Prepaid College Trust - Disclosure Statement & Enrollment Information 2021-2022 - Maryland 529
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2021–2022
Maryland Senator Edward J. Kasemeyer
Prepaid College Trust
Disclosure Statement
& Enrollment Information
Enrollment Period
December 1, 2021–June 30, 2022
This Disclosure Statement has been identified by Maryland 529 as the offering material intended to provide substantive disclosure of the terms and conditions of an investment in the Maryland Senator Edward J. Kasemeyer Prepaid College Trust. The Disclosure Statement is designed to comply with the Disclosure Principles Statement No. 7, adopted by the College Savings Plan Network on October 6, 2020. Previously, this Disclosure Statement was combined with the Disclosure Statement for the Maryland Senator Edward J. Kasemeyer Prepaid College Trust and the Highlights Brochure and collectively referred to as the “Enrollment Kit.” This Disclosure Statement replaces the Enrollment Kit as the offering materials for the Prepaid College Trust. Maryland does not guarantee investment returns. Investments in the Maryland Senator Edward J. Kasemeyer Prepaid College Trust are backed by a Maryland Legislative Guarantee. In the event that the Trust ever experiences a financial shortfall, Maryland law requires the Governor to include funds in the State budget to allow the Trust to pay your full Benefits. As with the entire State budget, the Maryland General Assembly has final approval. Section 529 Plans offered by other states may offer tax or other benefits to taxpayers or residents of those states that are not available in the Maryland Senator Edward J. Kasemeyer Prepaid College Trust, and taxpayers or residents of those states should consider such state tax treatment or other state benefits such as financial aid, scholarship funds, and protection from creditors, if any, before making an investment decision. Section 529 Plans are intended to be used only to save for Qualified Higher Education Expenses. These Plans are not intended to be used, nor should they be used, by any taxpayer for the purpose of evading federal or state taxes or tax penalties. Taxpayers may wish to seek tax advice from an independent tax professional based on their own particular circumstances. Account Holders should periodically assess, and if appropriate, adjust their investment choices with their time horizon, risk tolerance and investment objectives in mind. Investing is an important decision. Please read all Offering Materials in their entirety before making an investment decision.
Table of Contents Contract—2021–2022 2 Article I Introduction Article II Definitions Article III Participation in the Prepaid College Trust Article IV Contract Payments Article V Benefits Article VI Rollovers and Refunds Article VII Substitutions Article VIII Termination Article IX General Provisions Operations and Additional Information 15 Risk Factors 15 Prepaid College Trust Operations 17 Plan Governance And Administration 17 Comprehensive Investment Plan 18 Performance Information 20 Contract Pricing 21 Key Federal Tax Issues 21 Federal Taxation of Distributions from Your Account 22 Key State Tax Issues 22 Privacy Policy 23 Creditor Protections 24 Prices and Fees 24 MARYLAND529.COM 1 888.4MD.GRAD
Maryland Senator Edward J. Kasemeyer
Prepaid College Trust 2021–2022
Disclosure Statement
For specific information on the Maryland Senator Edward different from the information in the most current form of
J. Kasemeyer Prepaid College Trust (Maryland Prepaid this Disclosure Statement. Please read it carefully and save
College Trust, Prepaid College Trust or Trust) please read this it for future reference. Certain capitalized terms used in this
document in its entirety. This Disclosure Statement contains Disclosure Statement are defined in the Contract, which can
important information you should review before opening an be found below.
Account in the Maryland Prepaid College Trust, including
If you have read the Disclosure Statement and would like to
information about the benefits and risks of investing. We
learn more about the features and benefits of the Maryland
believe that this information is accurate as of the date of this
529 Plans, please refer to the Frequently Asked Questions
Disclosure Statement, but it is subject to change without
section on our website at Maryland529.com/faqs or login to
notice. No one is authorized to provide information that is
your Account at Maryland529.com/prepaid-login.
Contract—2021–2022
Article I Introduction This Contract is not a promise or a guarantee that:
This agreement describes the basic terms and conditions of
1. the Beneficiary will be admitted to any
the Maryland Prepaid College Trust (Prepaid College Trust)
Eligible Institution;
as authorized by Education Article Title 18, Subtitle 19 of the
Annotated Code of Maryland (Enabling Legislation). Once you 2. the Beneficiary will be allowed to continue enrollment
complete the online enrollment process to open an Account at any Eligible Institution after admission;
and it is accepted by the Maryland Prepaid College Trust
3. the Beneficiary will be graduated from any
(Board, we, our, or us), a Participation and Payment Schedule
Eligible Institution;
outlining the information from the online enrollment will be
issued to you. The Maryland Prepaid College Trust does not 4. the Beneficiary will be classified as an in-state or
cover tuition or other educational expenses in connection in-county student by any Maryland Public College;
with enrollment or attendance at an elementary or secondary
5. the Beneficiary will receive any particular treatment
public, private, or religious school.
under any applicable state or federal financial aid
Completing the 2021–2022 enrollment means that programs; and/or
you agree to be bound by the terms and conditions of
6. the Beneficiary’s Tuition at any Eligible Institution will be
this document. The Prepaid College Trust Disclosure
covered in full for the number of years purchased under
Statement, and once you enroll, the enrollment
this Contract unless the Beneficiary attends a Maryland
confirmation and the Participation and Payment
Public College that determines the Beneficiary to be a
Schedule, together constitute the entire agreement
Maryland or County resident, as applicable, and all of the
between you and the Board and are called "the
terms and conditions of this Contract are satisfied.
Contract." You should retain a copy of the Contract, any
updates to the Contract and your Account Statements
for your records.
The Enabling Legislation, regulations, and any guidelines
Article II Definitions
we adopt will be available for inspection at the offices of The definitions of terms included in the Enabling Legislation
Maryland 529. You or any other interested party may receive apply to this Contract and are incorporated by reference. In
a copy of the Enabling Legislation and the Contract by addition, the following definitions apply to Contracts:
contacting Maryland 529.
1. Academic Year means a school year consisting of
two semesters, three trimesters, or four quarters that
MARYLAND529.COM 2 888.4MD.GRADwill lead to an associate’s degree, a bachelor’s degree, 9. Declaration means the Declaration of Trust of the
or a graduate degree, depending on the type of Maryland Prepaid College Trust.
institution in which the Beneficiary is enrolled. One full
10. Disabled or Disability means the condition of a
Academic Year is defined as the amount of full-time,
Beneficiary who is unable to do any substantial gainful
undergraduate Tuition required to cover two academic
activity by reason of any medically determinable physical
semesters at no more than 15 credit-hours per semester
or mental impairment which can be expected to result in
or the financial equivalent.
death or to be of long-continued and indefinite duration.
