§ 2878 - Participation agreements for investment plan
§ 2878. Participation agreements for investment plan
The corporation shall have the authority to enter into investment plan participation agreements with participants on behalf of beneficiaries pursuant to the provisions of this subchapter, including the following terms and agreements:
(1) A participation agreement shall stipulate the terms and conditions of the investment plan in which the participant makes deposits;
(2) A participation agreement shall specify the method for calculating the return on the deposit made by the participant, which may be a variable or adjustable rate of return;
(3) The execution of a participation agreement by the corporation shall not guarantee in any way that postsecondary education costs will be equal to projections and estimates provided by the corporation or that the beneficiary named in any participation agreement will be admitted to an institution of postsecondary education;
(4) A participation agreement shall clearly and prominently disclose to participants the risks associated with depositing moneys with the corporation;
(5) Participation agreements shall be organized and presented in a way and with language that is easily understandable by the general public. A participation agreement shall clearly and prominently disclose to participants the existence of any load charge or similar charge assessed against the accounts of the participants for administration, operation or services. No fee or similar charge may be imposed with regard to an investment managed by the corporation. Any fee, load or similar charge with regard to any investment not managed by the corporation shall be no greater than required to administer the investment. The cost of originating and servicing any education loans made or acquired pursuant to participation agreements shall not be considered as load charges or similar charges; and
(6) Any investment advisory or management contract used with respect to a participation agreement shall be competitively bid pursuant to guidelines established by the secretary of administration. (Added 1997, No. 79 (Adj. Sess.), § 1, eff. July 1, 1997; amended 2001, No. 58, § 4, eff. June 16, 2001.)