Bright Start Advisor Sold Consumer Brochure

ILLINOIS’ 529 COLLEGE SAVINGS PLAN
529 college savings plans are a great way for individuals
and families to make college more affordable. That’s
because money saved in a 529 plan has significant tax
advantages, is professionally managed and may benefit
from compounded growth.
Whether you are saving modest amounts each month in
a 529 plan, or incorporating it into your estate planning,
money in the account can be used to pay for qualified
higher education expenses, including tuition, room
and board, books, as well as other expenses.
By opening a Bright Start 529 account, you can take
a smart, pragmatic approach toward this important
goal. Bright Start is among the most affordable 529
plans in the country and offers a variety of world-class
investment options.
It’s never too early to start saving for a child’s college
education -- in fact, every day you don’t save is a
missed opportunity to do something great. Even
saving just a moderate amount every month can go
a long way toward avoiding a lifetime of college debt.
Today’s a good day to start saving with Bright Start
College Savings.
Today’s a good day.
VISIT BRIGHTSTARTADVISOR.COM TO LEARN MORE.
Start preparing today
for a brighter tomorrow.
Three Pillars of Paying for College
For the vast majority of families, paying for a child’s education
is rarely an all-or-nothing proposition. Because only a select few
students receive full scholarships, most families typically take a
three-pronged approach:
Savings
Financial
Aid
Student
Loans
The exact mix matters because it greatly influences the true cost
of college. Families who save even modest amounts early and
often can potentially reduce their out-of-pocket cost significantly
and help keep their children from a lifetime of debt.
3
Saving a little now can save
you a lot in the long run.
In the hypothetical example shown in the chart to
$120k
$115,752
$107,698
the right, a family who saves $190 a month in a
$60,000 out-of-pocket for a $100,000 education.
Meanwhile, the family who didn’t save paid nearly
$116,000 out-of-pocket for that same education.
The difference between these two approaches—
approximately $56,000—is dramatic and due to
Total out-of-pocket cost
529 plan for their child from birth to age 18 may pay
$87,940
$90k
$60,128
$60k
$41,040
$30k
$20,520
a few factors. First, a 529 plan gives your money
the opportunity to grow. Second, those who wait
typically rely more heavily on loans and are stuck
with the potentially significant added interest for
decades following graduation.
$100k Total
Estimated cost of
a 4-year college
education
$5,040
$0
0
$25
$95
$190
Monthly amount contributed to a tax-advantaged account*
Total out-of-pocket cost
Monthly amount contributed to a tax-advantaged account
Determining Financial Aid
Most families will receive some financial aid, but the exact
amount and form won’t be determined until the student
approaches college age. However, that doesn’t mean you
should delay planning and saving. Your financial advisor
can help you understand the many factors involved in
determining financial aid, including the potential benefits
of a 529 plan.
*The four scenarios show the out-of-pocket cost based on an estimated $100,000 4-year college education at a public university, (source: OppenheimerFunds
2015), and assume the receipt of approximately $25,000 in financial aid, which will vary depending upon how much parents save in a tax-advantaged
account. The loan portion of each column is calculated to include a fixed interest rate of 6.25% to be repaid over 180 months (as defined by Sallie Mae)
following graduation with 54 monthly payments of $25 made during college. All savings in the tax-advantaged account depicted in this chart assume 5%
monthly compounded growth from the beneficiary’s birth until age 18.
The hypothetical examples are for illustrative purposes only and do not predict or depict the performance of any specific investment. Actual results may vary.
Systematic investing does not assure a profit and does not protect against loss in declining markets. Before investing, investors should read the
Program Disclosure Statement and evaluate their long-term financial ability to participate in such a plan.
4
Tax Benefits: Another Way to Save
Money you invest in a 529 college savings plan may grow at a faster pace than if it were invested the same way in
a taxable account. That’s because the money you save has the potential to grow tax-free for the life of the account.
Rather than paying taxes on any investment gains, you can keep your earnings in the account so they have the
potential to grow even more. Over time, your money may benefit from compounded growth, which means your
earnings may generate additional earnings, potentially multiplying the impact of the money you save.
