Childrens Savings Accounts May 16, 2017 www.savingsforkids.org - - PowerPoint PPT Presentation

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Understanding the “Account” in Children’s Savings Accounts

May 16, 2017

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Welc lcome

Monica Copeland Senior Program Manager Children’s Savings CFED

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Housekeepin ing

• This webinar is being recorded and will

be available online and emailed to those who registered

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• Ask a question any time by typing the

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Our mission at CFED is to make it possible for millions of people to achieve financial security and contribute to an

• pportunity

economy.

About CFED

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How We e Do

• It

We push to expand innovative practical solutions that empower low- and moderate-income people to build wealth. We drive policy change at all levels of government. We support the efforts of community leaders across the country to advance economic opportunity for all.

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• Provide a high-level overview of the account types used for CSA

programs

• Provide examples of how different financial institutions are

working with current CSA programs in order to expand children’s savings

Goals ls of f th the Webin inar

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• Background information
• CSAs
• Account considerations
• Presentations
• Hastings City Bank (HCB)
• Utah Educational Savings Plan (UESP)
• Questions and Answers
• Resources

Webin inar Overvie iew

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Presenters

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• Long-term savings or investment accounts for children (0-18)
• Usually used for postsecondary education expenses
• Provide incentives to build savings (e.g., seed deposit and

matches)

• Account withdrawals are restricted

Background - What Are CSAs?

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• Type of financial institution
• Bank
• Credit union
• 529 plan provider
• Back-end structure
• Account set-up
• Program coordinator interactions
• Participant experience
• Participant interactions with account

Account Components

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Key Account Features

For Participants

• No SSN or ID required to
• pen account
• Multiple deposit options
• Ability to track accounts &

incentives

• Interest-bearing or

investment growth potential

• Account funds do not count

towards asset limits for public benefits For Program Coordinators

• Ability to open large numbers
• f accounts at a time
• Ability to provide account

activity reports

• System for differentiating

between participant deposits & incentive funds

• Custodial or trust accounts

held by a third party

• No/low fees for CSA program

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Account Custodia ian

• Purpose
• Enable automation and scale
• Open accounts on behalf of minors
• Secure savings
• Protect families from asset limits
• Key attributes
• Trusted by families
• Able to make long-term commitment
• Same as program coordinator or different organization

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Addit itio ional Account Details

For more information on accounts, review CFED’s CSA guide, Investing In Dreams: A Blueprint for Designing Children’s Savings Account Programs http://bit.ly/InvestingInDreams

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About Hastings Cit ity Bank

• Founded in 1886
• Based in Hastings, Michigan
• Interest in Children’s Savings Accounts (CSAs)
• Introduction to Kickstart to Career
• FDIC Youth Pilot

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• Developing program with CSA

partners

• Financial education
• Marketing

Partnership ip wit ith Kic ickstart to Career

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• Type of account at the bank
• Data sharing
• Account opening process
• Initial & incentive deposits
• Public and private funds
• Account packets
• Deposit options
• Withdrawal process
• Account contact
• Reporting data to Foundation

Account Specif ifics

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Websit ite

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• Successes
• Challenges
• Recommendations

Lessons Learned

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Contact

Nancy Goodin, CFMP Assistant Vice President, Marketing Director ngoodin@hcb.us Dawn Braden Retail Operations Manager dbraden@hcb.us

Children’s Savings Account Provider

CFED Webinar Series

May 16, 2017

Why a 529 College Savings Plan?

A 529 plan is an investment account designed specifically to encourage saving for the higher education expenses of a beneficiary. Benefits

• Investment options with opportunity for growth
• Earnings grow tax-free and withdrawals are tax-free

when used for qualified higher education expenses

• Exposure to saving and investment principles can

augment program curriculum

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About UESP

UESP is a nonprofit public entity responsible for the fourth-largest direct-sold 529 plan in the nation.

• $10.6 billion in assets
• 339,000 accounts nationwide
• Highest rating by Morningstar Inc.
• Provides its own program management

Committed to developing a college-bound identity in children while helping families save.

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CSA Program Support

UESP Support of CSA programs began with the “I Have A Dream” Foundation in 2012 CSA Platform

• Scalable to program size
• Simple account signup with automatic program

affiliation

• Incorporates incentives
• Tracks account data and provides reporting

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CSA Account Structure

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Program Account Attributes

Scholarship Account

• Each account has one beneficiary
• Contributions are invested in a default option
• Program sponsor controls the contributions and

withdrawals

Family-Owned Account

• Account owner must be at least 18 years old
• Contributions can be made by check, money order,
• nline bill pay/bank transfer, or payroll deduction
• Family contributions can be a requirement for

matching incentives

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UESP Supports Programs Nationwide

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Considerations for New CSA Program Sponsors

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• 1. What are the program features and objectives?
• 2. What program administration roles will be required?
• 3. Which CSA model should be used, e.g. scholarship or

family-owned accounts?

• 4. How will the account opening process be facilitated with families?
• 5. What activities or criteria will trigger account funding?
• 6. What data reporting will be necessary to manage the program?
• 7. What are the withdrawal requirements, and what will the process

look like?

Important Legal Notice

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• Read the UESP 529 Program Description for more information and consider all

investment objectives, risks, charges, and expenses before investing. Call 800.418.2551 for a copy of the Program Description or visit uesp.org.

• Investments in UESP are not guaranteed by UESP, the Utah State Board of Regents,

the Utah Higher Education Assistance Authority, or any other state or federal

• agency. However, Federal Deposit Insurance Corporation (FDIC) insurance is

provided for the FDIC-insured accounts. Please read the Program Description to learn about the FDIC-insured accounts. Investments could lose value.

• Non-Utah taxpayers and residents should determine whether the state in which

they or the beneficiary pays taxes or lives offers a 529 plan that provides state tax

• r other benefits not otherwise available by investing in UESP. All investors should

consider such state tax treatment or benefits, if any, before investing in UESP.

• UESP does not provide legal, financial, investment, or tax advice, and the

information provided in this document does not contain legal, financial, investment, or tax advice and cannot be construed as such or relied upon for those

• purposes. You should consult your own tax or legal advisor to determine the effect
• f federal and state tax laws on your particular situation.
• 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 the sole

basis for investment decisions. Please visit Morningstar.com for more information about the Analyst Ratings, as well as other Morningstar ratings and fund rankings.

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Questio ions & Answers

What questions do you have for the presenters? Please share them in the chat box!

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• Monica Copeland, CFED – mcopeland@cfed.org
• Nancy Goodin, Hastings City Bank – ngoodin@hcb.us
• Dawn Braden, Hastings City Bank – dbraden@hcb.us
• Todd Mortensen, UESP – tmortensen@uesp.org

Contact In Information

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CSA Resources

CSA Design Guide http://bit.ly/InvestingInDreams CSA Directory http://cfed.org/programs/csa CSA Resources (FAQs, Programs, Policy, Research) http://savingsforkids.org/resources

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Join today to help achieve our vision of

1.4 million Children’s Savings Accounts by 2020!

Join in th the Campaig ign for Every Kid’s Futu ture

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Thank You!

Upcoming CSA Webinars

Wednesday, July 26 (2-3 pm EDT) Developing Program Goals & Interim Metrics for CSA Programs Wednesday, October 25 (2-3 pm EDT) Children’s Savings Account Program Design Spotlight