah my529.org

9 SAVE FOR COLLEGE. INSPIRE THEIR FUTURE. Program Description JULY 14, 2017 Utah s official nonprofit 529 college savings program uesp.org

10 UESP Contact Information Mailing address UESP, PO Box , Salt Lake City, UT Physical address UESP, State Board of Regents Building, Gateway 2, 60 South 400 West, Salt Lake City, UT Toll-free telephone Local telephone Toll-free fax Website Hours of operation Days of operation uesp.org 8:00 a.m. 5:00 p.m., Mountain Time Monday Friday (closed federal, State of Utah, and Utah State Board of Regents holidays) Copyrights & Trademarks The 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.

11 CONTENTS Program Description Key Terms Summary of Plan Features Part 1 Introduction 1 About 529 Plans... 1 Understanding the Nature of a UESP Investment... 1 Part 2 Getting Started 3 Before Starting... 3 Opening an Account... 3 Welcome to UESP... 5 Part 3 Program Participation Information 6 Individual Accounts... 6 Institutional Accounts... 7 UGMA/UTMA Accounts... 8 Scholarship Programs... 9 Changing the Beneficiary Selecting an Investment Option Contributing to an Account Changing Account Contact Information Closing an Account Managing an Unused Account Balance Timing of Transactions Managing an Account Online Part 4 Contributions 14 Before Contributing Contribution Methods Year-End Contribution Deadlines Part 5 Rollovers and Transfers 19 Rollovers Transfers Part 6 Withdrawals 22 Withdrawing Funds Qualified Withdrawal Nonqualified Withdrawal Outgoing Rollover to Another 529 Plan Transfer Between UESP Accounts Year-End Withdrawal Deadlines Part 7 Investment Information 27 About the Investment Investment Options Age-Based Investment Options Static Investment Options Customized Investment Options Changing Investment Options July 14, 2017 i ii iv UESP Investment Option Asset Allocations Table Underlying Investments Investment Risks Associated with Underlying Investments Summary of Primary Investment Risks Associated with Investment Options Table Summary of Primary Investment Risks Associated with Underlying Investments Tables Investment Option Performance as of May 31, 2017, Table Investment Option Performance as of May 31, 2017, Table Part 8 Expenses and Fees 45 Fee Structure Operating Expense Ratios of the Underlying Funds UESP Administrative Asset Fee Transaction Fees UESP Asset Fee Structure Table UESP Approximate Cost of a $10,000 Investment Table Part 9 Tax Considerations 49 General Information Federal Tax Considerations State Tax Considerations Part 10 Key Risk Factors 54 Understanding Investments Higher Education Costs and Attendance Potential Changes Federal Financial Aid Risks Part 11 Other Legal and Administrative Information 56 Quarterly Account Statements No Pledging as Security for a Loan Limits on Representations Information Subject to Change Provision for Periodic Audits Extraordinary Events No Indemnification Limits on Protection from Creditors Privacy Policy Account Owner/Agent Obligations and Responsibilities Year-End Deadlines 60 Forms 61 Summary of Rules 63 Index 65 Utah Educational Savings Plan

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13 PROGRAM DESCRIPTION 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 Plan UESP 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 Investment Account Value Except 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 Insurance Except 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 Guarantees Except 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 Benefits The 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 States 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. Quick Reference Page Key terms... ii Contributing to an account... 11, 14 Limitations on transfers Nonqualified withdrawal Risk factors , 54 Investment options Investment option performance Expenses and fees Federal and state tax considerations Utah Educational Savings Plan i

14 Key Terms KEY TERMS 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. ii July 14, 2017

15 Key Terms 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. Utah Educational Savings Plan iii

16 Summary of Plan Features SUMMARY OF PLAN FEATURES 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. About 529 Plans See 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 Account Information See 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/Agent See 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 Control See 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. Beneficiary See 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. iv July 14, 2017

17 Summary of Plan Features Contributions and Account Balances See 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 Transfers See 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 Withdrawals See 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 Options See 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 Charges See 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 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 percent to percent. Add in the underlying fund Operating Expense Ratios, if any, and the total annual asset-based fees range from percent to 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 percent. Add in the underlying fund Operating Expense Ratios, if any, and the total annual asset-based fees range from percent to 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. Utah Educational Savings Plan v