The Benefits of Tax-Free Growth*
$30,000
Exclusively for Illinois residents
In addition to federal tax benefits, Illinois
residents enjoy state tax benefits through
Bright Start.
Y
ou can deduct contributions of up to
$20,000
$10,000 ($20,000 if married and filing
jointly) per year from Illinois state taxable
income. That includes the contributions
(but not earnings) portion of rollovers from
other state 529 plans.1
$10,000
E
arnings accumulate tax-free for the
life of the account and are exempt from
0
3
6
9
12
15
18
Years
Illinois state tax as long as they are used
for qualified higher education expenses.2
Tax-advantaged (Tax-free) Account $24,066
Taxable Savings Account $18,096
*This hypothetical illustration assumes an initial investment of $10,000 and a 5% annual rate of return. The taxable account assumes a 28% federal
and a 5% state tax rate. (Please check with your tax advisor to learn if this applies to your state of residence.) The illustration does not represent
the performance of any specific account or investment and does not reflect any plan fees or sales charges that may apply. If such fees or sales charges
had been taken into account, returns would have been lower.
Important Tax Considerations for All 529 Plans
Residents of several other states may also be eligible for a state tax deduction from their own state when investing
in Bright Start regardless of where their student plans to go to school.
However, some states provide favorable tax treatment to their residents only if they invest in the state’s own plan.
Before investing, you should consider whether your, or your beneficiary’s, home state offers any state
tax or other benefits available only for investm ents in that state’s 529 college savings program. Consult
your tax advisor for additional guidance.
1 Based on informal guidance from the Illinois Department of Revenue that is not binding on the Department.
2
The amount of any deduction previously taken for Illinois individual income tax purposes is subject to recapture if such assets are rolled over to a
non-Illinois 529 plan.
5
8 More Reasons to Open a Bright Start
College Savings Account
3
Bright Start offers a number of advantages that make it easier to save money,
grow assets and pay for a child’s higher education.
1 - Low Fees Put More of Your Money to Work for You
6 - High Account Balance Limits The combined
Bright Start is among the nation’s most affordable 529
account balance per beneficiary for Bright Start and all
plans, which means that more of your money goes toward
other Illinois 529 programs may be as high as $400,000.
your investment goals, not the plan’s operating costs.4
Once this limit is reached, earnings can continue to
2 - Pay for Tuition, Room, Board and Books
accrue, but new contributions will not be allowed.
Withdrawals can be used to pay for qualified educational
7 - Gift and Estate Tax Benefits You can contribute
expenses, including tuition, fees, books, supplies and
up to $14,000 ($28,000 for married couples) annually,
room and board .
per beneficiary, or up to $70,000 ($140,000 for married
5
3 - Extensive School Choice You can use your Bright Start
savings at most accredited public and private institutions
in the U.S., as well as some foreign institutions.
4 - Broad Eligibility Any U.S. resident, regardless of
income or state residency, can open an account. Parents,
grandparents, aunts and uncles and even family friends
are eligible to contribute to your account.
couples) prorated over a five-year period—without having
to pay gift taxes. In addition, contributions are excluded
from the account owner’s estate when taxes are assessed,
making Bright Start an attractive option for grandparents6.
8 - Control Your Savings Bright Start assets remain in
your name for the life of the account. If your beneficiary
does not pursue a college education, you may change
the beneficiary to another qualified family member
5 - Low Minimum Contributions You can open an
account with an initial contribution as little as $25 and
make additional investments of $15 or more.
without penalty7. You can also leave the account to grow
for future use or make a non-qualified withdrawal (taxes
and a federal tax penalty may apply).
3This product is neither FDIC insured nor guaranteed and may lose value.
4 Please see the Program Disclosure Statement for more details.
5If the money is used for other purposes, the earnings portion of the withdrawal is subject to federal income taxes, any state income tax and may be subject
to a 10% federal tax penalty.
6If the account owner dies before the end of the five-year period, a prorated portion of the contribution allocable to the remaining years in the five-year
period, beginning with the year after the contributor’s death, will be included within his or her estate for federal estate tax purposes.
