DECEMBER 1, 2017
We are changing our policy regarding the conversion of 529 Class C shares, which are only available to CollegeAmerica investors.
Effective December 1, 2017, all eligible 529-C shares will automatically convert to 529-A shares in the month of the 10-year anniversary of the purchase date.
Due to the evolving financial industry landscape, including recent regulatory scrutiny, we believe it’s appropriate to modify our policy to be in line with the industry’s needs for consistency with various investment offerings. This change ultimately benefits 529-C shareholders, as they will incur lower 12b-1 expenses after conversion.
The changes affect all 529-C shares that have been held longer than 10 years. Please note that these conversions do not impact our existing non-529 C share policy, which automatically converts C shares to F-1 shares before the end of their 10-year anniversary month.
If you have questions or need additional details, please call (800) 421-0180.
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses, summary prospectuses and CollegeAmerica Program Description, which can be obtained from a financial professional and should be read carefully before investing. CollegeAmerica is distributed by American Funds Distributors, Inc. and sold through unaffiliated intermediaries.
Depending on your state of residence, there may be an in-state plan that provides state tax and other state benefits, such as financial aid, scholarship funds and protection from creditors, not available through CollegeAmerica. Before investing in any state's 529 plan, investors should consult a tax advisor.
If withdrawals from 529 plans are used for purposes other than qualified education expenses, the earnings will be subject to a 10% federal tax penalty in addition to federal and, if applicable, state income tax. State tax treatment of K-12 withdrawals varies. Please consult your tax advisor for state-specific details.
This content, developed by Capital Group, home of American Funds, should not be used as a primary basis for investment decisions and is not intended to serve as impartial investment or fiduciary advice.