2. Account means the record that contains the details An individual shall not be considered to be disabled unless
of payments, fees charged and/or paid, Benefits proof of the existence thereof in such form and manner as
purchased, Benefits used, remaining Benefits, and may be required by applicable regulations is furnished.
refunds in connection with a particular Beneficiary under
11. Earnings means the amount reported to the IRS on
this Contract.
Form 1099-Q (or other applicable form) for the same
3. Account Holder or you means you, or an individual, or tax year as the distribution. For distributions under this
legally recognized entity such as a corporation (for-profit Contract, the Earnings are calculated as follows:
or nonprofit), partnership, association, trust, foundation,
I. if a Benefit is paid, the difference between the Benefit
guardianship, or estate that completes an Enrollment
paid to an Eligible Institution and your payments, or
establishing an Account. Appropriate documentation
may be required upon enrollment and when requests are II. if you take a refund, the difference between your
submitted on behalf of the fiduciary Account Holder. In payments and the amount of your refund.
certain cases, the Account Holder and the Beneficiary
may be the same person. 12. Electronic Attestation means an acknowledgment
by an Account Holder that must be completed prior to
4. Account Holder’s Successor means the person named
submission of certain online transactions.
in this Contract (or in similar documents later filed
with us) by the Account Holder, who may exercise the 13. Eligible Institution shall have the meaning ascribed
rights of the Account Holder under this Contract if the to an “eligible educational institution” in Section 529(e)
Account Holder dies or is declared legally incompetent of the Code except that for purposes of the Prepaid
(unless, in the latter case, a power of attorney, guardian, Trust, the definition is limited to any institution of higher
conservator, or similar individual is in place and is education that offers an associate, bachelor, or graduate
recognized by the Prepaid Trust to act on behalf of the degree program and is eligible to participate in federal
legally incompetent Account Holder). financial aid programs.
5. Beneficiary or student means a person who is 14. FDIC means the Federal Deposit Insurance Corporation.
entitled to receive Benefits under a Contract and
15. Good Order means all documents and information
who meets eligibility criteria at the time the Account
necessary to process a transaction have been provided
Holder completes the online process. Under certain
and received in such a form and manner as required by
circumstances, the Beneficiary and the Account Holder
the Program Manager.
may be the same.
16. Initial Benefit Eligibility means the year in which
6. Benefits means the payments by the Trust provided
a Beneficiary may begin to use Benefits due to the
under this Contract that are described in Articles V and
three-year minimum maturity period.
VI of this Contract.
17. IRS means the Internal Revenue Service.
7. Code means the Internal Revenue Code of 1986, as
amended. There are references to various sections 18. Mandatory Fees means fees assessed to all students by
of the Code throughout this Disclosure Statement, an Eligible Institution as a condition of enrollment at the
including Section 529 as it currently exists and as it Eligible Institution, and which have been approved by
may subsequently be amended, and any regulations the Board. Mandatory Fees do not include any fee that is
adopted thereunder. assessed by the Eligible Institution for a particular course
taken, year of enrollment, academic status, course of
8. Custodian means the individual who executed an
study, residency status, or any other distinguishing factor
enrollment on behalf of an Account Holder who is
used by the Eligible Institution to determine a specific fee.
a minor. Generally, the Custodian will be required to
perform all duties of the Account Holder with regard to 19. Maryland Public College means any public Eligible
the Account until the Account Holder attains the age Institution in the State of Maryland. You may find a list of
of majority, is otherwise emancipated, or the Custodian Eligible Institutions at Maryland529.com/faqs.
is changed, removed, or released. The Custodian of an
20. Maximum Benefits means the cap on per semester
Account funded from an UGMA/UTMA account may not
benefits payable under the Prepaid College Trust, which
change the Account Holder or Beneficiary.
is 15 credit hours for each semester (or the equivalent
MARYLAND529.COM 3 888.4MD.GRADapplicable to a particular institution) which is reflected in System (US), 10-Year Treasury Constant Maturity Rate
the maximum semester unit amount payable under each (DGS10), as retrieved from FRED, Federal Reserve Bank
plan type. of St. Louis (fred.stlouisfed.org/series/DGS10).
21. Medallion Signature Guarantee means a type of legally 24. Non-Qualified Distributions means all distributions
binding endorsement that ensures that your signature that are not used to pay Qualified Higher Education
is genuine, and that the financial company issuing the Expenses as defined in Section 529 of the Code.
guarantee accepts liability for any forgery. You can obtain
25. Operating Expenses means a certain percentage of
a Medallion Signature Guarantee from some banks,
Contract payments duly made under this Contract.
savings institutions, and broker-dealers.
The percentage is determined annually and can be
22. Member of the Family means an individual as defined in found in the Schedule of Fees.
Section 529(e)(2) of the Code. Generally, this definition
26. Participation and Payment Schedule means a schedule
includes a Beneficiary’s spouse and the following other
sent to you after the acceptance of your Prepaid Trust
relatives of the Beneficiary:
enrollment of the payments due under your Contract.
• Son, daughter, stepchild, foster child, adopted
27. Program Manager means the institution selected by the
child, or a descendant of any of them;
Board to provide the Program Management Services, as an
• Brother or sister (including half-brothers or
independent contractor, on behalf of the Prepaid College
half-sisters), stepbrother, or stepsister;
Trust, the Trust, and the Trustee. Intuition College Savings
• Father or mother, or ancestor of either;
Solutions is currently engaged as Program Manager.
• Stepfather or stepmother;
• Son or daughter of a brother or sister; 28. Projected College Enrollment Year (or “PEY”) means
• Son-in-law, daughter-in-law, father-in-law, the year that the Beneficiary is projected to begin using
mother-in-law, brother-in-law, or sister-in-law; Contract Benefits based on the information about the
• The spouse of any individual listed above; Beneficiary’s age or grade contained in the enrollment.
• First cousin.
