PROGRAM DETAILS BOOKLET - MAY 2018 - DREAMAHEAD

 
Program Details Booklet
May 2018
DreamAhead College Investment Plan
Program Details Booklet
May 2018

Notices

Program Details Booklet
This Program Details Booklet has been identified by the Committee on Advanced Tuition Payments and
College Savings as the Offering Material (as defined in the College Savings Plans Network Disclosure
Principles, Statement No. 6, adopted July 1, 2017) intended to provide substantive disclosure of the terms
and conditions of an investment in DreamAhead.

If you or the Beneficiary are not a Washington State resident, before investing you should consider whether
you or the Beneficiary’s home state offers a Qualified Tuition Program that provides its taxpayers with
favorable state tax and other state benefits such as financial aid, scholarship funds and protection from
creditors that may only be available through an investment in the home state’s Qualified Tuition Program,
and which are not available through an investment in DreamAhead. Since different states have different tax
provisions, this Program Details Booklet contains limited information about the state tax consequences of
investing in DreamAhead.

Keep in mind that state-based benefits should be one of many appropriately weighted factors to consider
when making an investment decision. In addition, you should periodically assess, and if appropriate, adjust
your 529 Plan investment choices with your time horizon, risk tolerance, and investment objectives in
mind.

None of the Program Administrators insures or guarantees Accounts or investment returns on Accounts.
Investment returns are not guaranteed. Your account may lose value.

This Program Details Booklet contains important information you should review before opening an
Account in DreamAhead, including information about the benefits and risks of investing. Please read it
carefully and save for future reference. Capitalized terms used in this Program Details Booklet are defined
in the Glossary (beginning on page 63).

Accuracy of Information in Program Details Booklet
The information in this Program Details Booklet is believed to be accurate as of the cover date but is
subject to change without notice. No one is authorized to provide information that is different from the
information in the most current form of this Program Details Booklet, and participants in DreamAhead will
agree that they have relied solely on the information contained in this Program Details Booklet, and the
amendments and written supplements to this Program Details Booklet.

Other Important Information
529 Plans are intended to be used only to save for Qualified Expenses. DreamAhead is not intended to
be used, nor should it be used, by any taxpayer for the purpose of evading federal or state taxes or tax
penalties. Taxpayers should seek tax advice from an independent tax advisor based on their own particular
circumstances.
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Table of Contents
Getting Started........................................................................................................... 4
Summary ................................................................................................................... 5
My Account................................................................................................................ 7
      Opening My Account ............................................................................................................7
      Contributing to My Account................................................................................................. 8
      Maintaining My Account .................................................................................................... 14
      Using My Account .............................................................................................................. 17
      Closing My Account........................................................................................................... 20
Fees .........................................................................................................................21
      Year of Enrollment Portfolio Fee Structure Tables ................................................................22
      Static Portfolio Fee Structure Tables ....................................................................................23
      Service-based and Other Fees ..............................................................................................23
      Approximate Cost for a $10,000 Investment........................................................................24
Important Risks You Should Know About ................................................................... 26
Investment Choices................................................................................................... 30
      Investments Overview ....................................................................................................... 30
      Year of Enrollment Investment Option ................................................................................ 31
      Static Investment Option ....................................................................................................36
      Portfolio Profiles.................................................................................................................37
      Underlying Fund Descriptions ............................................................................................42
      Descriptions of Principal Risks by Fund Company................................................................48
      Additional Investment Information ....................................................................................53
      Investment Performance..................................................................................................... 55
Important Federal Tax Information ............................................................................ 56
General Information ................................................................................................. 59
Plan Administration ................................................................................................. 62
Glossary................................................................................................................... 63
Agreement ............................................................................................................... 67

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Getting Started
Getting started with DreamAhead is easy. Just follow these steps:

       1. Read this Program Details Booklet in its entirety and save it for future reference.
          It contains important information you should review before opening an Account,
          including information about the benefits and risks of investing.

       2. Gather your information:
           a. Your Social Security number and date of birth
           b. Your permanent address
           c. Your Beneficiary’s Social Security number and date of birth (if applicable)
           d. Your email address
           e. Your checking or savings account number and your bank’s routing number (if you
              want to contribute electronically with a bank transfer)

       3. Go online to www.dreamahead.wa.gov and click on Open an Account. The easy-to­
          follow directions will guide you through the enrollment process. Enrolling online is
          fast, convenient, and secure. In as little as 10 minutes, you can be fully signed up and
          saving for college. Or, if you prefer, you can complete and mail the Enrollment Form
          that is downloadable from the forms section of the site.

