Employer FAQ's
Q. Why are so many employees asking employers for 529 Plans?
A. Employees are aware of the advantages 529 plans provide for college savings but don't know how to start.
Because most employees must make smaller, scheduled payments into 529 plans, most financial planners aren't serving the average employee. This means employers can provide a great service to employees in the form of a benefit that greatly interests employees. Said another way, employers can provide significant value to their employees without additional cost by sponsoring CollegeTuitionBenefit.net.
Q. Do employers have to offer payroll deduction as an option?
A. No. Many employers offer direct deposit and accommodate a direct deposit into a 529 account that has already been established.
Offering a plan that does not require payroll deduction means spouses may participate as well.
Q. If my company already sponsors a 529 Plan, can it also offer the College Tuition Benefit?
A. The 529 Plan you offer may be one already offered through College Tuition Benefit. If not, we can most likely add your Plan alongside the other 529 Plans offered. In this way, employees will get the 5% contribution to their SAGE Scholarship Fund.
Q. What are the advantages of offering CollegeTuitionBenefit.net over other marketplace options?
A.
- Employees receive an immediate and visible benefit in the form of SAGE College Scholarship.
- Leverage the employer's purchasing power and reduce investment sales loads to employees.
- Maintain compliance. Our website houses and distributes all required information.
- Provide a choice of investments and a benefit platform that accommodates change.
Q. What if our company has employees in a state that currently does not have a plan offered under CollegeTuitionBenefit.net?
A. A common misconception is that there is always an advantage to investing in your resident state's plan.
The current 529 plan offering is based on our evaluation of the best plans available as well as what our current clients have requested that we negotiate. We are adding new plans as our customer base requires.
Q. What is the cost to my company?
A.
| ELIGIBLE EMPLOYEES |
ANNUALLY |
| 10-250 |
$750 |
| 251-999 |
$500 plus $2.25 PEPY |
| 1000+ |
$1000 plus $2.25 PEPY |
There is no cost for the SAGE Scholarship matches or initial $500. The above cost is a total cost regardless of how many thousand dollars of SAGE Scholarships are awarded.
A one-time setup fee of $500 applies to groups of 250 employees or less. Groups over 251 employees have a $1,000 setup charge.
Q. What does it cost my employees?
A. There are no direct costs charged to employees.
All 529 plans have asset charges associated with the investment. In many cases these charges are lower through College Tuition Benefit than if the investment were made as an individual.
Q. What are the reporting requirements for employers who offer a 529 Plan?
A. 529 Plans are not governed by ERISA. There are no federal or state reporting requirements at this time.
CollegeTuitionBenefit.net has been designed for minimal employer involvement.
Q. Why do the participating colleges offer the SAGE scholarships?
A. These colleges are interested in attracting future students to their institutions. In exchange for the scholarship, the institutions get their school name in front of students who may not have considered the school.
Many schools use financial aid as a method to attract quality students. This aid is offered as tuition reductions. Knowing this, College Tuition Benefit's partner, SAGE, has negotiated with member colleges to automatically present a financial reward to families who save for college.
Q. Is there any limit to the how large a SAGE Scholarship can grow?
A. The maximum SAGE scholarship for a student is equal to one year's tuition distributed over four years of attendance.
Q. How does an employer offer the College Tuition Benefit?
A. It is as simple as signing the applications, paying the setup fee, and communicating the benefit to employees.
Q. How does my company get started?
A. Contact Michael Ackerman at (610) 520-4900 or information@collegetuitionbenefit.net.
Q. Do beneficiaries have to go to a SAGE Scholarship school in order to receive the scholarship?
A. SAGE Scholarships can only be redeemed at participating SAGE institutions.
Q. How does participation in College Tuition Benefit impact a child's chances for getting into college?
A. College Tuition Benefit is not a guarantee of admission into one of the participating colleges. At the same time, the program in no way limits a student's choice of majors or your fields of study. Nor does the program impact the ability of the family to apply for financial aid. Alternately, SAGE awards can be used even when financial need does not exist.
Q. What happens to a person's 529 plan assets if a child does not enroll in a participating SAGE college?
A. 529 assets can be used at any accredited college or university. However, if you choose a SAGE facility, the savings are significant.
Remember that while the 5% award is provided on each 529 account an employee opens, all awards aggregate in a single employee account. This means an employee can benefit a child who chooses a SAGE college with scholarship awards earned from other children’s 529 accounts.
Q. I don't see any colleges my child wants to attend.
A. Don't be discouraged. By the time a child is ready to apply to college, additional schools of interest may very well be members of the network. And remember, there is no cost to join the program.
Q. Are SAGE Scholarships taxable?
A. No. With a scholarship or other form of reduced tuition, you're not receiving actual money; you're just paying less for college.
Please consult your tax advisor for more details.
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Email site to HR Dept. | Email site to spouse/grandparent.