Effective - 28 Aug 2021, 3 histories
166.420. Participation agreements, terms and conditions — contribution limitation — penalty. — 1. The board may enter into program participation agreements with participants on behalf of beneficiaries pursuant to the provisions of sections 166.400 to 166.455, including the following terms and conditions:
(1) A participation agreement shall stipulate the terms and conditions of the program in which the participant makes contributions;
(2) A participation agreement shall specify the method for calculating the return on the contribution made by the participant;
(3) The execution of a participation agreement by the board shall not guarantee that the beneficiary named in any participation agreement will be admitted to an eligible educational institution, be allowed to continue to attend an eligible educational institution after having been admitted or will graduate from an eligible educational institution;
(4) A participation agreement shall clearly and prominently disclose to participants the risk associated with depositing moneys with the board;
(5) Participation agreements shall be organized and presented in a way and with language that is easily understandable by the general public; and
(6) A participation agreement shall clearly and prominently disclose to participants the existence of any load charge or similar charge assessed against the accounts of the participants for administration or services.
2. The board shall establish the maximum amount that may be contributed annually with respect to a beneficiary.
3. The board shall establish a total contribution limit for savings accounts established under the program with respect to a beneficiary to permit the program to qualify as a "qualified state tuition program" pursuant to Section 529 of the Internal Revenue Code. No contribution may be made to a savings account for a beneficiary if it would cause the balance of all savings accounts of the beneficiary to exceed the total contribution limit established by the board. The board may establish other requirements that it deems appropriate to provide adequate safeguards to prevent contributions on behalf of a beneficiary from exceeding what is necessary to provide for the qualified education expenses of the beneficiary.
4. The board shall establish the minimum length of time that contributions and earnings must be held by the program to qualify pursuant to section 166.435. Any contributions or earnings that are withdrawn or distributed from a savings account prior to the expiration of the minimum length of time, as established by the board, shall be subject to a penalty pursuant to section 166.430.
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(L. 1998 H.B. 1694, A.L. 1999 S.B. 460, A.L. 2006 S.B. 641, A.L. 2010 S.B. 772, A.L. 2018 S.B. 882, A.L. 2021 H.B. 297)