Thinking my Chicago-based employer was going to put me on an IL payroll, I moved transferred our Upromise 529 payments to Illinois' poorly administrated Bright Start Savings Program.
Not only that, I put in an additional $2k.
Unfortunately, it looks like I'll be paying NC state tax - not IL.
Actually, I'll pay both until I fully relocate from IL to NC. But NC will be removed from my paycheck and my account will fill out forms for IL at year end(s).
The rub is, I was not stop the transfer of my money from Upromise to IL. So now the money is stuck in a low grade plan clearly designed to minimize administrative costs for the plan managers at the expense of convenience and customer service for the citizens of IL - and I don't even get a tax benefit!!!
If I can, I will roll all the money over to a better plan. I've heard that Nevada and New York have good investment options. Illinois' 1% really doesn't make sense. It's possible that IL may try to limit a rollover, but we'll see.
The biggest challenge with Illinois' plan is it's the least worst option. If I want to take advantage of the tax deductible nature of IL state income tax (only 3% compared to the corrupt theives running North Carolina's state government at 8.25%), I'll have to either roll the money in or contribute and possibly roll it out later. IL caps the tax allowable contribution at $20k (including roll-ins), which means my maximum benefit is $600.00 each year. Not a huge amount, but still, money (and more than my hourly rate of pay).
I'll have to talk with the investment manager to decide next steps.