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Summary
This Program Details Booklet provides you with        Fees (p. 21)
important information that can help you decide
                                                      DreamAhead has no commissions, loads, or sales
whether to open a DreamAhead College Investment
                                                      charges. The Total Annual Asset-Based Fee varies
Plan Account. You can find the key terms used
                                                      from 0.266% to 0.400%, depending upon the
throughout this Program Details Booklet in the
                                                      Portfolio(s) you choose. In addition, we charge an
Glossary, beginning on page 63. This Summary
                                                      Annual Account Maintenance Fee of $35 to each
provides highlights of the features of DreamAhead
                                                      Account. We also charge certain transaction-based
and tells you where you can find more information
                                                      fees that may apply to your Account. In this section,
about each topic.
                                                      you can find a detailed description of the Fees
                                                      associated with your DreamAhead Account.
About DreamAhead
DreamAhead is one of two qualified tuition            Important Risks You Should Know About
programs administered and distributed by the          (p. 26)
Committee on Advanced Tuition Payment and
                                                      As with any investment, there are risks involved
College Savings (Committee). DreamAhead
                                                      in investing in DreamAhead, including the risk of
is designed to help individuals and families
                                                      investment losses; the risk of changes in federal
throughout the U.S. save for college in a tax-
                                                      and state laws, including federal and state tax laws;
advantaged way, and offers valuable advantages
                                                      the risk of Program changes, including changes in
including tax-deferred growth, generous
                                                      Fees; and the risk that contributions to DreamAhead
contribution limits, attractive Investment Options,
                                                      may adversely affect the eligibility of you or your
and professional investment management. The
                                                      Beneficiary for financial aid or other benefits.
Committee also offers a 529 prepaid college
                                                      To learn more about the risks, please thoroughly
tuition program, known as the Guaranteed
                                                      read and carefully consider the information in
Education Tuition (GET) program, that is only
                                                      this section and throughout this Program Details
open to Washington residents. GET assesses
                                                      Booklet, and ask your tax, legal and investment
different fees and withdrawal limitations than
                                                      advisors about these risks.
DreamAhead. For additional information
on GET, please visit www.get.wa.gov.
                                                      Investment Choices (p. 30)
What’s Inside                                         When you enroll in DreamAhead, you choose to
                                                      invest using at least one of two different investment
My Account (p. 7)                                     approaches, based upon your investing preferences
DreamAhead is open to U.S. citizens or resident       and risk tolerance. You can choose between the
aliens throughout the U.S. You, as the Account        Year of Enrollment Investment Option or the Static
Owner, maintain complete control over the             Investment Option, or a mix of both.
Account and can open Accounts for any number           •   Year of Enrollment Investment Option
of Beneficiaries, including yourself. This section         This option offers Portfolios designed for
will guide you through the details of opening              different Enrollment Years (anticipated year of
a DreamAhead Account, contributing to your                 enrollment at college) in two-year increments.
Account, maintaining your Account, using your              In addition, the Year of Enrollment Investment
savings to pay for Qualified Expenses, and closing         Option has three risk tolerances (Conservative,
your Account. To open an Account, you must                 Moderate or Growth) to choose from. In each
complete your Enrollment online or send us a               Portfolio, your money is moved automatically
completed Enrollment Form, which is a contract             to progressively more conservative
between you, as the Account Owner, and the                 investments as your Beneficiary approaches
Committee, establishing the obligations of each.           the targeted Year of Enrollment. Each Portfolio
                                                           invests in one or more Underlying Fund(s)
                                                           managed by Fidelity, JP Morgan, Schwab and/
                                                           or Vanguard.

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•   Static Investment Option                           Plan Administration (p. 62)
     This option offers seven (7) Portfolios. Unlike
                                                        This section summarizes the administration of
     the Portfolios in the Year of Enrollment
                                                        DreamAhead.
     Investment Option, if you invest in a Static
     Portfolio, the composition of investments           •   The Committee administers and provides
     within the Portfolio remains fixed over time,            oversight of DreamAhead and the GET
     subject to periodic re-balancing back to the            Program.
     Portfolio guidelines and any changes in             •   The Washington Student Achievement
     investment policy made by the Committee.                Council supports DreamAhead and the GET
     Each Portfolio invests in one or more                   Program, based on the Committee’s direction.
     Underlying Fund(s), each of which is managed
                                                         •   Sumday Administration, LLC serves as the
     by either Fidelity, JP Morgan, Schwab and/or
                                                             Program Manager of DreamAhead. Sumday
     Vanguard. If you invest in a Static Portfolio,
                                                             Administration, LLC and its affiliates have
     your assets will not shift to more conservative
                                                             overall responsibility for DreamAhead’s day­
     investments over time unless you specifically
                                                             to-day operations, including recordkeeping,
     direct us to move your assets to another
                                                             customer service and administrative services.
     Portfolio.
                                                         •   Sumday Administration LLC’s affiliate
You may change your Investment Options for                   Lockwood Advisors, Inc. provides investment
balances currently in your DreamAhead Account                advisory services to the Committee for
up to two times per calendar year, or if you change          DreamAhead.
your Beneficiary. You can apply new contributions        •   Sumday Administration, LLC and Lockwood
to your existing Portfolio selections, or to new             Advisors, Inc. are affiliates of BNY Mellon.
Portfolios. This section also provides details on how
to view investment performance of each Portfolio.       Glossary (p. 63)
                                                        This section provides definitions of terms contained
Important Federal Tax Information (p. 56)
                                                        in this Program Details Booklet. Note that terms
As a 529 Plan, DreamAhead offers federal tax            defined in the glossary (other than you and your)
benefits, including tax-deferred earnings. Any          appear with initial capital letters when referenced
earnings withdrawn from your Account are                in this document.
free of federal income tax when applied toward
Qualified Expenses. If you take a Non-Qualified         Agreement (p. 67)
Distribution, any earnings are subject to federal
and applicable state income taxes and an additional     In this section, we ask you to review and
10% federal tax penalty (Distribution Tax). If you      acknowledge your rights and responsibilities
take an Other Distribution, any earnings may be         in connection with your enrollment in the
subject to federal and applicable state income          DreamAhead College Investment Plan. You must
taxes, but not the Distribution Tax. Learn more         review this agreement in detail prior to completing
about tax considerations associated with investing      an Enrollment in the Program. Upon enrolling in
in DreamAhead by thoroughly reviewing this              the Program you will be prompted to acknowledge
section. Before you invest, you should consult an       your understanding of, and agreement with the
independent tax advisor regarding the application       terms, conditions and information contained in the
of tax laws to your particular circumstances.           Program Details Booklet and the Agreement.