7There may be gift or generation-skipping tax consequences depending on who the new beneficiary is. See the Program Disclosure Statement for more
information.
7
6%
5%
25%
13%
Investment Options
4.5%
16%
Bright Start offers a range of portfolios and asset allocation strategies designed to help you and your financial advisor find
10.5%
the right fit for your savings goal, financial situation and risk tolerance. You may invest in the
Age-Based Portfolios, the
16%
Choice-Based Portfolios or a combination of the two.
You have the opportunity to change how your savings are allocated among investment options should your needs and
goals change. However, certain rules apply. You may adjust your allocations for money previously invested twice per
calendar year, and you may at any time allocate new contributions among any combination of available investment
6% by OppenheimerFunds, Inc., its affiliates
options. The portfolios’ investments are managed
and American
10%
5%
5%
Century Investments.
21%
5%
25%
13%
Age-Based Portfolios
10%
4.5%
16%
12%
4%
Your account is placed in one of six portfolios based on the beneficiary’s age. As your child grows older, the money in
10.5%
12%
the account automatically shifts from more aggressive portfolios seeking a higher degree
of growth to increasingly
10%
16%
conservative portfolios aimed at reduced volatility and capital preservation.
3.5% 7.5%
2%
2%
6%
5%
5%
10%
5%
25%
15%
21%
5%
13%
5%
10%
4.5%
16%
15%
3.5%
3.5% 7.5%
7%
3%
Advisor Age-Based
7–9 Years Portfolio
Advisor Age-Based
10–11 Years Portfolio
Seeks
5% long-term growth by
investing mostly in21%
equities.
As the child
the portfolio
15%gets older, 18%
still seeks growth, but the equity
5%
allocation
is decreased in an attempt
to
lower
overall portfolio volatility.
5%
Seeks moderate15%
growth
as equity
20% allocation continues
to decrease.
10%
10%
12%
15%
4%
3.5%
3.5% 7.5%
U.S. EQUITY
5%
15%
10%
8.5%
5%
5.5%
8.5%
15%
7%
3%
NON-U.S. EQUITY
OFIPI Rising Dividends Strategy
OFIPI Value Strategy
OFIPI Capital Appreciation Strategy
OFIPI Main Street Mid Cap Strategy
OFIPI Main 15%
Street Small Cap
Strategy
18%
5%
10%
8.5%
12%
10%
8
8.5%
Advisor Age-Based
0–6 Years Portfolio
10%
5%
10%
12%
10%
16%
10%
12%
4%
10.5%
18%
10%
10%
FIXED INCOME
Oppenheimer International Growth Fund
Oppenheimer Developing Markets Fund
MONEY MARKET
15% Money
Oppenheimer Institutional Government
American Century Diversified
Oppenheimer International Bond Fund
Oppenheimer Senior Floating Rate Fund
OFIPI Enhanced10%
Short Term9%
Gov’t Index Strategy
5%
Market Portfolio20%
5%
8.5%
10%
5%
7%
3%
3.5%
22%
4.5%
8.5%
5.5%
10%
20%
10%
5%
15%
21%
5%
15%
18%
20%
5%
8.5%
5%
10%
10%
12%
15%
4%
10%
10%
8.5%
5%
5.5%
12%
10%
3.5%
3.5% 7.5%
8.5%
15%
7%
3%
10%
15%
20%
5%
5%
10%
15%
10%
3.5%
8.5%
9%
5%
15%
18%
7%
3%
5%
8.5%
10%
3.5%
22%
4.5%
8.5%
5%
10%
5.5%
7%
15%
3%
20%
8%
7%
3%
3% 2% 1%
10%
15%
9%
15%
5%
20%
5%
8.5%
10%
3.5%
22%
5%
1.5%
5.5%
15%
7%
10%
Advisor Age-Based
12–14
Years Portfolio
9%
10%
5%
Seeks moderate growth
as equity and fixed income5%
allocations are equal.