29. Qualified Distribution means a distribution that is:
23. Minimum Benefit means payments duly made under • Used to pay Qualified Higher Education Expenses
this Contract, minus Operating Expenses, plus a certain (including distributions used to pay Qualified Higher
rate of return. Education Expenses that were refunded by the
Eligible Institution and re-contributed to a Qualified
Accounts in existence on October 31, 2021:
Tuition Program for the same Beneficiary within 60
For Accounts in existence on October 31, 2021, days of the refund);
contributions in your Account prior to October 31, 2021 • Payable upon the Beneficiary’s death or Disability;
will earn 6% on balances, compounded monthly, until • Made because the Beneficiary received a Scholarship,
Benefits are withdrawn, or your Contract is terminated. grant, and/or tuition remission provided that the
total amount is greater than or equal to the amount
Contributions made on or after November 1, 2021
distributed; or
will accrue regular interest each year, compounded
• A Rollover Distribution.
monthly, at a rate equal to the 10-year Treasury note
rate. The Treasury note yield applicable to the Account
30. Qualified Higher Education Expenses means Qualified
contributions will be updated annually with the June
Higher Education Expenses as defined in Section 529
30th number.
of the Code, except that for purposes of the Prepaid
The yield for the 10-year Treasury note will be sourced Trust, the definition does not include any amount of
from the Board of Governors of the Federal Reserve tuition in connection with enrollment or attendance at
System (US), 10-Year Treasury Constant Maturity Rate an elementary or secondary public, private or religious
[DGS10], as retrieved from FRED, Federal Reserve Bank school. Generally, these include the following:
of St. Louis (fred.stlouisfed.org/series/DGS10).
• Tuition, fees, and costs of textbooks, supplies, and
Accounts opened on or after November 1, 2021: equipment required for the enrollment or attendance
of a student at an Eligible Institution;
Contributions to Accounts opened on or after November 1,
2021 will accrue regular interest each year, compounded • Certain costs of room and board of a Beneficiary
monthly, at a rate equal to the 10-year Treasury note rate. during any academic period during which the
Treasury note yield applicable to the Account contributions Beneficiary is enrolled at least half time at an Eligible
will be updated annually with the June 30th number. Institution;
The yield for the 10-year Treasury note will be sourced • Expenses for special needs services in the case of
from the Board of Governors of the Federal Reserve a special needs Beneficiary, which are incurred in
MARYLAND529.COM 4 888.4MD.GRADconnection with such enrollment or attendance at an iii. from a Qualified Tuition Program to an Achieving a
Eligible Institution. (As of the date of this Disclosure Better Life Experience (ABLE) account for the same
Statement, “special needs” Beneficiary has not been Beneficiary or for a different beneficiary, provided
defined by the IRS); and that the receiving beneficiary is a Member of the
Family of the original Beneficiary. Please consult with
• Expenses for the purchase of computers and
the receiving ABLE plan to confirm any additional
peripheral equipment (e.g., printers), computer
restrictions or requirements imposed by the ABLE
software, and Internet access and related services,
plan. Federal law requires rollovers to an ABLE
to the extent that such items or services are used
account to take place by December 31, 2025.
primarily by the Beneficiary during any of the years
the Beneficiary is enrolled at an Eligible Institution.
35. Scholarship means a scholarship, allowance, or payment
• Certain expenses associated with an apprenticeship as described in §530(d)(4)(B)(iii) and (iv) of the Code,
program registered and certified with the Secretary of including payments made on account of attendance at a
Labor under section 1 of the National Apprenticeship U.S. military academy.
Act (29 U.S.C. 50).
36. Tuition, as defined by §18–1901 of the Education Article
• Principal or interest on any qualified education loan of the Maryland Code, means the actual Tuition and
(as defined in Section 221(d) of the Code) of the Mandatory Fees assessed to all students by an Eligible
designated beneficiary or a sibling of the designated Institution as a condition of enrollment at the institution.
beneficiary provided that the amount of distributions Tuition does not include any fee that is assessed by the
treated as a qualified higher education expense with Eligible Institution for a particular course taken, year of
respect to the loans of any individual shall not exceed enrollment, academic status, course of study, residency
a lifetime limit of $10,000. status, or any other distinguishing factor used by the
Eligible Institution to determine a specific fee.
Note: Distributions to pay for the qualified education
loan of a sibling of the Beneficiary, while federally 37. UGMA/UTMA means the Uniform Gifts to Minors Act/
tax-free, may be subject to State tax consequences. Uniform Transfers to Minors Act.
38. Weighted Average Tuition is calculated as follows:
31. Recontribution means a refund of any Qualified Higher
for 4-year Eligible Institutions — dividing (A) the in-state
Education Expenses from an Eligible Institution which is
Tuition at each 4-year Maryland Public College
recontributed to the Prepaid College Trust for the benefit
multiplied by the number of full-time equivalent in-state
of the same beneficiary, but only to the extent such
students enrolled at such 4-year Maryland Public
recontribution is made not later than 60 days after the
College, added together by (B) the total number of
date of such refund and does not exceed the lesser of
full-time equivalent in-state students enrolled at all
the refunded amount, or the amount distributed from the
4-year Maryland Public Colleges.
Prepaid Trust.
The Weighted Average Tuition applicable to community
32. Reinstatement means the process by which an Account
colleges is calculated by a similar method using in-county
that has been involuntarily canceled due to non-payment
Tuition and enrollment.
is reinstated to an active status and brought current.
The Weighted Average Tuition is for the entire Academic
33. Resident means a person who is a resident of the State
Year and is calculated annually, typically in the early
of Maryland or the District of Columbia at the time the
summer for the following Academic Year, and remains in
online enrollment process is completed. For Maryland, this
effect for the entire Academic Year regardless of whether
is defined as someone who is required to file a Maryland
any Maryland four-year public college or community
tax return if he or she otherwise has sufficient income to
college, as applicable, adjusts Tuition for that same year.
file a return. For the District of Columbia, Resident means
Please refer to Maryland529.com/faqs for the current
a legal resident of the District of Columbia.
academic year’s Weighted Average Tuition.
34. Rollover Distribution means a transfer of assets:
i. between Qualified Tuition Programs for the same
Beneficiary, provided another rollover or transfer for
the same Beneficiary has not occurred in the previous
12 months, or
ii. to an account for a different Beneficiary, provided that
the receiving Beneficiary is a Member of the Family of
the original Beneficiary, or
MARYLAND529.COM 5 888.4MD.GRADSuccessor during the online enrollment process. You may
Article III Participation in the add or change an Account Holder Successor at any time by
Prepaid College Trust providing us with written notice.