General Information (p. 59)
In this section you will learn about the rights
and obligations associated with your Account,
considerations related to changes to your Account,
this document, and state and federal laws, and
claims against your Account.

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My Account
Opening My Account

                                                        different Beneficiaries. Different Account Owners
At a Glance
                                                        may also have an Account for the same Beneficiary
In this section, you will learn more about
                                                        within DreamAhead, but contributions to an
 ▸ Who can be an Account Owner                          Account will be limited
                                                        if the total assets held       A Beneficiary can
 ▸ Successor Owners                                     in all Accounts for that
                                                                                       be of any age and
                                                        Beneficiary, taking into
 ▸ Beneficiaries                                                                         can be a child,
                                                        account the proposed
                                                        contribution, exceed           grandchild, other
                                                        or would exceed the             relative or even
Account Owner/Custodian
                                                        Maximum Account                   someone not
To participate in DreamAhead, you must complete         Balance limit. Please            related to you.
the online Enrollment process or the Enrollment         see Contributing To
Form and open an Account either online or by            My Account — Maximum Account Balance Limit
mail. You must be a U.S. citizen (or a resident         on page 12. The Beneficiary may be of any age;
alien), or an entity that is organized in the U.S.,     however, the Beneficiary must be an individual and
be 18 years or older, and have a valid permanent        not a trust or other entity. A Beneficiary does not
U.S. residential address. You may also open an          have to be named at Enrollment when the Account
Account as a custodian for a child under the            Owner is a tax-exempt organization as defined in
Uniform Gift to Minors Act / Uniform Transfer           the Code, and the Account has been established as a
to Minors Act (UGMA/UTMA). By signing the               general scholarship fund.
Enrollment Form or completing your online
Enrollment, as applicable, you consent and agree
that your Account is subject to the terms and           Control Over the Account
conditions of this Program Details Booklet.             Although other individuals or entities may make
                                                        contributions to your Account, you, as the Account
Successor Owner                                         Owner, retain control of all contributions made
                                                        as well as all earnings credited to your Account. A
You may designate a Successor Owner (to the             Beneficiary who is not also the Account Owner has
extent permissible under applicable law) to             no control over any of the Account assets. Except
succeed to all of your rights, title, and interest in   as required by law, only you may direct transfers,
your Account upon your death. You can make              rollovers, selection of Investment Options,
this designation online during Enrollment, on the       investment changes, withdrawals, and Beneficiary
Enrollment Form, or in writing. We must receive         changes as the Account Owner. Prior to other
and process your request before the Successor           individuals or entities making contributions to your
Owner designation can be effective. You may             Account, you warrant that you will communicate
revoke or change the designation of a Successor         to them the risks and material information of
Owner at any time online or by submitting a             investing in DreamAhead that are disclosed in this
Manage Successor Owner Form. You can access             Program Details Booklet.
forms at www.dreamahead.wa.gov or by calling
us at 1-844-529-5845.
                                                        Documents in Good Order
Beneficiary                                             To process any transaction in DreamAhead, all
                                                        necessary documents must be in good order,
You can set up an Account for the benefit of            which means signed and verified when required
your child, grandchild, spouse, yourself, another       and properly, fully, and accurately completed, as
relative, or even someone not related to you.           determined by the Program Administrators.
Each Account can have only one Beneficiary at
any time. You may have multiple Accounts for

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My Account
Contributing to My Account

                                                       allocated to each of the Portfolios you selected. You
At a Glance
                                                       can make subsequent contributions to different
In this section, you will learn more about
                                                       Portfolio(s) than the selection(s) you make during
 ▸ Different Ways to Contribute to your Account        your online Enrollment or on your Enrollment
                                                       Form.
 ▸ Automatic Investment Plans