18 Summary of Plan Features Tax Advantages See 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 Factors See 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 Policy See 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 Deadlines See 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, 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, Contributions or withdrawal requests postmarked in 2017 but received in 2018 will be considered contributions or withdrawals for the 2018 tax year. vi July 14, 2017

19 1 PART 1 INTRODUCTION This 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 529 Section 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 Plan The 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 Benefits Earnings 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 Value The 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 Utah Educational Savings Plan 1

20 Part 1 Introduction another investment option that includes FDIC-insured accounts as an underlying investment. FDIC Insurance Except 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 Guarantees Except 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 Fund Money 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 UESP It 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 July 14, 2017

21 2 PART 2 GETTING STARTED 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 STARTING Note the following information before opening a UESP account. General Information Each 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 UESP Verifying Identities UESP 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 ACCOUNT Before 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 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 Type Each 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. Utah Educational Savings Plan 3

22 Part 2 Getting Started Step 2: Name an Account Owner/Agent Each 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 Beneficiary Each 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 Step 4: Name Successor Account Owners Only 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 Option Each 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 Contribution Initial Contributions No 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 refund 1 Notes 1 Utah state income tax refunds may be deposited only in individual accounts. Additional Contributions Additional 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 Liquidated UGMA/UTMA Funds The 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 Funds A 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, 4 July 14, 2017

23 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 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 Contributions To mail a contribution, make the check payable to UESP and send it to: UESP, PO Box , Salt Lake City, UT Write the UESP account number and beneficiary s name on the front of the check. Step 7: Sign and Submit Paperwork An 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 , Salt Lake City, UT Hand delivery/overnight courier: UESP, State Board of Regents Building, Gateway 2, 60 South 400 West, Salt Lake City, UT Fax: Step 8: Set Up Online Account Access An 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 Packet Account Confirmation An 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 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 Certificate UESP 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. Documentation Program 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 Us To contact UESP to open an account, request forms, or ask program-related questions, info@uesp.org or call toll-free. Send written requests to UESP, PO Box , Salt Lake City, UT Detailed, important information about opening an account, and the rules, regulations, and policies governing the account, are included on the following pages. Utah Educational Savings Plan 5

24 3 PART 3 PROGRAM PARTICIPATION INFORMATION 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 ACCOUNTS A 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 Account Owner The 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 Owner The 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 Owner Upon 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 Owners An 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. 6 July 14, 2017

25 Part 3 Program Participation Information Changing Successor Account Owners An 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). Beneficiary The 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. Eligibility The 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 Information The 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 Considerations For 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 ACCOUNTS An 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/Agent Account Owner The 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 Agent The 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/Agent The 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 Documentation An institution must provide certain documents to open an account or to serve as a successor account owner on an individual Utah Educational Savings Plan 7

26 Part 3 Program Participation Information account. UESP will presume that any trust or corporate document provided is valid, effective, and has no legal defects. Trusts To 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 Entities To 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 Owners An 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. Beneficiary The 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. Eligibility The 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 Information The 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 Considerations An 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 ACCOUNTS An 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). 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 Account Owner/Agent Account Owner The minor is both the account owner and the beneficiary of an UGMA/UTMA account. Account Agent The 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 July 14, 2017

27 Part 3 Program Participation Information 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 Agent Only 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 Owner An 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. Beneficiary The 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 Information The 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 Beneficiary The beneficiary on an UGMA/UTMA account cannot be changed. Tax Considerations Liquidating 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 PROGRAMS Section 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 money Account 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 Utah Educational Savings Plan 9

28 Part 3 Program Participation Information questions by ing info@uesp.org or calling UESP toll-free at 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 account For 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 BENEFICIARY Section 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 Family Section 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 Family UESP 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 Benefits If 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 Penalties Under 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. 10 July 14, 2017