Enrolling. To participate in the Prepaid College Trust, you Right to Information. To protect your privacy, Account
must complete the online enrollment process. You and your information is provided only to the Account Holder or
Beneficiary must each be a U.S. citizen (or a resident alien) Custodian. However, you may also direct in writing that
and have a valid U.S. Address as well as a Social Security someone other than the Account Holder may request and
number (if the Account Holder is a trust, a federal tax receive information regarding the Account.
identification number is accepted). Either the Beneficiary or
Documents in Good Order. To process any transaction
the Account Holder must be a Resident of Maryland or the
on your Account, all documents necessary to process that
District of Columbia at the time the online Enrollment process
transaction must be in good order, which means executed
is completed for Prepaid College Trust.
when required and properly, fully, and accurately completed.
We have the sole discretion to determine whether an
Multiple Accounts/Purchase of Additional Years. You may
enrollment is accepted. New individual Account Holder's
have more than one Account for a Beneficiary and you may
will be required to provide specific information and/or
buy an additional semester or years for the same Beneficiary.
documentation for identity verification as requested by the
However, no more than seven years of Tuition may be
Prepaid College Trust.
purchased for the same Beneficiary, with no more than five
In order for your 2021–2022 enrollment to be accepted years purchased on a single Account. No more than one year
and for you to receive the Contract prices applicable to or two semesters may be purchased for the same Academic
2021–2022 Contracts, you must complete the 2021–2022 Year. You may buy additional year(s) for your Beneficiary
online enrollment process and submit all of the required at any time during the year. If the purchase takes place
documentation, and any required fee or payment, to us in outside of an Enrollment Period, the prices for the previous
good order prior to the end of the 2021–2022 Enrollment Enrollment Period will be in effect.
Period which typically falls on June 30 of the respective
You will maintain the original Contract and Account number,
enrollment year. The following are exceptions in which
as well as enter into a new Contract and receive a new
we will accept enrollments (online only) after the end of
Account number for the additional semester(s) or year(s).
the Enrollment Period, prior to the first day of the next
A separate online enrollment process may be needed for
Enrollment Period:
additional contracts.
i. enrollment of a newborn under the age of one;
UGMA/UTMA. You may open your Account with proceeds
ii. enrollment by an Account Holder who has the same of an UGMA/UTMA account. To do so, you must indicate
beneficiary enrolled in the Maryland College Investment during the online enrollment process that the contributions
Plan; or to the Account are liquidated UGMA/UTMA assets. The
minor will become the Account Holder and Beneficiary. The
iii. current Account Holders purchasing additional
Account must also have a Custodian until the Beneficiary
semesters/years for the same Beneficiary in the
reaches the age of majority under the terms of the UGMA/
Prepaid College Trust.
UTMA account. Unlike other Accounts in the Prepaid
College Trust, before the age of the Beneficiary’s majority,
Tuition Plans. The Prepaid College Trust offers three tuition
the Beneficiary and Account Holder cannot be changed
plans: the University Plan (one semester or one, two, three,
and distributions cannot be made other than for the
or four years); the Community College Plan (one or two years
benefit of that Beneficiary. Therefore, any discussion in
of community college); and the Two-Plus-Two Plan (first two
this Enrollment Kit regarding the transfer of your Account
years of the Community College Plan with two subsequent
to another Beneficiary applies to an Account funded from
years of the University Plan).
an UGMA/UTMA only upon the Beneficiary reaching the
Separate Accounting. There is a separate Account for age of majority. Any additional contributions to this type of
each Contract. In addition, separate accounting records that Account will be treated in the same manner. The Custodian
track payments, fees charged and/or paid, and Benefits and/ retains the capacity to act on behalf of the Account until he
or refunds paid are maintained for each Account Holder. or she informs the Prepaid College Trust that the terms of the
However, the mere existence of an Account does not create a original UGMA or UTMA have been satisfied.
right to, or interest in, any portion or share of Prepaid College
Coverdell Education Savings Account. You may open your
Trust assets or earnings.
Account with the proceeds of a Coverdell Education Savings
Ownership. An Account may have only one Account Holder. Account. Please indicate during the online enrollment process
that the assets were liquidated from this kind of an account.
Account Holder Successor. The Account Holder Successor
Unlike UGMA/UTMA accounts, the Beneficiary may be
becomes the Account Holder if you die or are declared
changed to a Member of the Family of the Beneficiary of the
legally incompetent. You may designate an Account Holder
Coverdell Education Savings Account. Making distributions
MARYLAND529.COM 6 888.4MD.GRADfrom a Coverdell Education Savings Account to fund an Returned Payments. We reserve the right to cancel
Account for the same Beneficiary is not a taxable transaction. any electronic payment after receiving (2) returned
Consult your tax professional for more information. payment notices from our bank. The Account Holders
will be responsible for any fees generated as a result of
U.S. Savings Bonds. In certain cases, you may redeem
returned payments.
qualified U.S. Savings Bonds under the Education Tax
Exclusion and open your Account with the proceeds. Please Due Dates. Payments are due in the amounts stated on the
visit treasurydirect.gov for more information. enrollment confirmation and the Participation and Payment
Schedule. In order to avoid late fees, you are responsible for
making all payments when due, regardless of the receipt of
Article IV Contract Payments program communications.
Payment Options. The Prepaid College Trust has four All initial payments following enrollment are due on the first
payment options: of the month on or before 60 days after enrollment.
1. Lump Sum Payment. A one-time payment that For example, if you enrolled on January 8, 2022, your initial
covers the full amount of the Contract. payment would be due no later than March 1, 2022.
2. Annual Payment. Equal yearly payments for For annual payments, the next annual payment would be due
a designated number of years. March 1, 2023. For monthly payments, subsequent payments
would be due on the first of each succeeding month.
3. Five-Year Monthly Payment. 60 equal
monthly payments. If you are establishing an Account as a new enrollment that is
permitted outside of an Enrollment Period, the first payment
4. Extended Monthly Payment. Equal monthly
is due on the first of the month on or before 60 days after
payments made through December of the year before
the Prepaid College Trust has received and accepted the
the Beneficiary’s PEY or year of Initial Benefit Eligibility.
application or work in good order to cover any subsequent
documents that could be required.
At any time, you may elect to make a down payment of at
least 25% of the payoff amount and reduce the amount or If you are changing your payment option, the first payment is
number of subsequent payments. You must affirmatively due on the first of the month succeeding the change.
request that your future payment schedule be adjusted.
