Supplement dated November 2, 2009 to New York s College Savings Program Advisor Plan Class A, B, and C Units Program Brochure and Tuition Savings Agreement dated January 2009 This Supplement updates information contained in the Advisor Plan Class A, B, and C Units Program Brochure and Tuition Savings Agreement dated January 2009 (the Program Brochure ) of New York s 529 College Savings Program (the Program ). You may obtain an additional copy of the Program Brochure, free of charge, through the Internet at www.ny529advisor.com or by calling 1.800.774.2108 (toll-free). Unless otherwise indicated, defined terms used herein have the same meaning as those in the Program Brochure. You should read this Supplement in conjunction with the Program Brochure and retain it for future reference. The purpose of this Supplement is to provide you with updated information regarding a change to the Target Allocations of the Asset Allocation s. * * * * * Effective November 2, 2009, the Program Brochure is revised as follows: In the section APPENDIX A: DESCRIPTION OF INVESTMENT OPTIONS AND THEIR TARGET ALLOCATIONS Asset Allocation Investment Option, the U.S. Treasury Index is added to the list of Underlying s in which each of the following Asset Allocation s invests: Growth NY 529, Moderate Growth NY 529, Balanced NY 529, Conservative NY 529, College NY 529, Diversified Income NY 529, and Current Income NY 529. In addition, the list of principal risks associated with investing in the Underlying s in which each of these Asset Allocation s invests are updated to include the following additional principal risk(s): Growth NY 529 : index risk and money market fund risk Moderate Growth NY 529 : index risk and money market fund risk Balanced NY 529 : index risk and money market fund risk Conservative NY 529 : index risk and credit risk and money market fund risk College NY 529 : index risk and money market fund risk Diversified Income NY 529 : index risk and money market fund risk Current Income NY 529 : index risk and money market fund risk The section APPENDIX A: DESCRIPTION OF INVESTMENT OPTIONS AND THEIR TARGET ALLOCATIONS Target Allocations of the Asset Allocation s will include a new allocation to the U.S. Treasury Index. The revised target portfolio allocations are as follows: Asset Allocation s Corresponding Beneficiary Ages for Aged-Based s: 0-4 Years 5-8 Years 9-12 Years 13-15 15 Years 16-18 18 Years Over 18 Years N/A N/A Asset Class Underlying Aggressive Growth NY 529 Growth NY 529 Moderate Growth NY 529 Balanced NY 529 Conservative NY 529 College NY 529 Diversified Income NY 529 Current Income NY 529 Large-Cap Equity Mid-Cap Equity Large Cap Value Large Cap Core Marsico Growth Mid Cap Growth 23.00% 18.00% 14.00% 10.00% 7.00% 7.00% 0% 0% 22.00% 18.00% 13.00% 11.00% 7.00% 6.00% 0% 0% 23.00% 18.00% 14.00% 10.00% 7.00% 7.00% 0% 0% 5.00% 4.00% 3.00% 2.25% 1.75% 0% 0% 0% 1
Small-Cap Equity International Equity Fixed Income/ Money Market Mid Cap Value Acorn Small Cap Value I Small Cap Growth II Acorn International Multi-Advisor International Equity Conservative High Yield Short Term Bond Intermediate Bond U.S. Treasury Index Cash Reserves High Income 5.00% 4.00% 3.00% 2.25% 1.75% 0% 0% 0% 1.00% 1.00% 0.50% 0% 0% 0% 0% 0% 3.00% 2.50% 1.75% 1.25% 0.75% 0% 0% 0% 3.00% 2.50% 1.75% 1.25% 0.75% 0% 0% 0% 3.00% 2.50% 1.75% 1.50% 0.50% 0% 0% 0% 12.00% 9.50% 7.25% 5.50% 3.50% 0% 0% 0% 0% 2.00% 4.00% 5.00% 0% 0% 34.00% 0% 0% 0% 0% 7.50% 15.00% 25.00% 16.00% 26.50% 0% 16.00%% 34.00% 33.00% 38.00% 28.00% 32.00% 0% 0% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 0% 0% 0% 7.50% 15.00% 25.00% 0% 45.00% 0% 0% 0% 0% 0% 0% 16.00% 26.50% Total 100% 100% 100% 100% 100% 100% 100% 100% Breakdown By Asset Classes: Equity s: 100% 80% 60% 45% 30% 20% 0% 0% Fixed Income/Money Market s: 0% 20% 40% 55% 70% 80% 100% 100% The following disclosure is added to the section APPENDIX A: UNDERLYING FUNDS Underlying Descriptions : U.S. Treasury Index Advised by Management Advisors, LLC Investment Objective and Principal Investment Strategies U.S. Treasury Index seeks total return that corresponds to the total return of the Citigroup Bond U.S. Treasury Index, before fees and expenses. Under normal circumstances, the invests at least 80% of its net assets in