 ▸ Payroll Deductions                                  Contribution Date
                                                       Except for AIP and EFT contributions and
 ▸ Rollovers from other 529 Plans                      payroll direct deposits, we will credit any money
                                                       contributed to your Account on the same Business
Minimum Contributions                                  Day if we receive the contribution in good order and
                                                       prior to the close of the New York Stock Exchange
To open an Account, you must make an initial
                                                       (NYSE), normally 4 p.m., Eastern Time. Note that
contribution of at least $25 per Portfolio. After
                                                       certain contributions may take time to be received
that, all transfers (contributions, withdrawals, and
                                                       by DreamAhead including checks mailed to us and
monthly transfers) must be at least $5 per Portfolio
                                                       EFT transfers from your bank. We will credit the
from which funds are contributed or withdrawn.
                                                       contribution on the next succeeding Business Day
The Committee has the discretion and reserves the
                                                       if we receive it in good order after the close of the
right to waive the minimum contribution.
                                                       NYSE.
You can make your initial and any additional
contributions by check, Electronic Funds Transfer/     Allocation of Future Contributions
Automated Clearing House (EFT or ACH), an              At the time of enrollment, you must select how you
Automatic Investment Plan (AIP) which is a             want your contributions allocated. You must also
recurring monthly investment, payroll deduction,       select how you want your subsequent contributions
rolling over assets from another Qualified Tuition     allocated at the time of each investment unless
Program, moving assets from an UGMA/UTMA               you have created an AIP. You may move existing
account or Coverdell Education Savings Account,        DreamAhead assets to different Portfolios up to two
or by redeeming U.S. Savings Bonds. We will not        times per calendar year. You may also move assets
accept contributions made by cash, money order,        at the same time you change your Beneficiary.
travelers checks, foreign checks, checks dated
more than 180 days from the                            Contributions by Check
date of receipt, checks post-      You can open
dated more than seven (7)                              You may make your initial contribution by
                                  a DreamAhead         check. The initial minimum contribution of $25
days in advance, checks with
                                   Account with        must accompany your
unclear instructions, starter
                                  as little as $25.    Enrollment Form. Any         There are several
or counter checks, credit
card or bank courtesy checks,                          additional contributions      different ways to
third-party personal checks over $15,000 (per day),    you make by check
                                                                                   make contributions
instant loan checks, or any other check we deem        must be at least $5 per
                                                       investment Portfolio
                                                                                     to your Account.
unacceptable. No stocks, securities, or other non-
cash assets will be accepted as contributions.         selected. Checks must
                                                       be made payable to DreamAhead. Third-party
You can allocate each contribution among any of the    personal checks up to $15,000 (per day) must be
Portfolios. However, the minimum allocation per        payable to you or the Beneficiary and properly
selected Portfolio is $5. For example, if you make a   endorsed by you or the Beneficiary to DreamAhead.
$100 contribution to your Account to be allocated
among 3 Portfolios, a minimum of $5 must be

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Automatic Investment Plan (AIP)                       and/or additional contributions to your Account,
                                                      provided you have submitted certain information
You may contribute to your Account by
                                                      about the bank account from which the money
authorizing us to receive monthly automated
                                                      will be withdrawn, subject to certain processing
debits from your checking or savings account,
                                                      restrictions. You can complete transactions through
if your bank is a member of the Automated
                                                      the following means: by providing EFT instructions
Clearing House (ACH), subject to certain
                                                      in the online Enrollment process or on the paper
processing restrictions. You can begin an AIP
                                                      Enrollment Form, by submitting EFT instructions
either when you enroll by completing the
                                                      online after enrollment at www.dreamahead.wa.gov
AIP section of the online Enrollment process
                                                      or in writing by submitting the appropriate form.
or the paper Enrollment Form, or after your
                                                      Debit requests that we receive in good order:
Account has been opened, either online or in
writing by submitting the appropriate form. AIP        •   before 1 p.m., Pacific Time, will generally be
contributions must equal at least $5 per Portfolio         given a trade date of the second Business Day
per month. Your AIP authorization will remain              after the date of receipt and will be effected
in effect until we have received and processed             at that day’s closing price for the applicable
your notification of its termination.                      Portfolio. If your bank processes our request
                                                           for withdrawal from your bank account on the
You may terminate your AIP at any time. Any                first Business Day after the date of receipt, the
changes to, or termination of, an AIP must                 EFT debit from your bank account will occur
occur at least three (3) Business Days before a            on the second Business Day after we receive
scheduled debit from your bank account and will            the request.
become effective as soon as we have received and       •   after 1 p.m., Pacific Time, will generally be
processed your request.                                    given a trade date of the third Business Day
                                                           after the date the request is received, and will
There is no charge for enrolling in an AIP. Debits         be effected at that day’s closing price for the
from your bank account will occur prior to the             applicable Portfolio. If your bank processes
day you indicate, provided the day is a regular            our request for withdrawal from your bank
Business Day. If the day you indicate falls on a           account on the second Business Day after the
weekend or a holiday, the AIP debit will occur on          date of receipt, the EFT debit will occur on
the next Business Day.                                     the third Business Day after we receive the
                                                           request.
       An Automatic Investment Plan
     allows you to set up contributions               We do not charge a fee for contributing by EFT.
         to your Account by making
      monthly automated debits from                   Limitations on AIP and EFT Contributions
     your checking or savings account.                We may place a limit on the total dollar amount
                                                      per day you may contribute to your Account by
The start date for an AIP must be at least three      EFT and will reject contributions in excess of that
(3) Business Days from the date of submission of      limit. If you plan to contribute a large dollar amount
the AIP request. If a start date for an AIP is less   to your Account by EFT, you should contact a
than three (3) Business Days from the date of         Customer Service Representative at 1-844-529-5845
the submission of the AIP request, the AIP will       to inquire about the current limit prior to making
start on the requested day in the next succeeding     your contribution. An EFT or AIP contribution may
month.                                                fail because the bank account on which it is drawn
                                                      contains insufficient funds or because you did not
                                                      provide correct and complete banking instructions
Electronic Funds Transfer (EFT)
                                                      (Please see Failed Contributions on page 13). If
You may also contribute by EFT (also known as         we cannot process your AIP or EFT contribution
ACH). Each contribution must be in an amount          because the bank account on which it is drawn
of at least $5 per Portfolio selected. You may        contains insufficient funds, because of incomplete
authorize us to withdraw funds by EFT from            information or inaccurate information, or if the
a checking or savings account for both initial        transaction would violate processing restrictions, we

