Can I make contributions through direct deposit with my employer? If I do that, will my contributions be made pre-tax?
Yes, if your employer offers direct deposit, you can add your 529 account as a destination account by using the direct deposit form from your employer. Or, you can provide Fidelity's form (PDF) to your employer.
No, they are not pre-tax but they are deductible from Connecticut adjusted gross income in an amount not to exceed $5,000 for a single return or $10,000 for a joint return for that tax year. These limits apply on an aggregate basis (not a per beneficiary basis) to all contributions made to all CHET accounts during the tax year. Connecticut taxpayers may not claim a deduction for a rollover into a CHET account from a non-CHET account or for a transfer into a CHET account from a Coverdell education savings account.
I currently use payroll deduction to fund my CHET 529 account. Do I need to make any changes?
For Connecticut state employees or employees of a Connecticut company that uses payroll deduction, any payroll deductions you've set up have already been scheduled to stop for your January 29, 2021 paycheck; you do not need to contact the state or company payroll department.
Starting February 8, 2021, you will be able to activate your account with Fidelity and establish automatic contributions from your bank account (e.g., checking or savings account) through Fidelity. Payroll deduction will no longer be available.
Can I have part of my 2020 state tax return be deposited as a contribution into my CHET 529 account?
Yes, once your account has been activated at Fidelity, you can visit the CT Department of Revenue website for more information. You'll have to file by mail to take advantage of this option for the 2021 tax year. To establish direct deposit, you'll need your Fidelity direct deposit/direct debit routing numbers and account numbers.
If I already have direct deposit and/or regular contributions or distributions established, what steps do I need to take after my account transitions over to Fidelity?
Until the transition is complete, these activities will still occur through TIAA. After activating your account at Fidelity, you'll need to provide the appropriate third party (bank or employer receiving a payment) with Fidelity's routing number and your new account number.
I have my bank account on file at TIAA. Will this information move to Fidelity?
No, you will have the ability to add your bank information on Fidelity.com after you have activated your account.
If I granted someone authority to view or act on my CHET account at TIAA, what steps do I need to take to grant them authority at Fidelity?
Once you have activated your account at Fidelity, you will need to grant them trading authority or power of attorney. Visit the account access rights overview page for more information and instructions.
Your account investments
Will my assets be invested in the same portfolios as they are at TIAA?
No, your assets will be invested in the Fidelity portfolio that most closely aligns with your current investment goals.
What if I want to change how my assets will be invested after they move over to Fidelity?
You can, but per IRS rules, you can only change current investments twice in a calendar year—or if you change the beneficiary—without incurring taxes. If the investment instruction is on a new deposit, you can change that at any time.
For more information about making changes to current and future investments, read How to change your 529 plan's investment instructions.
Once my account has transitioned, what investment options are available to me?
The plan will offer access to our deep lineup of portfolio managers as well as 37 professionally managed portfolios, including:
- 24 age-based portfolios
- 6 static portfolios
- 6 individual fund portfolios
- 1 bank deposit portfolio
These options will allow you to balance your personal risk tolerance, time horizon, and savings goals.
What is the CHET Baby Scholars program, and will it still continue once the plan moves to Fidelity?
Yes, if you are currently enrolled in the Baby Scholars program, are having a baby, or adopting a child and would like to enroll, you'll still be able to do so as long as you meet the program criteria.
The CHET Baby Scholars program provides up to $250 for future college costs for Connecticut residents that have (1) babies less than a year old or (2) adopted children before the first anniversary of the adoption. Here's how it works:
- You must have or open a CHET account to be eligible.
- Once you open your account and enroll in CHET Baby Scholars, CHET will automatically deposit $100 into your account.
- If the account is opened with $150 (or more), the full $250 match will be triggered. If you open your account with less than $150, your account will be reviewed on a quarterly basis. Once an additional $150 in contributions is received into the account and before the child turns 4, an additional $150 match will be triggered. Any earnings growth will not be counted toward the $150; the full $150 must be actual contributions.