securities that comprise the Citigroup Bond U.S. Treasury Index. The Citigroup Bond U.S. Treasury Index is an unmanaged index composed of U.S. Treasury notes and bonds with remaining maturities of at least one year and outstanding principal of at least $25 million and which are included in the Citigroup Broad Investment Grade Bond Index. Different securities have different weightings in the Citigroup Bond U.S. Treasury Index. Securities in the Citigroup Bond U.S. Treasury Index are weighted by market value, that is, the price per bond or note multiplied by the number of bonds or notes outstanding. In seeking to match the performance of the Citigroup Bond U.S. Treasury Index, before fees and expenses, the s investment advisor attempts to allocate the s assets among securities in the Citigroup Bond U.S. Treasury Index. In determining whether to include a security in the s portfolio, the advisor will consider a security s effect on the s total market value, average coupon rate, and average weighted maturity as compared to the Citigroup Bond U.S. Treasury 2
Index. The will only purchase securities that are included in the Citigroup Bond U.S. Treasury Index at the time of purchase. The attempts to achieve at least a 95% correlation between the performance of the Citigroup Bond U.S. Treasury Index and the s investment results, before fees and expenses. The s ability to track the Citigroup Bond U.S. Treasury Index is affected by, among other things, transaction costs and other expenses, changes in the composition of the Citigroup Bond U.S. Treasury Index, and by the timing and amount of shareholder purchases and redemptions. The will not hold all of the securities in the Citigroup Bond U.S. Treasury Index. The advisor may sell a security when the security s percentage weighting in the index is reduced, when the security is removed from the index, or for other reasons. The s policy regarding the 80% investment requirement of net assets (which includes net assets plus any borrowings for investment purposes) discussed above may be changed by the s Board of Trustees without shareholder approval as long as shareholders are given 60 days notice of the change. Principal Risks of Investing The principal risks presented by an investment in the include investment strategy risk, market risk, index risk, interest rate risk, credit risk, U.S. government obligations risk, and money market fund risk. (See UNDERLYING FUND RISKS below.) The following disclosure is added to the section APPENDIX A: UNDERLYING FUND RISKS : Index Risk. An underlying fund s value will generally decline when the performance of its targeted index declines. Because the underlying fund is designed to track an index before fees and expenses, the underlying fund cannot purchase other securities that may help offset declines in its index. In addition, because the underlying fund may not hold all issues included in its index, may not always be fully invested, and bears advisory, administrative and other expenses and transaction costs in trading securities, the underlying fund s performance may fail to match the performance of its targeted index, after taking expenses into account. It is not possible to invest directly in an index. The section APPENDIX A: INVESTMENT ADVISORS OF THE UNDERLYING FUNDS includes U.S. Treasury Index in the list of funds managed by Management Advisors, LLC. In the section APPENDIX B: ADVISOR PLAN-LEVEL EXPENSES Expense Tables, the expense tables are revised as follows: 3
Expense Tables Class A Units Annual Asset-Based Fees Additional Investor Expenses 1 Estimated Underlying Expenses 2 Management and Administration Fee Distribution & Service Fee State Fee 3 Total Annual Asset-Based Fees 4 Maximum Initial Sales Charge 5 Annual Account Maintenance 6 Growth NY 529 (Beneficiary Age 5-8 Years in Age-Based ) Moderate Growth NY 529 (Beneficiary Age 9-12 Years in Age-Based ) Balanced NY 529 (Beneficiary Age 13-15 Years in Age-Based ) Conservative NY 529 (Beneficiary Age 16-18 Years in Age-Based ) College NY 529 (Beneficiary Age Over 18 Years in Age-Based ).88% 0.30% 0.25% NONE 1.43% 5.75% $25.82% 0.30% 0.25% NONE 1.37% 5.75% $25.73% 0.30% 0.25% NONE 1.28% 5.75% $25.63% 0.30% 0.25% NONE 1.18% 4.75% $25.54% 0.30% 0.25% NONE 1.09% 4.75% $25 Diversified Income NY 529.71% 0.30% 0.25% NONE 1.26% 4.75% $25 Current Income NY 529.47% 0.30% 0.25% NONE 1.02% 4.75% $25 1 Certain other fees may also be assessed. Please refer to TRANSACTION FEES for a description of other fees that may be assessed. 