Is TIAA-CREF Tuition Financing, Inc. (a wholly owned subsidiary of TIAA-CREF), the Program Manager for OCSP, sound financially?
Since 1918, millions of individuals have relied on TIAA-CREF's financial strength. As an organization, TIAA-CREF has stood the test of time over a span that includes the Great Depression, World War II, the inflation of the 1970's and the liquidity crisis of 2007/2008. In recognition of TIAA's stability, soundness, and overall strength, TIAA is one of just three insurance companies to receive AAA ratings from Standard & Poor's and the highest ratings from the three other major rating agencies. These ratings are based on an independent analysis of TIAA's balance sheet, capital position, and asset quality. (These ratings do not apply to investment options managed by TIAA-CREF Tuition Financing, Inc).* Throughout the sub prime credit crisis, TIAA-CREF has largely avoided the kinds of problems that have plagued the financial services industry by minimizing exposure. (Current and future portfolio holdings are subject to risk.)
What is TIAA-CREF’s perspective on current economic conditions?
Click here to read about it.
Are my investments guaranteed?
No Account is insured or guaranteed a return on its principal or investment, except for TIAA-CREF Life Insurance Company's guarantee to the OCSP under the Funding Agreement for the Guaranteed Option. The five remaining Investment Options have varying degrees of risk and are not guaranteed.
Should I rebalance?
Asset allocation is a very important and individual decision that is dependent upon your own personal circumstances. Rebalancing based solely on emotion is never a good idea, however, having a sound investment strategy that is reviewed periodically is always a good idea. Investing for education presents special challenges as the high cost of college demands an investment strategy aggressive enough to generate the opportunity to build the assets you'll need while seeking to maintain their value as the time you'll need them approaches. Contributions and any earnings may be transferred to another investment option once per calendar year or upon a transfer of funds to an OCSP Account for a different eligible beneficiary. OCSP offers different options that allow you to find an approach that is best for you based on your own time horizon and tolerance for investment risk. In general, equity investments, like stocks, offer the opportunity for higher returns over the long term but also expose you to more risk. Therefore, you may need to adjust your risk level to your time horizon. If you're getting an early start on college savings and have 10 years or more to invest before you'll need the money, you may want to start out with a more aggressive equities portfolio and then moderate the risk level using less risky investments as college approaches. The Age-Based Allocation option does this for you automatically where the allocation gradually shifts to a more conservative mix of funds (fewer equities) as the beneficiary grows older.
Why should I open an account or continue to invest?
Saving for college is one of the most pressing financial challenges that a family will face. A college education is an important ingredient for anyone's success. Research shows that people with college degrees can have more job choices and earn more money than those people with no degree. And with the rising costs of higher education, it is more important than ever to continue to save for college expenses. OCSP, Oklahoma’s 529 College Savings program, offers you a smart way to do so. Special tax benefits of this program include tax-deferred growth on any earnings and tax-free withdrawals of contributions and any earnings if used for qualified higher education costs. And if you are an OK taxpayer, OCSP is the only 529 Plan that provides a state income tax deduction of up to $10,000 per year (single filers) and $20,000 for couples filing jointly, on contributions made to OCSP. The amount you contribute to OCSP can be deducted from your Oklahoma taxable income up to a maximum of $10,000 per year ($20,000 for couples filing jointly). Amounts deducted may be subject to recapture if a non-qualified withdrawal or rollover distribution is taken (depending on the timing of these transactions), with different adverse Oklahoma income tax treatment of non-qualified withdrawals versus rollover distributions. Read the Disclosure Booklet carefully.
Additionally, OCSP is affordable (you can invest as little as $25 a month per investment option) and easy (have contributions sent directly from your bank account).
Can I roll over funds from another 529 plan into OCSP?
You are permitted to transfer funds from another 529 college savings plan to an account in OCSP for the same beneficiary once within a 12-month period without incurring federal income tax. The 529 college savings plan from which you are transferring funds may be subject to differences in features, costs and surrender charges. You should consult with your tax advisor or the other 529 college savings plan. State and local taxes may apply. To do a rollover, use the Rollover Form (PDF, 51KB)
* A++, A.M. Best Company (as of 9/08); AAA, Fitch Ratings (as of 8/08); Aaa, Moody's Investors Service (as of 7/08); AAA, Standard & Poor's (as of 8/08)—the highest possible ratings from these independent analysts. These ratings do not apply to mutual funds or any other product or service not fully backed by TIAA's/TIAA-CREF Life's claims-paying ability.
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