Why was Fidelity named the new program manager of the plan?
State Treasurer Shawn T. Wooden, CHET plan trustee, selected Fidelity to be the new program and investment manager for the CHET plan because of the experience we can provide to help Connecticut families reach their college savings goals.
What else can you tell me about Fidelity’s 529 plan portfolios and expenses?
With regard to expenses, there are no annual account fees or minimums required to open any of the Fidelity-managed 529 plan accounts. The fees charged are incorporated into the total expense ratio, including the program management fee which covers the cost of trust administration services (recordkeeping, statements, and customer service). Mutual fund fees are also included in the expense ratio. Each of the mutual funds that the portfolios invest in charges investment management fees and other expenses that vary by portfolio; the plans do not invest in any mutual fund with a sales charge or commission fee.
Expense ratios may vary by plan. You can find the range of expense ratios on the plan pages, in the account details section.
It's important to choose an investment mix that you'll be able to live with—one that won't keep you up at night when market volatility strikes. But it should also provide the potential for growth that will help you reach your goals. Historically, investors have balanced those needs by investing in age-based mutual fund portfolios that include a blend of stocks, bonds, and short-term investments that adjust over time to grow more conservative as a student nears college age.
For more about the investment options Fidelity offers, visit 529 plan investment options.
What makes Fidelity's 529 experience different?
We're able to provide CHET 529 plan participants with a robust set of guidance tools, educational materials, dedicated college planning representatives, and an extensive array of funds, in addition to over 70 years of deep investing experience. You'll also be able to take advantage of:
- A variety of flexible investment options: The CHET 529 plan will offer 37 professionally managed investment portfolios, including active, blend, index age-based, static allocation, and individual fund portfolios. With so many available choices, you can build and customize your CHET account in accordance with your personal savings goals.
- 24-hour account access and customer service: View and manage your account anytime at Fidelity.com. Should you need help, our dedicated customer service representatives are available Monday–Friday from 8 a.m.– 9 p.m. ET.
- Security & privacy: We leverage the latest technology and encryption to better protect your personal information and financial transactions.
But I'm happy with what I've got. What if I don't want to move my account? Why should I keep my CHET 529?
Besides the benefits we've already mentioned—such as our guidance tools and a wide range of investment options—we seek to add value in as many ways as we can. Some additional things you may want to consider include:
- Specialized college planning content on Fidelity.com: We cover the college planning journey from opening a 529 through to graduation, so you can plan for, react to, and anticipate the life moments that matter—including those that may impact your finances.
- Easy college gifting: Friends and family can easily contribute to your 529 account with a customized gifting page and private dashboard that you can edit, send invitations from, track gifts to, and more. We've even got online content to help everyone understand the importance of gifting and tips on how to ask for gifts to your 529 account.
Is gifting to a Fidelity 529 plan account allowed?
Gifting is both allowed and encouraged. Once you set up a college gifting dashboard on your account, you'll be able to share a link with your friends and family. They won't see any of your personal details, but they’ll be able to gift money electronically to your account. Visit the College gifting page to learn more.
The Connecticut Higher Education Trust (CHET) 529 College Savings Plan - Direct Plan is offered by the Treasurer of the state of Connecticut and managed by Fidelity Investments. If you or the designated beneficiary is not a Connecticut resident, you may want to consider, before investing, whether your state or the beneficiary's home state offers its residents a plan with alternate state tax advantages or other state benefits such as financial aid, scholarship funds and protection from creditors.
Units of the portfolios are municipal securities and may be subject to market volatility and fluctuation.
The third-party trademarks and service marks appearing herein are the property of their respective owners.
Fidelity does not provide legal or tax advice. The information herein is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact investment results. Fidelity cannot guarantee that the information herein is accurate, complete, or timely. Fidelity makes no warranties with regard to such information or results obtained by its use, and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Consult an attorney or tax professional regarding your specific situation.