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reserve the right to suspend processing of future       Rollover Contributions
AIP and EFT contributions. All bank accounts used
                                                        You can make your initial investment by rolling
to make AIP or EFT contributions must be in the
                                                        over assets from another Qualified Tuition Program
name of the Account Owner or Beneficiary, (only if
                                                        to DreamAhead for the benefit of the same
authorized by the Beneficiary).
                                                        Beneficiary. You can also rollover assets from your
                                                        Account or another Qualified Tuition Program to a
Payroll Direct Deposits                                 Beneficiary who is a Member of the Family of your
You may be eligible to make automatic, periodic         current Beneficiary. (Please see Options for Unused
contributions to your Account by payroll                Contributions: Changing a Beneficiary, Transferring
deduction (if your employer offers this service).       Assets to Another of Your Accounts on page 14).
You may set up payroll deduction for subsequent         A rollover for the same Beneficiary is restricted to
contributions after your Account is opened. The         once in each 12-month period.
minimum payroll deduction contribution is $5
per paycheck. We will only permit contributions         Incoming rollovers can be direct or indirect. A
by payroll deduction from employers able to meet        direct rollover is the transfer of money from one
our operational and administrative requirements.        Qualified Tuition Program directly to another.
You must complete payroll deduction instructions        An indirect rollover is the transfer of money to
by downloading and completing the Payroll               you from an account in another state’s Qualified
Deduction Form at www.dreamahead.wa.gov. You            Tuition Program; you then contribute the money
will need to print these instructions and submit        to your Account. To avoid federal income tax
them to your employer. Payroll direct deposits that     consequences and the Distribution Tax, you must
we receive in good order:                               contribute an indirect rollover within 60 days of
 •   before 1 p.m., Pacific Time, will generally be     the distribution. You should be aware that not all
     given a trade date of the first Business Day       states permit direct rollovers from Qualified Tuition
     after the date of receipt and will be effected     Programs. In addition, there may be state income
     at that day’s closing price for the applicable     tax consequences (and in some cases state-imposed
     Portfolio.                                         penalties or fees) resulting from a rollover out of a
                                                        state’s Qualified Tuition Program.
 •   after 1 p.m., Pacific Time, will generally be
     given a trade date of the second Business Day
                                                        Refunded Distributions
     after the date the request is received, and will
     be effected at that day’s closing price for the    In the event the Beneficiary receives a refund from
     applicable Portfolio.                              an Eligible Educational Institution, those funds will
                                                        be eligible for re-contribution to your Account if:
Gift Contributions                                       •   The Beneficiary of your Account is the same
Third parties may make gift contributions to your            beneficiary receiving the refund; and
Account via two channels:                                •   The re-contribution is made within 60 days of
 •   Paper Form. Giftors can download and                    the date of the refund.
     complete a paper gifting form, attach a check
     for the gift amount and mail to DreamAhead.        The re-contributed amount will not be subject to
     The form can be found at www.dreamahead.           federal income tax or the Distribution Tax. For tax
     wa.gov/forms/. We do not charge a Fee for          purposes, please maintain proper documentation
     gifts made using a paper form.                     evidencing the refund from the Eligible Educational
                                                        Institution.
 •   E-Gifting. Online gifting can be performed
     if you or the Beneficiary creates an online
                                                        Moving Assets From an UGMA/UTMA
     gifting page for your Account. Third parties
     can then contribute via the E-Gifting link. We     Account
     may assess Fees for E-Gifting.                     If you are the custodian of an UGMA/UTMA
                                                        account, you may be able to open an Account in
                                                        your custodial capacity, depending on the laws
                                                        of the state where you opened the UGMA/UTMA
                                                        account. These types of accounts involve additional
