Fees and Expenses
The following table describes the fees and expenses you pay if you open and contribute to a Minnesota College Savings Plan account. These fees are directly or indirectly paid out of the assets of your account. Except for the fees listed below, there are currently no other fees, charges or penalties imposed or payable in connection with opening or maintaining an account, other than any taxes and related penalties. The Minnesota Office of Higher Education ("Office") or the Minnesota State Board of Investment ("Board") reserve the right to change the current fees, or to impose new or additional fees, expenses, charges or penalties in the future.
| Fee Table | ||||||
|---|---|---|---|---|---|---|
| Investment Option | Program Manager Fee(1)(2) |
Estimated Underlying Mutual Fund Expenses(3) |
State Fee(4)(5) |
Total Annual Asset-Based Fees(5) |
||
| Managed Allocation | ||||||
| Age Band 0-3 Years | 0.34%(6) | 0.16% | 0.0125% | 0.5125% | ||
| Age Band 4-7 Years | 0.34%(6) | 0.16% | 0.0125% | 0.5125% | ||
| Age Band 8-11 Years | 0.34%(6) | 0.16% | 0.0125% | 0.5125% | ||
| Age Band 12-14 Years | 0.34%(6) | 0.16% | 0.0125% | 0.5125% | ||
| Age Band 15-17 Years | 0.31%(6) | 0.19% | 0.0125% | 0.5125% | ||
| Age Band 18 and Over | 0.31%(6) | 0.19% | 0.0125% | 0.5125% | ||
| 100% Equity Option | ||||||
| 0.40% | 0.15% | 0.0125% | 0.5625% | |||
| Balanced Option | ||||||
| 0.44% | 0.16% | 0.0125% | 0.6125% | |||
| 100% Fixed Income Option | ||||||
| 0.43% | 0.17% | 0.0125% | 0.6125% | |||
| Money Market Option(7) | ||||||
| 0.40% | 0.15% | 0.0125% | 0.5625% | |||
| Guaranteed Option(5) | ||||||
| None(8) | None | None | None | |||
(1) The Plan Manager Fee and the State Fee are the only fees deducted from Plan assets. These fees may change at any time. Although there are no fees deducted from your account, when you invest in the Plan, you bear a pro rata portion of the Plan expenses because when fees are deducted from Plan assets, the value of the Plan units is reduced.
(2) Each investment option (with the exception of the Guaranteed Option) pays TFI a Plan Manager Fee equal to the stated percentage of the average daily net assets held by that investment option. However, for the Managed Allocation Option, the percentages listed in this column may fluctuate because generally, if the underlying fund expenses increase, then the Plan Manager Fee decreases.
(3) For each investment option (with the exception of the Guaranteed Option), the figures in this column are based on a weighted average of the expenses of each underlying fund’s expense ratio as reported in the applicable underlying Fund's most recent prospectus available prior to the date of this Supplement, in accordance with the investment option’s asset allocation among its underlying funds. Each investment option (with the exception of the Guaranteed Option) bears its pro rata portion of the underlying funds’ expenses because when fees are deducted from an underlying fund’s assets, the value of the underlying Fund's shares is reduced.
(4) Each investment option (with the exception of the Guaranteed Option) pays to the state of Minnesota a State Fee equal to 0.0125% of the average daily net assets held by that investment option to pay for expenses related to the administration of the Plan.
(5) The Total Annual Asset-Based Fees ("Total Fees") equal the estimated underlying fund expenses plus the Plan Manager Fee and the State Fee. The portion of Total Fees attributable to the Plan Manager Fee and the State Fee is assessed over the course of the year against assets in each investment option (with the exception of the Guaranteed Option). The portion of Total Fees attributable to estimated underlying fund expenses is borne by each investment option as discussed in footnote (3). You should refer to the Investment Cost Example for the total assumed investment cost over 1-, 3-, 5-, and 10-year periods.
(6) If the total assets in the Plan become equal to or greater than $1.5 billion, the Plan Manager Fee for the Managed Allocation Option will be reduced by 0.05%.
(7) Effective July 1, 2011, the Plan Manager and the Office have agreed to voluntarily waive the Money Market Option’s Plan Manager Fee and State Fee, respectively, as necessary in an attempt to maintain at least a 0.00% return for the option. The Plan Manager and the Office may discontinue the waiver at any time without notice. Please note that after the waivers, the net return for the Money Market Option may still be negative.
(8) The Guaranteed Option does not pay a Plan Manager Fee. TFI does, however, receive from TIAA-CREF Life, the issuer of the Funding Agreement, an annual asset based fee to pay TFI for distribution, administration, and other services that TFI provides for this investment option. TIAA-CREF Life may discontinue this fee at any time.
Investment Cost Example
The example in the following table is intended to help you compare the cost of investing in the different investment options over various time periods. This hypothetical example assumes:
- You invest $10,000 in an account for the time periods shown below.
- Your investment has a 5% compounded return each year, except for the Guaranteed Option, which is assumed to have a 3% compounded return each year.
- You withdraw the assets from your Account at the end of the specified periods to pay for Qualified Higher Education Expenses.
- Total annual asset-based fees remain the same as shown in the Fee Table above.
- The example does not consider the impact of any potential state or federal taxes on the redemption.
Although your actual costs may be higher or lower, based on the above assumptions your costs would be:
| Investment Cost Example | ||||
|---|---|---|---|---|
| Investment Option | Approximate Cost of $10,000 Investment |
|||
| One Year | Three Years | Five Years | Ten Years | |
| Managed Allocation Option | ||||
| Age Band 1 (0-3 Years) | $53 | $165 | $287 | $645 |
| Age Band 2 (4-7 Years) | $53 | $165 | $287 | $645 |
| Age Band 3 (8-11 Years) | $53 | $165 | $287 | $645 |
| Age Band 4 (12-14 Years) | $53 | $165 | $287 | $645 |
| Age Band 5 (15-17 Years) | $53 | $165 | $287 | $645 |
| Age Band 6 (18 and over) | $53 | $165 | $287 | $645 |
| 100% Equity Option | ||||
| $58 | $181 | $315 | $706 | |
| Balanced Option | ||||
| $63 | $197 | $343 | $767 | |
| 100% Fixed-Income Option | ||||
| $63 | $197 | $343 | $767 | |
| Money Market Option | ||||
| $58 | $181 | $315 | $706 | |
| Guaranteed Option | ||||
| $0 | $0 | $0 | $0 | |
The table below provides information concerning additional fees and expenses deducted from each account/paid directly by the account owner.
| Additional Fees | ||||
|---|---|---|---|---|
| Percent | Dollars | |||
| Application Fee | 0% | $0 | ||
| Cancellation Fee | 0% | $0 | ||
| Change in Beneficiary | 0% | $0 | ||
| Change in Investment Options | 0% | $0 | ||
| Other Charges as applicable | 0% | $0 | ||
