Dear Bright Directions Investor,
I want to thank you for saving with the Bright Directions Advisor-Guided 529 College Savings Program. This plan continues to experience double digit growth in accounts and assets and has been recognized as one of the top two advisor-sold plans in the nation by Morningstar1, earning a silver medal rating two years in a row.
My office recently concluded an open and competitive bid process and we are excited to share that Union Bank & Trust, who has managed Bright Directions since its inception in 2005, will remain program manager. I’m also pleased to inform you that, in mid-July, we lowered the Bright Directions program management fee by an additional 17%, on top of the 44% fee cut we were able to negotiate in 2015. In addition, we cut my office’s administrative fees by 40%. These fee reductions, automatically initiated in mid-July, were achieved while retaining the program’s outstanding benefits, features, and services – meaning more of your hard-earned dollars stay in your college savings account.
There is no action required by you.
Keep in mind, Illinois has a generous $10,000 and $20,000 state income tax deduction for contributions2. This is a great time to start an automatic investing plan, increase your monthly savings amount, or make an additional contribution. Any money you set aside now will help down the road when it comes time to pay for the rising costs of college.
Again, a sincere thank you for investing with Bright Directions.
1 Bright Directions earns Silver rating once again—the highest rating given to advisor-sold plans. October 25, 2016 – Morningstar, a leading provider of independent investment research, announced new Analyst Ratings and reports for 63 of the nation’s largest 529 college savings plans. In 2016, Morningstar identified 33 plans that it believes to be best-in-class options, assigning these programs Analyst Ratings of Gold, Silver, and Bronze. These plans, for the most part, follow industry best practices, offering some combination of the following attractive features: a strong set of underlying investments; a solid manager selection process; a well-researched, asset-allocation approach; an appropriate set of investment options to meet investor needs; low fees; and strong oversight from the state and program manager. These features improve the odds that the plan will continue to represent a strong option for investors. Gold-rated plans have all or a vast majority of these attributes. Silverand Bronze-rated plans embody most of these qualities but often have some room for improvement. Since 2012, ratings for 529 plans use the same scale as the Morningstar Analyst Rating for mutual funds. Both Analyst Rating methodologies consider the same five factors to arrive at the final rating, though the 529 ratings reflect the quality of the entire plan—not a single investment, as is the case for the fund rating. To arrive at an Analyst Rating for 529 plans, analysts consider: Process; People; Parent; Performance; Price. Bright Directions Morningstar Pillar Ratings: Process – Positive | People – Positive | Parent – Neutral | Performance – Neutral | Price – Positive. Morningstar rates the five Pillars: Positive, Neutral, or Negative. While these ratings can help with the selection process, they should not be the only factor considered. A Morningstar Analyst Rating for a 529 College Savings Plan is not a credit or risk rating. Analyst Ratings are subjective in nature and should not be used as a sole basis for investment decisions. Morningstar does not represent its Analyst Ratings to be guarantees. Please visit Morningstar.com for more information about the Analyst Ratings, as well as other Morningstar ratings and fund rankings.
2 An individual who files an individual Illinois state income tax return will be able to deduct up to $10,000 per tax year (up to $20,000 for married taxpayers filing a joint Illinois state income tax return) for their total, combined contributions to the Bright Directions College Savings Program, the Bright Start College Savings Program, and CollegeIllinois! during that tax year. The $10,000 (individual) and $20,000 (joint) limit on deductions will apply to total contributions made without regard to whether the contributions are made to a single account or more than one account. The amount of any deduction previously taken for Illinois income tax purposes is added back to Illinois taxable income in the event an Account Owner takes a Nonqualified Withdrawal from an Account or if such assets are rolled over to a non-Illinois 529 plan. If Illinois tax rates have increased since the original contribution, the additional tax liability may exceed the tax savings from the deduction.