Fees. You may be charged fees in amounts we determine,
You may also make payments in advance or pay your Account including Operating Expenses, late fees, fees for changes,
in full at any time. Payments made in advance will be applied and other administrative fees imposed by us. These fees
to your outstanding fees due first and then pay ahead your are set forth in the Schedule of Fees in the Disclosure
contract balance. We may also approve other payment Statement, of which this Contract is a part. We may, in our
schedules in our sole discretion. sole discretion, change the fees associated with a particular
transaction from time to time. Late fees are assessed on all
You may change the payment option at any time upon
payments if not received within ten (10) days of the due date.
written request, subject to any administrative fees.
Restrictions may apply. In the event you are due a refund Recontributions. If money is distributed from the Prepaid
for overpayment on this Contract, upon authorization of the Trust to pay for Qualified Higher Education Expenses and the
Account Holder, we will refund any overpayment. We will Beneficiary receives a refund from the Eligible Educational
not, however, refund any earnings on an overpayment. See Institution, the amount of the refund, or the amount
Article VI – Rollovers and Refunds. distributed by the Prepaid Trust, whichever is less, may be
re-contributed within 60 days of the date of the refund.
Payment Method. Payments can be made by check, money
order, electronic funds transfer on either an automatic or Rollovers of Assets from Another Qualified Tuition
one-time basis. All payments must be made in U.S. dollars; Program. You can transfer assets for the same Beneficiary
checks must be drawn on U.S. banks. If you make a payment from another Qualified Tuition Program to the Prepaid
by check, money order, or electronic funds transfer, we College Trust.
reserve the right, subject to applicable law, to restrict refund
This type of transfer is commonly referred to as a rollover.
or distribution of that payment from your Account for up
Rollovers for the same Beneficiary are restricted to one
to 10 days after the funds are deposited. You may change
every 12 months. The Account Holder and/or the previous
payment methods at any time by logging into your online
Qualified Tuition Program must provide the Prepaid College
Account. We may also approve other payment methods in
Trust with an accurate allocation of principal and earnings
our sole discretion.
on the previous account for application to the new Account,
Electronic Payment Cancellation. We will cancel any otherwise the entire rollover contribution will be treated
electronic payment upon receiving notice from our bank of an as earnings.
invalid bank account.
MARYLAND529.COM 7 888.4MD.GRADTo roll over assets into an Account in the Prepaid College be involuntarily downgraded/canceled for lack of
Trust, visit our website to complete an authorization to allow payment and a delinquency involuntary downgrade
us to initiate a rollover with your current Qualified Tuition notification may be sent.
Plan on your behalf.
Annual Statements. During the first quarter of each calendar
Priority of Payments. Your payments will be applied to your
year, you will receive an Annual Statement of Account for
Account in the following order: fees then principal.
each Account which had activity during the prior year. The
Missed Payments. We reserve the right to downgrade or Annual Statement will show your payments and any Benefits
terminate an Account for missed payments and fees will be that have been paid on the Account. You have 60 days after
assessed and are the responsibility of the Account Holder. receiving an Annual Statement to inform us if any information
in the Annual Statement is incorrect. After 60 days, we will
Payments are due on the first of the month. Late fees will
consider the information in the Annual Statement to be correct
be assessed if no payment has been received within ten (10)
and binding upon you and your Beneficiary.
days after a due date.
Confirmations. You will also receive a confirmation each
If an initial payment is missed and no payments are received
time you establish or change an automatic contribution. You
for a newly opened Account, there will be 30, 60, and 90-day
have 60 days after receiving a confirmation to inform us if any
email notifications (along with the associated monthly fees)
information in the confirmation is incorrect. After 60 days, we
before a contract is involuntarily canceled and notification is
will consider the information in the confirmation to be correct
sent to the Account Holder.
and binding upon you and your Beneficiary.
If an Account has had prior payments, but a payment is
missed, there will be 30, 60, 90, 120, and 150-day email
notifications (along with the associated monthly fees) before Article V Benefits
a contract is involuntarily downgraded or canceled and
Benefits must be used to pay for a normal full-time (or half-
notification is sent to the Account Holder.
time, as described below) course load for the number of
• Automatic Downgrades. In situations where an semesters or years of undergraduate education specified in
Account is 180 days delinquent, the Account will be the Tuition plan you select and pay for under this Contract.
automatically downgraded within the same plan type In order to receive Benefits, your Beneficiary must be
(Community College or University, with 2 + 2 plans enrolled at least half-time at the Eligible Institution. You
falling to the Community College plan type). If there is can start using Benefits beginning with fall semester of the
no downgrade option within the plan type, the Account PEY you have purchased, as identified on your enrollment
will be involuntarily canceled and the Account Holder confirmation and Participation and Payment Schedule. Please
will have 90 days to reinstate the Account by bringing review this benefit section in full to understand the minimum
all overdue payments current along with payment of any and maximum benefit available under your Contract.
fees incurred.
Benefits Payable:
• Late & Delinquency Schedule
1. Maryland Public College: If your Beneficiary enrolls
− 30 days and no payment made by the 10th of the in a four-year Maryland Public College as a full-time
month, a late fee may be assessed. student, the Prepaid College Trust will pay the full
− 60 days and no payment made by the 10th of the in-state Tuition for a University Plan or the full in-county
month, a late fee may be assessed and if it is the first Tuition if your Beneficiary enrolls in a two-year Maryland
payment due for the plan, an involuntary cancellation Public College (community college) for a Community
warning notification may be sent. College Plan.
− 90 days and no payment made by the 10th of the
2. Private or Out-of-State: If your Beneficiary enrolls in
month, a late fee may be assessed. If it is the first
an Eligible Institution that is private or out-of-state as a
payment due for the plan, the Account may be
full-time student, the Prepaid College Trust will pay the
involuntarily canceled for lack of payment and a
actual Tuition each semester (or the equivalent) up to a
delinquency involuntary cancellation notification may
maximum of one half of the Weighted Average Tuition in
be sent.
the tuition plan you purchased or your Minimum Benefit,
− 120 days and no payment made by the 10th of the
whichever is greater.
month, a late fee may be assessed.
− 150 days and no payment made by the 10th of the Note: If your Tuition for the private or out-of-state
month, a late fee may be assessed and an involuntary Eligible Institution is less than the Weighted Average
downgrade/cancelation warning notification may Tuition, you will only receive the Tuition. If Tuition is less
be sent. than your Minimum Benefit, however, you may submit
− 180 days and no payment made by the 10th of the documentation of Qualified Higher Education Expenses
month, a late fee will be assessed, the Account may and receive reimbursement up to your Minimum Benefit.
