At my investment advisor's recommendation, I set-up an IL 529 plan to take advantage of the IL state income tax credit for 529 contributions. We had discussed the many problems with this plan, but felt the tax credit was the right thing to seek right now - despite the higher fees, limited fund selection and rigid unfriendly rules.
It was easy to set the plan up at Bright Start Savings. Though I had to fill out the forms multiple times. The website times out too quickly. Furthermore if you click help, you leave the application form and have to start over again. Overall - it's one of the most poorly designed sites from a financial instituation I've seen since 1997 (they were all bad back then).
After setting up my account I specified an electronic draft on my money market account to fund the investment and then printed out the paperwork to rollover our upromise account.
On reading the paperwork for the Bright Start Savings program I noticed the ridiculous restrictions the plan places on investors. For example, investors can only change investment selections once per year. How unfair to the investor. If it weren't for the tax benefit - I would never invest in such a program.
There were numerous additional restrictions on administrative issues, transfers and roll overs. Furthermore, you can only have one beneficiary per account - unlike the Upromise plan, where you can have multiple sub-accounts for different beneficiaries. If you wanted to change your allocations after your first time, you would need to rollover your account into a new accont - but why go through a rollover?
With such ridiculous restrictions and a fairly high expense ration of almost 1%, I predict I keep my money in the plan for very long. It really seems like the plan sponser wanted to minimize administrative costs at the expense of customer service by limiting investor options.
Has anyone else tried Illinois' Bright Start Savings Plan?