3.5%
22%
10%
20%
Advisor Age-Based
15–17 Years Portfolio
Advisor Age-Based
18+ Years Portfolio
Seeks15%
conservative growth as
fixed income makes up the bulk of
the portfolio and a money market
15%
allocation is introduced.
Seeks capital preservation with
minimal growth by investing
primarily in fixed income and
money market investments to
help maintain stability.
4.5%
5%
45%
10%
45%
8%
2.5%
3%
15%
1.5%
4.5%
8.5%
5%
2%
1.5%
0.5%
20%
10%
8%
Experienced Investment Managers
15%
American Century Investments has built its investment
15%
management business on
the belief that it succeeds by
making others successful. This multi-disciplined, activelymanaged investment management firm offers diverse
5%
strategies for its clients.
45%
10%
Since its founding in 1960, OppenheimerFunds, Inc. has
become a leading financial services company, offering
investors comprehensive solutions through mutual
funds and other investment vehicles.
9
15%
25%
14%
10%
9%
4.5%
10%
9%
11.5%
19.5%
10%
6%
5%
25% 5%
14%
15%
19.5%
Choice-Based Portfolios
9%
7%
3%
4.5%
15%
10%
10%
9%
11.5%
5%your savings goals change, your
19.5%
With this approach, you and your financial advisor can customize your investment
options. As
5%
exact mix of investments can, too. You may choose one or more of the portfolios that best suit your
15% needs and, unlike Age10%
19.5%
7% portfolio.
15% allocation of Choice-Based 15%
Based Portfolios, the asset
Portfolios will not change unless you actively pick a different
3%
10%
30%
9%
10%
9%
6%
5%
35%
25%
14%
15%
5%
10%
10%
3%
15%
10%
10%
7%
4.5%
15%
30%
9%
10%
9%
11.5%
19.5%
35%
5%
19.5%
15%
15%
10%
5%
5%
10%
7%
2%
3%
30%
Advisor Equity
Portfolio
Advisor Balanced
Portfolio
Advisor Fixed Income
Portfolio
5%
15%appreciation
Seeks35%
long-term capital
10%
10%
by investing
all of its assets in
equity
9%
investments.
15%
Seeks moderate
growth by investing
in a balanced asset allocation weighted
95% investments
30% and
between equity
fixed income and money market
investments.
Seeks current income by investing
primarily in investment-grade bonds
and U.S. Government securities.
10%
10%
10%
9%
35%
5%
10%
5%
15%
5% 7%
95%
10%
U.S. EQUITY
3%
100%
5%
15%
OFIPI Rising Dividends Strategy
OFIPI Value Strategy
OFIPI Capital Appreciation Strategy
OFIPI Main Street Mid Cap Strategy
OFIPI Main Street Small Cap Strategy
NON-U.S. EQUITY
Oppenheimer International Growth Fund
Oppenheimer Developing Markets Fund
30%
95%
FIXED INCOME
100%
35%
10%
Advisor Conservative Fixed
10%
Income Portfolio
Advisor Money
95% Portfolio
Market
Seeks total return by investing
primarily in short-term
government securities.
Seeks preservation of capital
by investing all of its assets in a
money market mutual fund.
American Century Diversified
Oppenheimer International Bond Fund
Oppenheimer Senior Floating Rate Fund
OFIPI Enhanced Short Term Gov’t Index Strategy
MONEY MARKET
Oppenheimer Institutional
Government Money Market Portfolio
5%
100%
100%
11
A Portfolio may invest its assets in mutual funds, have its assets managed in a separate account by OFI Private Investments Inc. for the benefit
of the Bright Start Trust, or a combination of the two. Each underlying investment has its own risks. For example, the prices of small-cap
stocks are generally more volatile than large company stocks. There are special risks inherent to international investing, including currency,
political, social and economic risks. Investments in growth stocks may be more volatile than other securities. With value investing, if the
marketplace does not recognize that a security is undervalued, the expected price increase may not occur. Fixed income investing entails
credit and interest rate risks. When interest rates rise, bond prices generally fall, and the underlying fund’s or account’s value can fall. Senior
Loans are typically lower-rated and may be illiquid investments (which may not have a ready market). Diversification does not guarantee a
profit or protect against loss. For more details and associated risks, please see the Program Disclosure Statement.
