53B-8a-107.  Program, administrative, and endowment funds — Investment and payments from funds — Proxy voting — State treasurer access.

(1)  The plan shall segregate money received by the plan into three funds, the program fund, the administrative fund, and the endowment fund.

Terms Used In Utah Code 53B-8a-107

  • Account agreement: means an agreement between an account owner and the Utah Educational Savings Plan entered into under this chapter. See Utah Code 53B-8a-102
  • Account owner: means a person, estate, or trust, if that person, estate, or trust has entered into an account agreement under this chapter to save for the higher education costs on behalf of a beneficiary. See Utah Code 53B-8a-102
  • Administrative fund: means the money used to administer the Utah Educational Savings Plan. See Utah Code 53B-8a-102.5
  • Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
  • Beneficiary: means the individual designated in an account agreement to benefit from the amount saved for higher education costs. See Utah Code 53B-8a-102
  • Board: means the board of directors of the Utah Educational Savings Plan, which is the Utah Board of Higher Education acting in the Utah Board of Higher Education's capacity as the Utah Higher Education Assistance Authority under Title 53B, Chapter 12, Higher Education Assistance Authority. See Utah Code 53B-8a-102.5
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Donor: The person who makes a gift.
  • Endowment fund: means the endowment fund established under Section 53B-8a-107, which is held as a separate fund within the Utah Educational Savings Plan. See Utah Code 53B-8a-102.5
  • Fiduciary: A trustee, executor, or administrator.
  • Gift: A voluntary transfer or conveyance of property without consideration, or for less than full and adequate consideration based on fair market value.
  • Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
  • Person: means :Utah Code 68-3-12.5
  • Plan: means the Utah Educational Savings Plan created in Section 53B-8a-103. See Utah Code 53B-8a-102
  • Program fund: means the program fund created under Section 53B-8a-107, which is held as a separate fund within the Utah Educational Savings Plan. See Utah Code 53B-8a-102.5
  • Proxy voting: The practice of allowing a legislator to cast a vote in committee for an absent legislator.
  • State: when applied to the different parts of the United States, includes a state, district, or territory of the United States. See Utah Code 68-3-12.5
(2)  The board shall:

(a)  invest the plan in a manner that is consistent with the prudent investor rule for trustees established in 9;

(b)  in accordance with the board’s fiduciary responsibilities, make investment decisions with the sole purpose of maximizing the risk-adjusted return on the investments; and

(c)  to the extent practicable:

(i) 

(A)  retain the right to vote investor proxies; or

(B)  if the investments are commingled with another investor’s funds, request the right to vote investor proxies; and

(ii)  ensure proxy voting is exercised to maximize risk-adjusted returns for the exclusive benefit of beneficiaries.

(3)  Transfers may be made from the program fund to the administrative fund to pay operating costs:

(a)  associated with administering the plan and as required under Sections 53B-8a-103 through 53B-8a-105; and

(b)  as included in the budget approved by the board.

(4) 

(a)  All money paid by account owners in connection with account agreements shall be deposited as received into separate accounts within the program fund which shall be invested and accounted for separately.

(b)  Money accrued by account owners in the program fund may be used for:

(i)  payments to any institution of higher education;

(ii)  payments to the account owner or beneficiary;

(iii)  transfers to another 529 plan; or

(iv)  other expenditures or transfers made in accordance with the account agreement.

(5) 

(a)  All money received by the plan from the proceeds of gifts and other endowments for the purposes of the plan shall be:

(i)  deposited, according to the nature of the donation, as received into the endowment fund or the administrative fund; and

(ii)  invested and accounted for separately.

(b)  Any gifts, grants, or donations made by any governmental unit or any person, firm, partnership, or corporation to the plan for deposit to the endowment fund or the administrative fund is a grant, gift, or donation to the state for the accomplishment of a valid public eleemosynary, charitable, and educational purpose and is not included in the income of the donor for Utah tax purposes.

(c)  The endowment fund or the administrative fund may be used to enhance the savings of low income account owners investing in the plan, for scholarships, or for other college savings incentive programs as approved by the board.

(d)  Transfers may be made between the endowment fund and the administrative fund upon approval by the board.

(e)  Endowment fund earnings not accruing to a beneficiary under an account agreement, not transferred to the administrative fund, or not otherwise approved by the board for expenditure, shall be reinvested in the endowment fund.

(6)  Subsection (2) does not prohibit the board from offering individual account owners a variety of voluntary investment options that have different risk profiles and investment objectives.

(7) 

(a)  The board shall make proxy voting records available to the state treasurer upon the state treasurer’s request.

(b)  The state treasurer is subject to the same restrictions on disclosure of the proxy voting records as the board.

Amended by Chapter 242, 2023 General Session

  Previous section
Next section  
 Part 1 Contents