2 The figures above are based on the total operating expense ratio for the most recent fiscal year reported upon in the applicable fund s most recent financial statements or prospectus. For investment options invested in multiple registered mutual funds, the figures are based on a weighted average of each fund s total operating expense ratio as reported in the applicable fund s most recent financial statements or prospectus, in accordance with the investment option s asset allocation among the applicable funds as of September 30, 2009. The total operating expense ratio measures the annual operating expenses of an Underlying as a percentage of its average daily net assets. Operating expenses for each Underlying include investment advisory fees, administration, distribution, shareholder servicing and shareholder administration fees, and other expenses paid to affiliates and non-affiliates of. 3 No separate fee is charged by the Program Administrators. The Program Manager and Investment Manager pay an aggregate amount of $355,000 to the Program Administrators annually to help defray the costs of administering the New York Program. The amount of this payment is subject to increase to reflect increases in the Consumer Price Index ( CPI ). This payment is not deducted from any Accounts. 4 This total is assessed against assets over the course of the year and does not include sales charges or Account maintenance fees. Please refer to the table beginning on page B-12 that shows the total assumed investment cost over 1-, 3-, 5-, and 10-year periods. 5 Please refer to the chart on page B-18 for information regarding applicable breakpoint discounts. 6 An annual Account fee of $25 will be assessed on an Account (at the Account level and not at the level) unless the aggregate value of all Units held in all Accounts of the Account Owner for the same Beneficiary equals or exceeds $25,000 at the time the Account fee is assessed. The fee will be assessed during the month following the anniversary date of the Account opening, beginning 12 months after the Account is opened. If an Account Owner makes a full withdrawal from the Account prior to the anniversary date in a given year, the annual Account fee may be charged against the withdrawal. 4
Expense Tables Class B Units* Annual Asset-Based Fees Additional Investor Expenses 1 Estimated Underlying Expenses 2 Management and Administration Fee Distribution & Service Fee State Fee 3 Total Annual Asset-Based Fees 4 Maximum Initial Sales Charge 5 Annual Account Maintenance 6 Growth NY 529 (Beneficiary Age 5-8 Years in Age-Based ) Moderate Growth NY 529 (Beneficiary Age 9-12 Years in Age-Based ) Balanced NY 529 (Beneficiary Age 13-15 Years in Age-Based ) Conservative NY 529 (Beneficiary Age 16-18 Years in Age-Based ) College NY 529 (Beneficiary Age Over 18 Years in Age-Based ).88% 0.30% 1.00% NONE 2.18% 5.00% $25.82% 0.30% 1.00% NONE 2.12% 5.00% $25.73% 0.30% 1.00% NONE 2.03% 5.00% $25.63% 0.30% 1.00% NONE 1.93% 5.00% $25.54% 0.30% 1.00% NONE 1.84% 5.00% $25 Diversified Income NY 529.71% 0.30% 1.00% NONE 2.01% 5.00% $25 Current Income NY 529.47% 0.30% 1.00% NONE 1.77% 5.00% $25 * In general, Class B Units automatically convert into Class A Units in the eighth year after purchase. The conversion may occur before the eighth year, depending on the amount invested in the Advisor Plan. See Choosing Unit Classes Class B Units below. 1 Certain other fees may also be assessed. Please refer to TRANSACTION FEES for a description of other fees that may be assessed. 