29 Part 3 Program Participation Information 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 OPTION When 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 ACCOUNT A contribution can be made to an account in the following ways: One-time or recurring electronic contribution from a checking or savings account 1 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 refund 2 Notes 1 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 INFORMATION UESP sends quarterly account statements and other communications that may contain confidential personal and account information to the mailing address or 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, address, and other information whenever the account contact information changes. Account information, including a mailing address or 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 CLOSING AN ACCOUNT An 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 Utah Educational Savings Plan 11

30 Part 3 Program Participation Information (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 Accounts UESP 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 BALANCE The 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 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 TRANSACTIONS UESP 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 Direction Section 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 Requests If 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 12 July 14, 2017

31 Part 3 Program Participation Information 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 ONLINE UESP 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 Parties An 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 Attorney An 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 ) or (2) through Account Access at uesp.org. Updating Contact Information If 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 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 Address Change Password Change Username Shared Access/Interested Parties Interested Parties Limited Power of Attorney Utah Educational Savings Plan 13

32 4 PART 4 CONTRIBUTIONS 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 CONTRIBUTING In 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 Owners Anyone 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 Restrictions All 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 Balance UESP 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 Balance Section 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. 14 July 14, 2017

33 Part 4 Contributions Contributions Received Without Proper Documentation UESP 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 Contributions A $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 Contributions An 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. 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 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. Utah Educational Savings Plan 15

34 Part 4 Contributions 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 1 An 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. Check UESP 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 , Salt Lake City, UT 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 Transfer A 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 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 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. 16 July 14, 2017

35 Part 4 Contributions Online Bill Pay 2 UESP 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 Plan See Part 5 Rollovers and Transfers for information about rolling over funds into a UESP account from another 529 plan. Transfers See 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 2 An 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 reminder of the upcoming contribution. See Notes on this page. Gift Program 2 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 Refund 3 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. Notes 1 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 This contribution method is only for individual and institutional accounts. 3 Utah state income tax refunds may only be deposited in individual accounts YEAR-END CONTRIBUTION DEADLINES See 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 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. Utah Educational Savings Plan 17

36 Part 4 Contributions 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 July 14, 2017

37 Part 5 Rollovers and Transfers 5 PART 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. ROLLOVERS An 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 Plan To 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 Rollover Utah 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 Plan An 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 Guarantee Some 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 Utah Educational Savings Plan 19

38 Part 5 Rollovers and Transfers 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 Rollover In 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. TRANSFERS Two types of transfers are available: Transfers between existing UESP accounts (internal transfers) Transfers into UESP from another type of savings vehicle A 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 Transfer An 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 Beneficiary Under 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 Beneficiary 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. See the Changing Investment Options section in Part 7 Investment Information to learn more. Full-Balance Transfer An 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 20 July 14, 2017

39 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 Transfer Transferring money to a beneficiary who is not a member of the family 1 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 Vehicle UGMA/UTMA Accounts Existing 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. 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 Qualified U.S. Savings Bonds Generally, 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. 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, Utah Educational Savings Plan 21

40 Part 6 Withdrawals 6 PART 6 WITHDRAWALS 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 FUNDS An 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 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 Withdrawals UESP 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. 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. Signature Guarantee Some 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 22 July 14, 2017

41 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 Payees A 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 Accounts An 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 $400 Account 2 Individual $6,000 $6,000 Account 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 Withdrawal Request Amount Withdrawn Balance Account 1 Individual $4,000 40% $1,000 $400 Account 2 Individual $6,000 60% $600 Aggregate Balance: $10,000 Total Withdrawn: $1,000 Withdrawing from Multiple Institutional or UGMA/UTMA Accounts Rules for proportional withdrawals apply to institutional and UGMA/UTMA accounts. Account agents may make proportional Utah Educational Savings Plan 23

42 Part 6 Withdrawals 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 Investments Withdrawals 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 Withdrawal An 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-Q Federal 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 Accounts If 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 Records The 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 Request If 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 Expenses An 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 WITHDRAWAL The earnings on a withdrawal used for qualified higher education expenses are exempt from federal and Utah state income taxes. 24 July 14, 2017

43 Part 6 Withdrawals 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 Expenses In 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 Institutions Section 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 WITHDRAWAL Funds 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 Penalties If 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 Penalties If 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 Taxes UESP 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 Penalties In 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 Utah Educational Savings Plan 25