The actual mix of assets in portfolios that invest in more than one underlying investment will vary over time due to market performance and
will be rebalanced at least quarterly to help maintain the portfolio’s target asset allocation. None of the portfolios are designed to provide any
particular total return over any particular time period or investment time horizon. Account owners own interests in a portfolio; they do not have
a direct beneficial interest in the separate accounts, mutual funds or other instruments held by that portfolio, and therefore, do not have the
rights of a shareholder or owner of those investments.
*You could lose money by investing in the Fund. Although the Fund seeks to preserve the value of your investment at $1.00 per
share, it cannot guarantee it will do so. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency. The Fund’s sponsor has no legal obligation to provide financial support to the Fund,
and you should not expect that the sponsor will provide financial support to the Fund at any time.
This material is provided for general and education purposes only, and is not intended to provide legal, tax or investment advice, or to
avoid penalties that may be imposed under U.S. federal tax laws. Clients should contact their own legal or tax advisors to learn more about
the rules that may affect individual situations.
The Bright Start® College Savings Program is administered by the State Treasurer of the State of Illinois and distributed by
OppenheimerFunds Distributor, Inc. OFI Private Investments Inc., a subsidiary of OppenheimerFunds, Inc., is the program
manager of the Plan. Some states offer favorable tax treatment to their residents only if they invest in the state’s own plan.
Investors should consider before investing whether their or their designated beneficiary’s home state offers any state tax or
other benefits that are only available for investments in such state’s qualified tuition program and should consult their tax
advisor.
These securities are neither FDIC insured nor guaranteed and may lose value. Before investing in the Plan, investors should
carefully consider the investment objectives, risks, charges and expenses associated with municipal fund securities. The
Program Disclosure Statement and Participation Agreement contain this and other information about the Plan, and may be
obtained by visiting brightstartadvisor.com or calling 1.877.43.BRIGHT (1.877.432.7444). Investors should read these documents
carefully before investing.
The Bright Start® College Savings Program is distributed by
OppenheimerFunds Distributor, Inc. Member FINRA, SIPC
225 Liberty Street, New York, NY 10281-1008
© 2016 OppenheimerFunds Distributor, Inc. All rights reserved.
IL0000.002.0916 September 2016
12
13
“I was taking a different look at the familiar… rather than adhering
to conventional wisdom.” – Leon Levy, founder, (the original) OppenheimerFunds
OppenheimerFunds
Invest with Proven Teams
Founded in 1959, OppenheimerFunds offer investment
portfolios in every major asset class through a variety of
vehicles including retirement and college saving plans.
We recognize the value of having experienced teams
who have managed assets through a variety of market
conditions. Our investment teams are led by some of
the most respected and successful managers in the
industry. They have long tenures with the firm. Our 13
investment teams have the independence to exercise
their expertise in the markets where they invest, but they
also work collaboratively, sharing ideas across teams so
that every decision is informed by multiple perspectives.
Our staff of 2,000 employees includes more than 160
investment professionals who are committed to serving
the needs of the individual and institutional investors
and financial advisors who entrust us as the stewards
of their capital.
The Right Way to Invest
We believe investors are best served by adhering to
four key principles that, in our view, constitute the Right
Way to Invest.
Make Global Connections
Throughout our history, we have been pioneers in
global stock and bond investing. Today, we are one
of the largest managers of global assets. We have
long experience with finding opportunities for investors
around the world.
Look to the Long Term
Our investment horizons are aligned with our clients’
interests. We invest for the long term because we know
investors are trying to meet long-term goals. We are
active managers because we believe our experience
and expertise seek to help investors realize their
financial goals.
Take Intelligent Risks
We understand that investment rewards only come with
risks, but we seek to understand and manage the risks
we assume. Our risk management team makes their
risk assessments with complete independence from our
investment staff, but they still evaluate risks at every
stage of our investment process.