Does anyone else find the fees on the funds in DC's 529 plan troubling?

[Anonymous]

Anonymous wrote:You can open account in DC, take the state tax deduction, then transfer to another state's 529. I'm a financial advisor and we recommend the Utah plan to many clients.

Are there fees or penalties for that? How soon do you have to transfer it?

[Anonymous]

DC 529 was #1 ranked last year.

http://www.savingforcollege.com/articles/2013-plan-performance-rankings-q2

[Anonymous]

Anonymous wrote:

Anonymous wrote:You can open account in DC, take the state tax deduction, then transfer to another state's 529. I'm a financial advisor and we recommend the Utah plan to many clients.

Are there fees or penalties for that? How soon do you have to transfer it?

Can you do this on an annual basis? Contribute to our DC account, take the deduction, then transfer it into the Utah account, and then contribute to the DC account again?

[Anonymous]

I just looked up the transfer issue. The info on the DC 529 website is below. It looks like there can be tax consequences (or not) depending on the timing.

Any deduction is subject to recapture if a distribution
is made from the Account other than to pay Qualified
Expenses or in the event the Beneficiary dies, has a
disability, or receives a scholarship (to the extent the
scholarship is equal or greater than the amount of the
distribution). The deduction is also subject to recapture
if, within two years of establishing the Account,
the Account is rolled over into another state’s qualified
tuition program. Amounts recaptured are included
in the Account Owner’s income for DC Income Tax
purposes in the year of withdrawal or rollover of the
funds.

[Anonymous]

Strong performance makes me worry that they are managing really aggressively relative to benchmark. I hope there is really strong oversight.

[Anonymous]

Anonymous wrote:

Anonymous wrote:If I want to switch my investments out of DC's 529 to that of another state or vanguard, is there a holding period requirement, or can I do so immediately?

Tia

You can do it immediately to another state plan. All 529 plans are run by states. You cannot go directly to Vanguard. Quite a few states use Vanguard funds including Utah & Nebraska.

All 529's aren't run by states
https://personal.vanguard.com/us/whatweoffer/college/vanguard529?Link=facet
https://www.privatecollege529.com/OFI529/PN/generated/en_us/PrimaryNavigation_03-26-10-093449.xml

[Anonymous]

Anonymous wrote:DC 529 was #1 ranked last year.

http://www.savingforcollege.com/articles/2013-plan-performance-rankings-q2

How does this (ranking above) square with the negative opinions prevalent in the discussion?

[Anonymous]

We have participated for about four years and see that the performance tracks pretty well with our other investments. We just realized that each parent can start a 529 so the tax deduction will be double. I think it's worth it for at least up to the tax deduction.

[Anonymous]

You can transfer funds between 529's once a year

I don't look only at performance, but at expenses
DC's plan has an expense ratios up to 2%, some plans are 0.3% or even less
When I put money aside for college, I'm less concerned with the immediate tax break, and more concerned with just how much money will be there when college tuition comes due. Perhaps this isn't the right way to look at it? I have been thinking that Calvert might show a 5yr 12% annual growth for the fund but took 5x2% over that time, where vanguard might show a 5yr 12% annual growth but only took 5x0.28% during that time, leaving me with 8% more to spend

[Anonymous]

Anonymous wrote:You can transfer funds between 529's once a year

I don't look only at performance, but at expenses
DC's plan has an expense ratios up to 2%, some plans are 0.3% or even less
When I put money aside for college, I'm less concerned with the immediate tax break, and more concerned with just how much money will be there when college tuition comes due. Perhaps this isn't the right way to look at it? I have been thinking that Calvert might show a 5yr 12% annual growth for the fund but took 5x2% over that time, where vanguard might show a 5yr 12% annual growth but only took 5x0.28% during that time, leaving me with 8% more to spend

I look at it the same way, which is why I opted for Utah instead of the Calvert DC plan.