2 The figures above are based on the total operating expense ratio reported upon in the applicable fund s most recent financial statements or prospectus. For investment options invested in multiple registered mutual funds, the figures are based on a weighted average of each fund s total operating expense ratio as reported in the applicable fund s most recent financial statements or prospectus, in accordance with the investment option s asset allocation among the applicable funds as of September 30, 2009.. The total operating expense ratio measures the annual operating expenses of an Underlying as a percentage of its average daily net assets. Operating expenses for each Underlying include investment advisory fees, administration, distribution, shareholder servicing and shareholder administration fees, and other expenses paid to affiliates and non-affiliates of. 3 No separate fee is charged by the Program Administrators. The Program Manager and Investment Manager pay an aggregate amount of $355,000 to the Program Administrators annually to help defray the costs of administering the New York Program. The amount of this payment is subject to increase to reflect increases in the Consumer Price Index ( CPI ). This payment is not deducted from any Accounts. 4 This total is assessed against assets over the course of the year and does not include sales charges or Account maintenance fees. Please refer to the table beginning on page B-12 that shows the total assumed investment cost over 1-, 3-, 5-, and 10-year periods. 5 In general, the CDSC of Class B Units declines each year you hold the Units and varies based on the amount of the contribution. See Choosing Unit Classes Class B Units below. Please refer to pages B-18 through B-19 for more information regarding CDSCs. Please refer to the chart on page B-18 for information regarding applicable breakpoint discounts. 6 An annual Account fee of $25 will be assessed on an Account (at the Account level and not at the level) unless the aggregate value of all Units held in all Accounts of the Account Owner for the same Beneficiary equals or exceeds $25,000 at the time the Account fee is assessed. The fee will be assessed during the month following the anniversary date of the Account opening, beginning 12 months after the Account is opened. If an Account Owner makes a full withdrawal from the Account prior to the anniversary date in a given year, the annual Account fee may be charged against the withdrawal. 5
Expense Tables Class C Units Annual Asset-Based Fees Additional Investor Expenses 1 Estimated Underlying Expenses 2 Management and Administration Fee Distribution & Service Fee State Fee 3 Total Annual Asset-Based Fees 4 Maximum Initial Sales Charge 5 Annual Account Maintenance 6 Growth NY 529 (Beneficiary Age 5-8 Years in Age-Based ) Moderate Growth NY 529 (Beneficiary Age 9-12 Years in Age-Based ) Balanced NY 529 (Beneficiary Age 13-15 Years in Age-Based ) Conservative NY 529 (Beneficiary Age 16-18 Years in Age-Based ) College NY 529 (Beneficiary Age Over 18 Years in Age-Based ).88% 0.30% 1.00% NONE 2.18% 1.00% $25.82% 0.30% 1.00% NONE 2.12% 1.00% $25.73% 0.30% 1.00% NONE 2.03% 1.00% $25.63% 0.30% 0.85% NONE 1.78% 1.00% $25.54% 0.30% 0.85% NONE 1.69% 1.00% $25 Diversified Income NY 529.71% 0.30% 0.85% NONE 1.86% 1.00% $25 Current Income NY 529.47% 0.30% 0.85% NONE 1.62% 1.00% $25 1 2 3 4 5 6 Certain other fees may also be assessed. Please refer to TRANSACTION FEES for a description of other fees that may be assessed. The figures above are based on the total operating expense ratio for the most recent fiscal year reported upon in the applicable fund s most recent financial statements or prospectus. For investment options invested in multiple registered mutual funds, the figures are based on a weighted average of each fund s total operating expense ratio as reported in the applicable fund s most recent financial statements or prospectus, in accordance with the investment option s asset allocation among the applicable funds as of September 30, 2009. The total operating expense ratio measures the annual operating expenses of an Underlying as a percentage of its average daily net assets. Operating expenses for each Underlying include investment advisory fees, administration, distribution, shareholder servicing and shareholder administration fees, and other expenses paid to affiliates and non-affiliates of. No separate fee is charged by the Program Administrators. The Program Manager and Investment Manager pay an aggregate amount of $355,000 to the Program Administrators annually to help defray the costs of administering the New York Program. The amount of this payment is subject to increase to reflect increases in the Consumer Price Index ( CPI ). This