MARYLAND529.COM 8 888.4MD.GRADBenefits are paid on a semester by semester basis (or the Notwithstanding any other provision of this Contract, in the
equivalent applicable to a particular Eligible Institution). All event that Tuition at an Eligible Institution is less than your
annual figures are to be divided across semesters (or the Minimum Benefits, you may use the difference between the
equivalent applicable to a particular Eligible Institution). actual Tuition and your Minimum Benefit for other Qualified
Higher Education Expenses such as room and board
Minimum Maturity. This Contract must be in effect for at
or books.
least three years before Benefits will be paid. Benefits will
be paid no earlier than the first fall academic semester of Half-Time Benefits. In order to receive Benefits, your
the Initial Benefit Eligibility year at an Eligible Institution Beneficiary must be enrolled at least half-time at the Eligible
following the three-year anniversary of the effective date Institution. Half-time is defined as at least one-half of the
of your Contract. minimum number of credits necessary to be considered a
full-time student by the Eligible Institution. If your Beneficiary
Maximum Benefits. The Prepaid College Trust will not
attends a Maryland Public College, the Prepaid College Trust
pay for more than 15 credit hours for each semester (or the
will pay one-half of the normal full-time in-state Tuition for a
equivalent applicable to a particular institution). Under no
University Plan (or in-county Tuition for a Community College
circumstances will the Prepaid College Trust pay for more
Plan) or the actual Tuition charged by the Eligible Institution
than two semesters of Mandatory Fees (or the equivalent) for
to the student, whichever is less.
each year of Benefits purchased for a Beneficiary, with the
exception of the Minimum Benefits calculation. If a student attends an Eligible Institution that is private or
out- of-state, the Prepaid College Trust will pay one-half of
If Tuition or other Qualified Higher Education Expenses are
the Benefit for a full-time student per semester or the actual
more than the Benefits paid by the Prepaid College Trust,
Tuition charged by the Eligible Institution to the student,
you are or your Beneficiary is responsible for the difference.
whichever is less. If the Prepaid College Trust’s payment
Minimum Benefits. Minimum Benefits are defined as does not cover the entire Tuition cost to the student, you are
payments duly made under this Contract, minus Operating or your Beneficiary is responsible for the difference.
Expenses, plus a certain rate of return.
Multiple Institution Enrollment. A Beneficiary may enroll
in multiple institutions to meet the minimum criteria for
Accounts in existence on October 31, 2021:
using Benefits. All required documentation must be
• For Accounts in existence on October 31, 2021, submitted together in good order to be accepted. Please
contributions in your Account prior to November 1, 2021 call 888.4MD.GRAD (463.4723), prompt #2, for specific
will earn 6% on balances, compounded monthly, until instructions and documentation required for the payment
benefits are withdrawn, or your Contract is terminated. of Benefits for a multiple institution enrollment. Any
Benefit received for this type of enrollment cannot exceed
• Contributions made on or after November 1, 2021 will
the Benefit to which you are entitled under your Contract
accrue regular interest each year, compounded monthly, at
for a semester (or equivalent applicable to the particular
a rate equal to the 10-year Treasury note rate. The Treasury
Eligible Institutions).
note yield applicable to the Account contributions will be
updated annually with the June 30th number. Excess Benefits. Excess Benefits may occur if
• an Account Holder elects not to fully use Benefits
The yield for the 10-year Treasury note will be sourced
for a semester for which they are otherwise eligible;
from the Board of Governors of the Federal Reserve System
• if a University Plan is used to pay Community
(US), 10-Year Treasury Constant Maturity Rate (DGS10),
College Tuition;
as retrieved from FRED, Federal Reserve Bank of St. Louis
• In the case of a Scholarship, grant, or tuition remission; or
(fred.stlouisfed.org/series/DGS10).
• If a Beneficiary graduates early from college.
Accounts opened on or after November 1, 2021:
Excess Benefits can be applied toward future Tuition, provided
• Contributions to Accounts opened on or after Benefits are used within the maximum time limit allowed.
November 1, 2021 will accrue regular interest each year, Excess Benefits may also be used to pay for Qualified Higher
compounded monthly, at a rate equal to the 10-year Education Expenses, in which case the Prepaid College Trust
Treasury note rate. The Treasury note yield applicable to will pay the amount it would have otherwise paid to the Eligible
the Account contributions will be updated annually with Institution, or the actual cost of the Qualified Higher Education
the June 30th number. Expenses, whichever is less. Finally, Excess Benefits are
available for a Refund in accordance with Article VI.
The yield for the 10-year Treasury note will be sourced
Graduate Benefits. In order to use Excess Benefits to
from the Board of Governors of the Federal Reserve System
pay for graduate school, the Beneficiary must be enrolled
(US), 10-Year Treasury Constant Maturity Rate (DGS10),
at an Eligible Institution, taking at least one graduate level
as retrieved from FRED, Federal Reserve Bank of St. Louis
course as part of a graduate degree program. If you elect
(fred.stlouisfed.org/series/DGS10).
MARYLAND529.COM 9 888.4MD.GRADto have graduate Benefits paid, they will be based on the Some examples of common conversions are:
Weighted Average Tuition of the Maryland Public Colleges
• 1-Year University Plan to 2-Year Community College Plan;
in the Tuition plan selected and will be processed through
• 1- Year Community College Plan to a 1-Semester
a refund request. You may use up to the entire amount of
University Plan;
Excess Benefits towards the actual Tuition charged by the
• 2-Year Community College Plan to a 1-Year University Plan;
Eligible Institution, but will be limited by a maximum of two
• 2-Year Community College/2-Year University Plan
semesters per Academic Year. The Beneficiary will have to
to a 3-Year University Plan.
request a refund to get the Excess Benefits in one semester.
Requesting Benefits. Only the Account Holder (or the Calculations. We may develop other methods for the calculation
Custodian, if applicable) may request Benefits, or Excess of Benefits payable under Contracts if we determine that it is
Benefits, unless a valid court order directs the Trust necessary to provide consistent Benefits. No such changes may
otherwise. Except for Excess Benefits, no more than one adversely alter the fundamental rights and obligations of the
semester (or the equivalent for the particular Eligible parties to this Contract, except to the extent necessary to assure
Institution) of Benefits may be used for a Beneficiary in any compliance with applicable state or federal laws or regulations
semester (or applicable equivalent). or to preserve favorable tax treatment to you, your Beneficiary,
Maryland 529, or the Prepaid College Trust.
