529 Plan Disclosure & The CSPN Disclosure Principles Project
The College Savings Plans Network, the states which administer 529 plans, and their private sector partners in the financial services industry are firmly committed to clarifying and enhancing disclosure and offering materials for 529 plans. CSPN has worked with the Municipal Securities Rulemaking Board, the Financial Industry Regulatory Authority, and the Securities Exchange Commission in developing meaningful disclosure for investors. To that end, CSPN has adopted a detailed set of Disclosure Principles that provide enhanced comparability of information that investors should consider when determining which 529 plan best fits their investing goals and needs.
Every state and the District of Columbia have implemented these Disclosure Principles in their 529 plan offering materials. Statement #1 of the Principles provided unprecedented standards of disclosure for entities exempt from the registration and reporting requirements of the federal securities laws. Because the states and financial services firms are committed to ensuring the availability of the best information for investors, Statement #1 provided guidance on standards for summary information, risk factors, fees, federal and state tax information, performance data, sample tabular presentations and a host of other areas of disclosure.
Based upon feedback from the SEC, the MSRB, and others, the CSPN membership adopted Statement #2 to enhance and clarify certain disclosure matters related to the comparability of Section 529 plans to one another. For example, Statement #2 provides an enhancement of the table of contents or “locator” concept. Because many 529 plans provide disclosure through more than one document, the CSPN membership believed it important to ensure that each investor would be able to compare plans in an efficient manner. Having a global locator within a 529 plan’s offering materials has allowed investors to quickly find key disclosure items, such as fees and costs.
Following discussions with officials from the US Dept. of Treasury about the intended use of 529 plans, CSPN added anti-abuse language to the Disclosure Principles as part of Statement #3.
Disclosure Principles #4 provided for enhanced disclosures advising investors to periodically assess their investment choices and added provisions relating to format and distribution of Offering Materials.
Disclosure Principles #5 added language focused on consistent presentation of performance information across plans and included detailed example tables to assist plans in providing consistent performance information to investors.
Disclosure Principles #6 provides enhanced streamlining and clarity in how disclosures are provided to investors. Disclosure Principles #6 has been reorganized to make the Principles easier to understand and has been rewritten in plain English. A summary of these updates can be found here.
Disclosure Principles #7 were updated based on a review and analysis of the current state of disclosure, federal legislation (most notably the SECURE Act) and regulatory requirements and best practices of 529 plans.
CSPN and its members remain committed to providing clear, consistent and effective disclosure to account owners and prospective account owners. Here is a listing of each iteration of the Disclosure Principles and the date of approval by the network.
Disclosure Principles Statement No. 1 Adopted December 2, 2004 (Adobe PDF)
Disclosure Principles Statement No. 2 Adopted July 26, 2005 (Adobe PDF)
Disclosure Principles Statement No. 3 Adopted December 9, 2008 (Adobe PDF)
Disclosure Principles Statement No. 4 Adopted December 17, 2009 (Adobe PDF)
Disclosure Principles Statement No. 5 Adopted May 3, 2011 (Adobe PDF)
Disclosure Principles Statement No. 7 Adopted October 6, 2020