                                                                                       dre a m a h e a d . wa. g ov   |   10
restrictions that do not apply to regular 529 Plan    in DreamAhead, contributions from an existing
accounts. We are not liable for any consequences      UGMA/UTMA account to an Account would
related to your improper use, transfer, or            require liquidation of non-cash assets held by the
characterization of custodial funds.                  existing UGMA/UTMA account, which would
                                                      generally be a taxable event. Please contact a tax
In general, your UGMA/UTMA custodial Account          advisor to discuss the consequences of transferring
is subject to the following additional requirements   assets held in an existing UGMA/UTMA account
and restrictions:                                     and what the implications of a transfer may be for
 •   You must indicate that the Account is an         your specific situation.
     UGMA/UTMA Account by completing the
     appropriate information during online            Moving Assets From a Coverdell Education
     Enrollment or checking the appropriate box       Savings Account (ESA)
     on the paper Enrollment Form;                    You may fund your Account by moving assets
 •   You must establish an Account in your            from a Coverdell ESA. Please indicate this on the
     custodial capacity separate from any Accounts    paper Enrollment Form or paper Contribution
     you may hold in your individual capacity;        Form for any additional contributions that result
 •   The actions you take in connection with the      from the liquidation of ESA assets. Unlike UGMA/
     Account, including your authorization of the     UTMA accounts, the Beneficiary may be changed
     distributions, will be governed by applicable    to a Member of the Family of the beneficiary of an
     UGMA/UTMA law;                                   ESA. Making distributions from an ESA to fund an
                                                      Account for the same Beneficiary is not a taxable
 •   You will not be able to change the Beneficiary   transaction. Prior to moving assets from a Coverdell
     of the Account (directly or by means of a        ESA, you should consult your tax advisor for more
     Rollover Distribution), except as may be         information.
     permitted by applicable UGMA/UTMA law;
 •   You will not be permitted to change the          Redeeming U.S. Savings Bonds
     Account Owner to anyone other than a             (Series EE or Series I Bonds)
     successor Custodian during the term of the
     custodial account under applicable UGMA/         You may fund your Account with proceeds from
     UTMA law;                                        the redemption of certain U.S. Savings Bonds.
                                                      In certain cases, you may redeem U.S. Savings
 •   You must notify us when the custodianship        Bonds for this purpose without paying tax under
     terminates, and your Beneficiary is legally      the education tax exclusion. Please visit www.
     entitled to take control of the Account by       savingsbonds.gov to determine if you are eligible
     completing the appropriate form. At that         for this exclusion.
     time, the Beneficiary will become the Account
     Owner and will become subject to the
     provisions of DreamAhead applicable to non-
                                                      Additional Form Requirements for
     UGMA/UTMA Account Owners;                        Rollovers, ESAs, and Series EE or Series I
 •   Any tax consequences of a distribution from
                                                      Bonds
     an Account will be imposed on the Beneficiary    Rollover contributions and other transfers to
     and not on the Custodian; and                    your Account must be accompanied by a Rollover
                                                      Form as well as any other information we may
 •   We may require you to provide
                                                      require, including the information required for
     documentation evidencing compliance with
                                                      certain contributions described below. To roll over
     the applicable UGMA/UTMA law.
                                                      assets into an Account in DreamAhead, you must
                                                      complete a Rollover Form and an Enrollment Form.
In addition, certain tax consequences described
under Important Federal Tax Information starting
                                                      When making a contribution to your Account
on page 56 may not be applicable in the case of
                                                      with assets previously invested in an ESA or assets
Accounts opened by a custodian under UGMA/
                                                      received from a redemption of Series EE and Series
UTMA. Moreover, because only contributions
                                                      I bonds, or through a rollover from anther Qualified
made in cash form may be used to open an Account

