Features Of The NJ 529 Plan

Franklin Templeton manages the 529 College Savings Plan in the state of New Jersey. This is a savings plan, as the name suggests, and the account is opened through a broker. The state agency for managing this plan is the New Jersey state HESAA (Higher Education Student Assistance Authority).

The following are some features of the NJ 529 plan:

1. The plan is open to both residents as well as nonresidents. Both of them will have to enter into this plan through agencies. All individuals who have reached the legal age and legal entities like trusts and corporations are allowed to become owners or participants in these plans.

2. For both residents and nonresidents, the maximum allowable contribution with the NJ 529 plan is $305,000.

3. There is a minimum limit for making contributions. The minimum limit for the first contribution is kept at $250 per owner per beneficiary. After that, further contributions of $50 each are to be made. These limits are the same for all account owners, resident and nonresident.

4. There are no fees for enrollment or for opening an account, but sales charges might be applicable in certain cases. However, there is a fee to maintain the account. An annual fee of $25 is imposable with contributions that are at the most $25,000. These fees are applicable only to people who are not residents of New Jersey. For residents of the state, the annual maintenance fee is waived off. In addition there is a 0.40% account manager fee, and servicing fees that might range from 0.25% to 1%.

5. People who are the beneficiaries of a NJ 529 plan become eligible for up to $1,500 in tuition fees at any college or university within the state. These eligibilities are subject to meeting with the requirements of the plans.

6. The NJ 529 plan includes an automatic investment plan, to which monthly contributions can be made. The minimum amount required to open an automatic investment plan is $50, and that amount of additional purchase needs to be made to keep the automatic plan active. For account owners who have joined in the automatic investment plan, there is a waiver of the annual maintenance fees.

7. A qualified withdrawal from a NJ 529 plan can be made at any time. However, if an account owner makes an unqualified withdrawal, i.e. a withdrawal for a purpose other than paying the tuition fees of the beneficiary, then there is a penalty of 10% of the value of the plan.