To claim Benefits, or Excess Benefits, an Account Holder
should submit an online request and must include the Time Limits. The Beneficiary has the number of years
associated invoice information and documentation. Benefit purchased in the Account plus 10 years to use all Benefits,
payments are paid to the recipient indicated in the benefit (Benefits period). This time can be extended for any active
claim request and are paid in U.S. dollars. Benefit claims service in the U.S. military. Absent a waiver, failure of the
payments via check will be sent first class U.S. Mail. Beneficiary to use all Benefits within the designated time
period will be deemed a decision by the Beneficiary not to
When requesting benefits for a foreign school the Prepaid
attend an Eligible Institution and will result in the termination
College Trust will need an itemized billing statement in U.S.
of the Account, pursuant to the provisions of Article VIII. In
Dollars. Other than to Eligible Institutions located outside of
addition to the requirements of this Article, we may request
the U.S., payments will not be made to non-U.S. Addresses.
other information and/or modify or apply specific due dates.
Non-Credit Courses. Any non-credit course taken by a
Beneficiary will be considered to be part of the normal full-time
or part-time course load covered by the Benefits payable under Article VI Rollovers and Refunds
this Contract. No additional full or partial years of Benefits will Rollovers Generally. Funds in a 529 account can be transferred
accrue to a Beneficiary in the event that non-credit courses are to and from Qualified Tuition Programs for the same beneficiary.
included in any of the Benefits payable under this Contract. Such transfers are known as rollovers. Rollovers for the same
beneficiary are restricted to once per 12-month period. The
Summer Courses/Winter Courses. In order to use Benefits
Account Holder and/or the Qualified Tuition Program distributing
for summer/winter term courses, you must have Excess
assets to another program must provide the receiving program
Benefits and your Beneficiary must be enrolled on at least
with an accurate allocation of principal and earnings from the
a half-time basis as defined by the Eligible Institution.
previous account; otherwise, the receiving program is required
Certificate Programs. Certificate or non-degree granting by the IRS to treat the entire rollover contribution as earnings.
programs are not eligible for Benefits.
Earnings Attributable for Rollovers and Refunds
Selected Eligible Educational Institution Not Covered
Accounts in existence on October 31, 2021:
by Tuition Plan. If the Beneficiary enrolls at an Eligible
Institution that is different from the tuition plan for your • For Accounts in existence on October 31, 2021,
Account, your Benefit will equal the Weighted Average contributions in your Account prior to November 1, 2021
Tuition of your current tuition plan or your Minimum Benefit, will earn 6% on balances, compounded monthly, until
which ever is greater. Any remaining Benefit for the benefits are withdrawn, or your Contract is terminated.
Academic semester will become an Excess Benefit.
• Contributions made on or after November 1, 2021 will
Contract Conversion. Prior to using any Benefits, you accrue regular interest each year, compounded monthly, at
may convert your Contract to a different tuition plan. To a rate equal to the 10-year Treasury note rate. The Treasury
convert your Contract, you must submit the appropriate note yield applicable to the Account contributions will be
authorization request and pay any required fees. As a result updated annually with the June 30th number.
of the conversion, we will revalue the Contract, and you may
be required to make additional payments or you may receive The yield for the 10-year Treasury note will be sourced
a refund for any resulting overpayment. Please be advised from the Board of Governors of the Federal Reserve System
that a conversion may have tax consequences. Please consult (US), 10-Year Treasury Constant Maturity Rate (DGS10),
with your tax professional for specific details. as retrieved from FRED, Federal Reserve Bank of St. Louis
(fred.stlouisfed.org/series/DGS10).
MARYLAND529.COM 10 888.4MD.GRADAccounts opened on or after November 1, 2021: Qualified Tuition Program to an ABLE account take place by
December 31, 2025.
• Contributions to Accounts opened on or after
November 1, 2021 will accrue regular interest each year, Refund. Refunds are only given at your authorization under
compounded monthly, at a rate equal to the 10-year the following circumstances:
Treasury note rate. The Treasury note yield applicable to
• Death or Disability of the Beneficiary.
the Account contributions will be updated annually with
the June 30th number. 1. Beneficiary Enrolled at Eligible Institution. The refund
will be the amount that would have otherwise been paid
The yield for the 10-year Treasury note will be sourced directly to the Eligible Institution, less any Benefits used.
from the Board of Governors of the Federal Reserve System
2. Beneficiary Not Enrolled at Eligible Institution. If
(US), 10-Year Treasury Constant Maturity Rate [DGS10],
the Beneficiary has not started receiving Benefits
as retrieved from FRED, Federal Reserve Bank of St. Louis
and a Disability occurs, the refund will be equal to the
(fred.stlouisfed.org/series/DGS10).
Minimum Benefit calculation for the contract.
Rollovers from Another Qualified Tuition Program.
See Article IV, Contract Payments. • Scholarship, Grant or Tuition Remission. The refund
will be up to the amount that would have otherwise been
Rollovers to Another Qualified Tuition Program. Upon
paid directly to the Eligible Institution.
notification in writing, you may transfer your Account to
another Qualified Tuition Program. Based on IRS regulations,
Added-tax Refund. Refunds are given under all other
rollovers for the same Beneficiary are restricted to one time
circumstances. The refunds discussed below are subject to
in a 12-month period.
a federal surtax required by the Code that is equal to 10% of
• A Contract in existence for less than three years the earnings portion of a Non-Qualified Distribution that is
as measured from the first payment due date. not due to the Beneficiary’s death, Disability, attendance at a
The transferable amount will equal the actual payments U.S. military academy, or receipt of a Scholarship.
made to the Prepaid College Trust plus 50% of the Earnings
• A Contract in existence for less than three years
as applied to the contract payments, less Operating
as measured from the first payment due date. The
Expenses, outstanding fees, and any Benefits used.
refund will equal the actual payments made plus 50% of the
• A Contract in existence for three years or more as Earnings as applied to the contract payments, less Operating
measured from the first payment due date. The Expenses, outstanding fees, and any Benefits used. The
transferable amount will equal the actual payments reduced Earnings applicable to Accounts in existence for
made to the Prepaid College Trust plus 100% of the less than three years is a financial penalty assessed by the
Earnings applied to the contract payments, less Operating program in order to maintain the actual soundness of the
Expenses, outstanding fees, and any Benefits used. Prepaid College Trust.