44 Part 6 Withdrawals 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 PLAN For information about rolling over funds from UESP to another 529 plan, see Part 5 Rollovers and Transfers. TRANSFER BETWEEN UESP ACCOUNTS For information about withdrawing money from one UESP account and depositing it into another UESP account, see Part 5 Rollovers and Transfers YEAR-END WITHDRAWAL DEADLINES See 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. 26 July 14, 2017

45 Part 7 Investment Information 7 PART 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 Money UESP 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 Ownership An account owner does not own shares of, or direct interest in, the underlying investments. An account owner purchases units in $ ACCOUNT OWNER UESP TRUST $ UNDERLYING INVESTMENTS UNITS 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 Accounts The 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 Investments As 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 Statements UESP 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 notification of availability after the end of each quarter. The account owner/agent must provide UESP a current mailing address of record and/or 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 Utah Educational Savings Plan 27

46 Part 7 Investment Information online rather than receiving them in the U.S. mail. An account owner/agent who elects to view all communications online will receive an 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 OPTIONS UESP 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 The Summary of Primary Investment Risks Associated with Investment Options Tables on pages AGE-BASED INVESTMENT OPTIONS Age-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 0-3 Age 4-6 Age 7 9 Age Age Age 15 Age 16 Age 17 Age 18 Age 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 Global The 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 Domestic The 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. 28 July 14, 2017

47 Part 7 Investment Information Age-Based Moderate The 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 Conservative The 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 OPTIONS Static 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% Domestic The Equity 100% Domestic investment option is allocated to a single domestic equity fund. Equity 30% International The 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% International The 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 Income The 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 Income The 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 Income The Fixed Income investment option is allocated to a mix of domestic fixed-income funds. Public Treasurers Investment Fund The 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-Insured The 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 OPTIONS An 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 Utah Educational Savings Plan 29

48 Part 7 Investment Information option and making a customized account asset allocation. See pages 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 Investments The 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, 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 Customized Age-Based An 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. 30 July 14, 2017

49 Part 7 Investment Information Underlying Investments in the Customized Age-Based and Customized Static Investment Options 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 Fund 1 DFA U.S. Small Cap Value Portfolio 1 Vanguard Small-Cap Growth Index Fund 1 DFA Real Estate Securities Portfolio 1 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 Portfolio 1 Vanguard International Growth Fund 1 Vanguard Emerging Markets Stock Index Fund 1 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 Fund 1 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 Notes The 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 Fund 1 Public Treasurers Investment Fund 1 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. CHANGING INVESTMENT OPTIONS An 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 , 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. Utah Educational Savings Plan 31

