Managing employer-sponsored CollegeAmerica® accounts
Get the information you need to change employer-sponsored CollegeAmerica beneficiaries, owners and successor owners.
Change a beneficiary
Yes, but to avoid federal income tax and a 10% federal tax penalty on earnings, the new beneficiary must be a member of the same family as the previous beneficiary. Transfers made to family members are non-reportable and nontaxable events.
Generally, the following individuals are considered to be members of the family:
- A son or daughter, or a descendant of either
- A stepson or stepdaughter
- A brother, sister, stepbrother, stepsister, half brother or half sister
- A father or mother, or ancestor of either
- A stepfather or stepmother
- A brother or sister of the father or mother
- A son or daughter of a brother or sister
- A son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law or sister-in-law
- The beneficiary’s spouse, or the spouse of any individuals described above
- A first cousin of the beneficiary
Note: A legally adopted child is treated as the child of the adoptive parent as if by blood.
A beneficiary change can be made only if the contribution limit has not been exceeded.
A $550,000-per-beneficiary contribution limit applies across all plans administered by Commonwealth Savers, including CollegeAmerica, Invest529® (including Tuition Track Portfolio) and existing Prepaid529SM and CollegeWealth® accounts.
If the total value of the account falls below $550,000 for any reason, additional contributions can be made.
Complete the CollegeAmerica Account Change Request.
Yes, submit a CollegeAmerica Account Change Request along with the CollegeAmerica Distribution Request. Submit the 2 forms together to expedite the requests. Allow up to 5 business days for processing both requests.
Change an owner
Account owners of an employer-sponsored CollegeAmerica account must:
- Be an employee of the plan sponsor
- Receive compensation from the employer. Volunteers or members of organizations are not eligible to participate.
- Be a U.S. citizen or a legal U.S. resident
- Be of legal age to own securities (18 years old in most states)
The owner and beneficiary can be the same person.
Note: Trusts, entities or Uniform Gifts to Minors Act/Uniform Transfers to Minors Act registrations are not allowed on employer-sponsored plans.
No, joint ownership is not permitted.
Change a successor owner
An employer-sponsored CollegeAmerica account successor owner:
- Must be a U.S. citizen or a legal U.S. resident
- Must be of legal age to own securities (18 years old in most states)
- May be the same person as the beneficiary
Complete the CollegeAmerica Account Change Request. Alternatively, your client may be able to make the change by logging in to their account on the investor website.
Yes, a contingent successor owner can be added by the investor anytime by logging in to their account on the investor website. Contingent successor owners have the same eligibility requirements as successor owners.
A contingent successor owner can also be requested on the Employer-Sponsored CollegeAmerica Account Application or the CollegeAmerica Account Change Request.
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