payment is not deducted from any Accounts. This total is assessed against assets over the course of the year and does not include sales charges or Account maintenance fees. Please refer to the table beginning on page B-12 that shows the total assumed investment cost over 1-, 3-, 5-, and 10-year periods. A CDSC is applied to withdrawals attributable to Class C Units only when the withdrawal is made within twelve months of contribution. See Choosing Unit Classes Class C Units below. Please refer to pages B-18 through B-19 for more information regarding CDSCs. An annual Account fee of $25 will be assessed on an Account (at the Account level and not at the level) unless the aggregate value of all Units held in all Accounts of the Account Owner for the same Beneficiary equals or exceeds $25,000 at the time the Account fee is assessed. The fee will be assessed during the month following the anniversary date of the Account opening, beginning 12 months after the Account is opened. If an Account Owner makes a full withdrawal from the Account prior to the anniversary date in a given year, the annual Account fee may be charged against the withdrawal. 6
In the section APPENDIX B: ADVISOR PLAN-LEVEL EXPENSES Hypothetical Expense Tables, the hypothetical expense tables are revised as follows: Unit Class Number of Years You Own Your Units Growth NY 529 (Beneficiary Age 5-8 Years in Age-Based ) Moderate Growth NY 529 (Beneficiary Age 9-12 Years in Age-Based ) Balanced NY 529 (Beneficiary Age 13-15 Years in Age-Based ) Conservative NY 529 (Beneficiary Age 16-18 Years in Age-Based ) College NY 529 (Beneficiary Age Over 18 Years in Age-Based ) Diversified Income NY 529 Current Income NY 529 1 Year 3 Years 5 Years 10 Years Class A (With or Without Redemption) 712 1,000 1,308 2,172 Class B (Redemption at End of Period) 746 1,005 1,389 2,325 Class B (No Redemption) 221 680 1,164 2,300 Class C (Redemption at End of Period) 346 705 1,189 2,512 Class C (No Redemption) 221 680 1,164 2,487 Class A (With or Without Redemption) 706 983 1,278 2,109 Class B (Redemption at End of Period) 740 987 1,358 2,263 Class B (No Redemption) 215 662 1,133 2,238 Class C (Redemption at End of Period) 340 687 1,158 2,451 Class C (No Redemption) 215 662 1,133 2,426 Class A (With or Without Redemption) 698 957 1,233 2,015 Class B (Redemption at End of Period) 731 960 1,313 2,169 Class B (No Redemption) 206 635 1,088 2,144 Class C (Redemption at End of Period) 331 660 1,113 2,358 Class C (No Redemption) 206 635 1,088 2,333 Class A (With or Without Redemption) 590 831 1,090 1,824 Class B (Redemption at End of Period) 721 930 1,262 2,064 Class B (No Redemption) 196 605 1,037 2,039 Class C (Redemption at End of Period) 306 584 985 2,097 Class C (No Redemption) 181 559 960 2,072 Class A (With or Without Redemption) 581 804 1,044 1,727 Class B (Redemption at End of Period) 712 902 1,216 1,968 Class B (No Redemption) 187 577 991 1,943 Class C (Redemption at End of Period) 297 556 938 2,002 Class C (No Redemption) 172 531 913 1,977 Class A (With or Without Redemption) 597 855 1,130 1,909 Class B (Redemption at End of Period) 729 954 1,303 2,148 Class B (No Redemption) 204 629 1,078 2,123 Class C (Redemption at End of Period) 314 608 1,026 2,182 Class C (No Redemption) 189 583 1,001 2,157 Class A (With or Without Redemption) 574 783 1,009 1,651 Class B (Redemption at End of Period) 705 881 1,180 1,893 Class B (No Redemption) 180 556 955 1,868 Class C (Redemption at End of Period) 290 535 902 1,927 Class C (No Redemption) 165 510 877 1,902 7
The following disclosure is added to the section APPENDIX B: UNDERLYING FUND EXPENSES : Total Annual Name of Underlying Operating Expenses of the s Underlying s U.S. Treasury Index.20% 11 11 The Advisor has voluntarily agreed to reimburse a portion of the s expenses so that the s ordinary operating expenses (excluding any distribution and service fees, brokerage commissions, interest, taxes and extraordinary expenses, but including custodian charges relating to overdrafts, if any), after giving effect to any balance credits from the s custodian, do not exceed 0.20% of the s average daily net assets on an annualized basis. The Advisor, in its discretion, may revise or discontinue this arrangement at any time. 529NY-47/24398-1009 8