50 Part 7 Investment Information UESP INVESTMENT OPTION ASSET ALLOCATIONS TABLE Vanguard Institutional Total Stock Market Index Fund Domestic Equity International Equity Fixed Income Cash Equivalent Vanguard Institutional Index Fund Vanguard Mid-Cap Index Fund Vanguard Small-Cap Index Fund Vanguard Total International Stock Index Fund Ticker Symbol VITPX VIIIX VMCPX VSCPX VTPSX VDIPX VEMRX VBMPX VTIFX VFSIX VBIPX N/A N/A AGE-BASED INVESTMENT OPTIONS Age % 26.0% 9.0% Age % 26.0% 9.0% Age % 22.0% 7.5% 8.5% 3.5% 3.0% Age % 18.5% 6.0% 16.0% 5.0% 9.0% Age % 15.5% 5.5% 16.5% 5.5% 18.0% Age % 13.0% 4.5% 17.5% 5.5% 22.0% 5.0% Age % 10.5% 3.5% 17.5% 5.5% 25.5% 11.5% Age % 8.0% 2.5% 18.0% 5.5% 27.5% 19.0% Age % 5.0% 2.0% 18.5% 6.0% 30.0% 25.5% Age % 2.5% 1.0% 19.0% 6.0% 32.5% 32.5% Age-Based Aggressive Global Age-Based Aggressive Domestic Age-Based Moderate Age % 3.0% 24.0% 56.0% Age % 15.5% 5.5% 15.0% 5.0% 14.0% 6.0% Age % 15.5% 5.5% 15.0% 5.0% 14.0% 6.0% Age % 12.0% 4.0% 18.0% 6.0% 19.0% 12.0% Age % 8.0% 2.5% 19.5% 5.5% 22.5% 22.5% Age % 5.0% 2.0% 22.5% 5.0% 21.5% 31.0% Age % 2.5% 1.0% 22.0% 5.0% 20.5% 42.5% Age % 4.5% 18.5% 55.0% Age % 3.5% 16.0% 64.5% Age % 2.5% 13.5% 73.5% Age % 1.0% 9.5% 85.5% STATIC INVESTMENT OPTIONS Equity 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 % CUSTOMIZED INVESTMENT OPTIONS Customized Age-Based The allocation mix in the Customized Age-Based and Customized Static investment options will vary based on the underlying investment Customized Static allocation chosen by the account owner/agent. Customized investment options are only available online under Account Access at uesp.org Available Underlying Investments Global Blended Equity and Fixed Income Ticker Vanguard Small-Cap Growth Index Fund 2 VSGIX Domestic Fixed Income Ticker Age-Based Conservative DFA 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 VFSIX Domestic Equity Ticker DFA U.S. Sustainability Core 1 Portfolio DFSIX Vanguard Short-Term Bond Index Fund VBIPX Vanguard Inst. Total Stock Mkt. Index Fund VITPX International Equity Ticker Vanguard Short-Term Infl.-Prot. Sec. Index Fund VTSPX Vanguard Institutional Index Fund VIIIX Vanguard Total International Stock Index Fund VTPSX Vanguard Total Bond Market Index Fund VBMPX Vanguard Value Index Fund VIVIX Vanguard Developed Markets Index Fund VDIPX Vanguard High-Yield Corporate Fund 2 VWEAX DFA U.S. Large Cap Value Portfolio DFLVX DFA International Value Portfolio 2 DFIVX International Fixed Income Ticker Vanguard Growth Index Fund VIGIX Vanguard International Growth Fund 2 VWILX Vanguard Total International Bond Index Fund VTIFX Vanguard Mid-Cap Index Fund VMCPX Vanguard Emerging Markets Stock Index Fund 2 VEMRX Global Fixed Income Ticker Vanguard Small-Cap Index Fund VSCPX Global Equity Ticker DFA Five-Year Global Fixed Income Portfolio DFGBX Vanguard Small-Cap Value Index Fund 2 VSIIX DFA Global Equity Portfolio DGEIX Cash Equivalent Ticker DFA U.S. Small Cap Value Portfolio 2 DFSVX FDIC-Insured Accounts 1 N/A Vanguard Developed Markets Index Fund Vanguard Emerging Markets Stock Index Fund Vanguard Total Bond Market Index Fund Vanguard Total International Bond Index Fund Vanguard Short-Term Investment-Grade Fund Age % Age % Age % 12.0% 3.0% Age % 21.0% 9.0% Age % 22.0% 18.0% Age % 23.0% 22.0% 5.0% Age % 23.0% 25.5% 11.5% Age % 23.5% 27.5% 19.0% Age % 24.5% 30.0% 25.5% Age % 25.0% 32.5% 32.5% Age % 21.0% 7.0% 11.0% 2.5% 6.5% Age % 21.0% 7.0% 11.0% 2.5% 6.5% Age % 17.0% 5.5% 14.0% 4.0% 12.0% 5.0% Age % 13.0% 4.5% 15.0% 5.0% 18.5% 11.5% Age % 10.5% 3.5% 16.5% 5.5% 21.0% 17.0% Age % 8.0% 2.5% 17.0% 5.0% 24.0% 24.0% Age % 5.0% 2.0% 18.0% 4.5% 26.0% 31.5% Age % 2.5% 1.0% 20.5% 4.5% 26.0% 39.0% Age % 4.5% 25.5% 47.0% Vanguard Short-Term Bond Index Fund Public Treasurers Investment Fund FDIC-Insured Accounts 1 Notes 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. 32 July 14, 2017