                                                                                    dre a m a h e a d . wa. g ov   |   11
Tuition Program, you must indicate the source of        Regardless of the calendar year for which a
the contribution and provide us with the following      contribution is deductible, the date of the
documentation:                                          contribution (and thus the price of the Units
 •   In the case of a contribution from an ESA,         purchased with the contribution) will be determined
     an account statement issued by the financial       as discussed above the applicable contribution
     institution that acted as custodian of the         method.
     account that shows basis and earnings.
                                                        Trusts, Corporations, and other
 •   In the case of a contribution from the
     redemption of Series EE or Series I U.S.           Entities as Account Owners
     Savings Bonds, an account statement or Form        An Account Owner that is a trust, partnership,
     1099-INT issued by the financial institution       corporation, association, estate, or another
     that redeemed the bond showing interest            acceptable type of entity must submit
     received upon the redemption of the bond.          documentation to DreamAhead to verify the
 •   In the case of a rollover, either you or the       existence of the entity and identify the individuals
     previous Qualified Tuition Program must            who are eligible to act on the entity’s behalf.
     provide us with a statement issued by the          Examples of appropriate documentation include a
     distributing program that shows the basis and      trust agreement, partnership agreement, corporate
     earnings portions of the distribution.             resolution, articles of incorporation, bylaws,
                                                        or letters appointing an executor or personal
Please visit the DreamAhead website at                  representative. You must submit this documentation
www.dreamahead.wa.gov or contact a Customer             when establishing an Account. We will not be able
Service Representative at 1-844-529-5845 for any        to open your Account until we receive all of the
of the forms you may need. Until we receive the         information required on the Enrollment Form and
documentation described above, as applicable, we        any other information we may require, including
will treat the entire amount of the contribution as     the documentation that verifies the existence of the
earnings in the Account receiving the transfer.         Account Owner. If the Account Owner is an agency
                                                        or instrumentality of a state or local government,
                                                        or tax-exempt organization as defined in Section
Year End Contributions
                                                        501(c)(3) of the Code, has established the Account
We will generally treat contributions sent by U.S.      as a general scholarship fund, and is therefore not
mail as having been made in a given year if checks      required to name a Beneficiary and is not subject
are received and processed on or before December        to the Maximum Account Balance limit, the
31 of the applicable year, provided the checks are      organization must provide verification (e.g., an IRS
subsequently paid by the bank on which they are         determination letter) of its exempt status when the
drawn. It is important, therefore, to ensure that       Account is established.
checks sent by U.S. mail are postmarked with
sufficient time to allow for processing.
                                                        Maximum Account Balance limit
With respect to EFT contributions, for tax purposes     You or others can contribute to your Account at any
we will generally treat contributions received by       time, as long as the contribution would not cause
us in a given year as having been made in that year     your Account to exceed the Maximum Account
if you submit them on or before December 31 of          Balance of $500,000 for a Beneficiary. All accounts
that year and the funds are successfully deducted       for the same Beneficiary under all Qualified Tuition
from your checking or savings account at another        Programs sponsored by the State are counted toward
financial institution.                                  the Maximum Account Balance regardless of the
                                                        Account Owner. Earnings may cause the account
We will generally consider contributions made           balances for a Beneficiary to exceed the Maximum
through an AIP as received in the year the AIP debit    Account Balance and no further contributions will
has been deducted from your checking or savings         be allowed at that point. If, however, the market
account at another financial institution. (Please see   value of your Account and other applicable accounts
Automatic Investment Plan (AIP) above).                 for the same Beneficiary falls below the Maximum
                                                        Account Balance, additional contributions will be
                                                        accepted.
                                                                                      dre a m a h e a d. wa. g ov   |   12
If a contribution is made to an Account that            Confirmation of Transactions
would cause the aggregate value of all accounts
                                                        We will send you a separate confirmation notice
for the same Beneficiary to exceed the Maximum
                                                        with respect to each transaction in your Account(s),
Account Balance, the entirety of the contribution
                                                        except for Account assets being automatically
amount will be returned to you or the contributor,
                                                        moved within the Year of Enrollment Options as
as applicable. If you are enrolled in an AIP, the
                                                        your Beneficiary ages. Each notice will instruct you
AIP may be discontinued. Should we increase the
                                                        to log on to your Account to view your transaction
Maximum Account Balance limit, we will accept
                                                        details. Alternatively, if you have elected to
additional contributions up to the new Maximum
                                                        receive paper notices, we will mail you summary
Account Balance limit.
                                                        statements on a quarterly basis. Each statement
                                                        will indicate: the dollar amount of the transaction,
Excess Contributions                                    the unit cost of the Portfolios, the number of
We will return the entirety of any contribution         Units you own in each Portfolio as a result of the
received that would cause the Account balance           transaction and the date of the transaction. If
to exceed the Maximum Account Balance (as               you receive a statement that you believe does not
determined by the close of business on the day          accurately reflect your instructions — for example,
prior to our receipt of your contribution) to the       the amount invested differs from the amount you
contributor, without adjustment for gains or            contributed, or the contribution was not invested
losses. If a contribution is applied to an Account      in the particular Portfolio(s) you selected — you
and we later determine the contribution to              have 60 days from the date of the confirmation
have caused the aggregate market value of the           or quarterly statement to notify us of the error.
account(s) for a Beneficiary in all Qualified Tuition   (Please see Maintaining My Account — Correcting
Programs sponsored by the State to exceed the           Errors on page 15).
Maximum Account Balance, we may refund the
excess contributions and related earnings to the        We use reasonable procedures to confirm that
contributor. Any refund of an excess contribution       transaction requests are genuine. You may be
may be treated as a Non-Qualified Distribution. The     responsible for losses resulting from fraudulent
risk of market loss, tax implications and any other     or unauthorized instructions received by us,
expenses as a result of such a refund will be solely    provided we reasonably believe the instructions
your responsibility.                                    were genuine. To safeguard your Account, please
                                                        keep your information confidential. Contact us
Failed Contributions                                    immediately at 1-844-529-5845 if you believe
                                                        there is a discrepancy between a transaction
If you make a contribution by check, EFT, or AIP
                                                        you requested and the confirmation or quarterly
that is returned unpaid by the bank upon which it
                                                        statement you received, or if you believe someone
is drawn, you will be responsible for any losses or
                                                        has obtained unauthorized access to your Account.
expenses incurred by the Portfolios or DreamAhead
                                                        We may refuse contributions if they appear to be an
and we will charge your returned contribution a
                                                        abuse of DreamAhead.
fee of $25. DreamAhead has the right to reverse
any contribution previously credited due to
nonpayment.