• Transfers within Maryland 529. The transferable amount • A Contract in existence for three years or more
for transfers from the Prepaid College Trust to the Maryland as measured from the first payment due date. The refund
College Investment Plan will equal the actual payments will equal the actual payments made plus 100% of the
made to the Prepaid College Trust plus 100% of the Earnings applied to the contract payments, less Operating
Earnings applied to the contract payments, less Operating Expenses, outstanding fees, and any Benefits used.
Expenses, outstanding fees, and any Benefits used,
regardless of how long the Contract has been in effect. Excess Benefits Available for Refund. At your
authorization, Excess Benefits in an Account will be
Rollovers to a Qualified Achieving a Better Life refunded in accordance with this Article VI.
Experience (“ABLE”) Program. Upon notification in
Board’s Right to Delay. In order to preserve the actuarial
writing, you may transfer your Account to a qualified ABLE
soundness of the Prepaid College Trust, we reserve the right
Program established pursuant to Section 529A of the
to delay a rollover or refund for a period of time not to exceed
Internal Revenue Code allowing Eligible Individuals to save
one year. To date, we have not delayed any refunds.
for Qualified Disability Expenses. Based on IRS regulations,
rollovers for the same Beneficiary are restricted to one time in
a 12-month period. The amount of the Rollover to a qualified
ABLE program will equal the actual payments made to the
Prepaid College Trust plus 100% of the Earnings applied to
the contract payments, less Operating Expenses, outstanding
fees, and any Benefits used, regardless of how long the
Contract has been in effect. Please note that the receiving
ABLE account is subject to an annual contribution limit,
currently $15,000. Federal law requires that rollovers from a
MARYLAND529.COM 11 888.4MD.GRADArticle VII Substitutions appropriate court order. If you transfer control of an Account
to a new Account Holder, the new Account Holder must agree
General. A change in Beneficiary, Account Holder, or
to be bound by the terms and conditions of this Contract and
Custodian is effective only when all required documents are
provide all necessary identification information. Transferring
received in good order and processed. A Beneficiary change
an Account to a new Account Holder may have significant tax
or transfer of assets may be denied or be limited if it causes
consequences. Before doing so you should consult with your
one or more Accounts in the Prepaid College Trust or the
tax professional regarding your particular tax situation.
Maryland College Investment Plan to exceed the maximum
aggregate allowable Account balance for a Beneficiary. Removing or Changing a Custodian on Accounts not
funded from an UGMA/UTMA. The Custodian will no
New Beneficiary. Provided that at least one semester of
longer have the authority to act on an Account once the
Benefits remains on your Account, the Beneficiary may be
Account Holder reaches the age of majority under Maryland
changed or the assets transferred for the Benefits remaining
law. Prior to the Account Holder reaching the age of majority,
on your Account, unless the Account has been funded
the Custodian may be changed at any time upon providing us
with the proceeds from an UGMA/UTMA and the current
with notice. The notice must be from the current Custodian
Beneficiary has not reached the age of majority. To avoid
or include a valid court order appointing another person as
negative tax consequences, the new Beneficiary must be a
Custodian. If the current Custodian dies or is declared legally
Member of the Family of the original Beneficiary.
incompetent prior to the Account Holder reaching the age of
For purposes of changing the Beneficiary of an Account which majority, then the person legally authorized to act on behalf
has paid out prior Benefits, the new Beneficiary's PEY must of the minor Account Holder must appoint a new Custodian.
fall within the benefit period of the original Beneficiary. If the
Prior to acting on the Account, we will require documentation
new Beneficiary's PEY falls outside of the beneficiary period of
from new Account Holders and/or Custodians to certify that they
the original Beneficiary, a new application must be submitted
agree to the terms and conditions of the Prepaid College Trust.
for the new Beneficiary and the assets of the current Account
may be rolled over to the new Beneficiary's Account. Removing or Changing a Custodian on Accounts
funded from an UGMA/UTMA. We must be notified by the
Upon requesting a change of Beneficiary, we will calculate a new
Custodian when the Account Holder reaches the applicable
payment amount given the change, if any, in PEY. As a condition
age of majority under the terms and conditions of the original
of such Beneficiary change, you are required to pay any required
UGMA/ UTMA account (under Maryland law, currently 18
additional costs, i.e. the difference in contract pricing from
years old for an UGMA and 21 years old for an UTMA). A
the original Beneficiary to the new Beneficiary. If the resulting
valid court order may also be submitted that stipulates the
change means you have overpaid, the excess funds can be:
removal of the Custodian. The Custodian may be changed
1. transferred to another Member of the Family of the at any time upon providing us with notice. The notice must
original Beneficiary; be from the current Custodian or include a valid court order
2. transferred to another qualified tuition program; or appointing another person as Custodian. If the current
3. refunded, in which case the applicable refund terms Custodian dies or is declared legally incompetent, then
found in Article VI will apply. the person legally authorized to act on behalf of the minor
Account Holder must appoint a new Custodian.
All Beneficiary changes must be requested and include all
Prior to acting on the Account, we will require documentation
required documentation. If the new Beneficiary is not already
from new Account Holders and/or Custodians to certify that they
enrolled in the Prepaid College Trust, all required identification
agree to the terms and conditions of the Prepaid College Trust.
information must be provided. If you change the Beneficiary,
all terms and conditions of this Contract continue to apply,
even though the original Beneficiary has been changed, Article VIII Termination
provided that the new PEY for the new Beneficiary falls
Termination. You can terminate this Contract upon
within the time period allowed for the original Beneficiary and
notice to us and receive a refund. Upon receipt of such
contract pricing for the new Beneficiary was available at the
notice, we will determine the amount of any refund pursuant
opening of the original contract.
to the terms of this Contract. There are tax consequences
New Account Holder. You may transfer control of the associated with a decision to terminate your Account. You
Contract to a new Account Holder unless the Account has been should consult with your tax professional regarding the tax
funded with the proceeds from an UGMA/UTMA account. All consequences of terminating your Account. See Key Federal
transfers must be requested in writing and include all required Tax Issues and Key State Tax Issues on pages 20 and 22,
information. However, your right of control may not be sold, respectively, of the Disclosure Statement.
transferred, used as collateral, or pledged or exchanged for
This Contract will terminate 10 years after your PEY plus
money or anything of value. We may require affidavits or other
the number of years purchased in the Contract (termination
evidence to establish that such a transfer is non-financial in
date). This time can be extended for any active service in the
nature. Your right of control may also be transferred under an
U.S. military. Upon termination, you will have the option to:
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