                                                                                      dre a m a h e a d . wa. g ov   |   13
My Account
Maintaining My Account

At a Glance                                              Options for Unused Contributions:
In this section, you will learn more about               Changing a Beneficiary, Transferring
                                                         Assets to Another of Your Accounts
 ▸ Account Statements
                                                         Your Beneficiary may choose not to attend an
 ▸ Changing Beneficiaries                                Eligible Educational Institution or K-12 School or
                                                         may not use all the money in your Account for
 ▸ Changing Investments                                  Qualified Expenses. In either case, you may name
                                                         a new Beneficiary or take a distribution of your
 ▸ Changing Account Owners
                                                         Account assets. Any Non-Qualified Distribution
                                                         from your Account will be subject to applicable
Account Statements                                       income taxes and the Distribution Tax. In addition,
                                                         certain Other Distributions may be subject to
You may choose to receive electronic statements
                                                         applicable income taxes. Please see Using My
or paper statements. You will receive quarterly
                                                         Account beginning on page 17.
and annual statements. Quarterly statements will
include:
                                                         You can change your Beneficiary at any time.
 •   contributions to your Account;                      To avoid negative tax consequences, the new
 •   exchanges within your Account;                      Beneficiary must be a Member of the Family of the
                                                         original Beneficiary. Any change of the Beneficiary
 •   withdrawals made from your Account;
                                                         to a person who is not a Member of the Family of
 •   transaction and maintenance fees you                the current Beneficiary is treated as a Non-Qualified
     incurred;                                           Distribution subject to applicable federal and state
 •   market performance; and                             income taxes and the Distribution Tax. An Account
                                                         Owner who is an UGMA/UTMA custodian will not
 •   the total value of your Account at quarter end.
                                                         be able to change the Beneficiary of the Account,
                                                         except as may be permitted under the applicable
If you receive your statements electronically, we will
                                                         UGMA/UTMA law. Please see Opening My Account
email you a notice that your statement is available
                                                         — Moving Assets from an UGMA/UTMA (Uniform
with instructions on how to retrieve it. If you
                                                         Gifts to Minors Act/Uniform Transfers to Minors
choose to receive your statements in paper form, an
                                                         Act) Account, beginning on page 10.
annual fee of $10 will be charged to your Account.
                                                         To initiate a change of Beneficiary, you must
Your Account statement is not a tax document
                                                         complete and submit a Change Beneficiary Form
and you should not submit it with your tax forms.
                                                         (and an Enrollment Form if you do not already have
However, you could use the Account statement(s)
                                                         an Account for the new Beneficiary). We will make
to determine how much you paid or contributed
                                                         the change upon our receipt and acceptance of the
during the previous tax year.
                                                         signed, properly completed form(s) in good order.
                                                         We reserve the right to suspend the processing of a
You may request duplicate copies of Account
                                                         Beneficiary transfer if we suspect that the transfer
statements to be provided to another party. Your
                                                         is intended to avoid DreamAhead’s exchange
statements are also available online at www.
                                                         and reallocation limits and/or tax laws. Also, a
dreamahead.wa.gov/ for a period of at least
                                                         Beneficiary change or transfer of assets may be
eighteen (18) months.
                                                         denied or limited if it causes one or more Accounts
                                                         to exceed the Maximum Account Balance limit
                                                         for a Beneficiary. There is no fee for changing a
                                                         Beneficiary.

                                                                                        dre a m a h e a d. wa. g ov   |   14
We will invest your assets in accordance with           see Opening My Account — Moving Assets from
your chosen allocation for the new Beneficiary’s        an UGMA/UTMA (Uniform Gifts to Minors
Account. This change may result in a loss in the        Act/Uniform Transfers to Minors Act) Account,
value of your Account depending on market               beginning on page 10.
fluctuations during the time of the change. You
can also transfer assets in the Account to a new        Recovery of Incorrect Amounts
Portfolio(s) when you change the Beneficiary for
                                                        If an incorrect amount is paid to or on behalf of you
the Account.
                                                        or your Beneficiary, we have the right to recover
                                                        this amount from you or your Beneficiary, and to
Changing Investment Strategy                            adjust any remaining balances to correct the error.
You can change the investment strategy for each         The processing of adjustments resulting from
Beneficiary – i.e., make an exchange of existing        clerical errors or other causes that are de minimis
Account assets among Portfolios — up to two             (insignificant) in amount can be waived at our
times per calendar year without changing the            discretion.
Beneficiary. You can initiate this transaction online
or by downloading a form from our website at            Correcting Errors
www.dreamahead.wa.gov/.
                                                        There is a 60-day period for making corrections.
                                                        If, within 60 calendar days after issuance of any
Because you may make no more than two
                                                        Quarterly Account statement you make no written
exchanges per year per Account, it is important
                                                        objection to us regarding an error in the Account
that you select a Portfolio(s) that will meet
                                                        that is reflected on that statement, the statement
your comfort level for risk in a variety of
                                                        will be deemed correct and binding upon you and
market conditions, while also considering your
                                                        your Beneficiary. If you do not write us to object
investment time horizon.
                                                        to a statement within that time period, you will
                                                        be considered to have approved it and to have
Change of Account Owner                                 released the Program Administrators from all
Subject to the limitations included in this             responsibility for matters covered by the statement
Program Details Booklet, you may transfer               or confirmation. Each Account Owner agrees to
ownership of your Account to a new Account              provide all information that we need to comply
Owner. All transfers to a new Account Owner             with any legal reporting requirements.
must be requested in writing and include any
information that may be required by us. However,        Disclosure Relating to Internet Access
ownership or control of your Account may not be
                                                        You have the option to perform Account-related
sold, transferred, used as collateral, or pledged
                                                        transactions and activity electronically via the
or exchanged for money or anything of value.
                                                        Internet. You can securely access and manage
We may require affidavits or other evidence to
                                                        Account information — including quarterly
establish that a change in ownership or control of
                                                        statements and tax forms — virtually 24 hours a
your Account is valid, is non-financial in nature
                                                        day at www.dreamahead.wa.gov/ once you have
or for any other reason. Ownership or control
                                                        created an online username and password.
of your Account may also be transferred under
an appropriate court order, such as pursuant to
                                                        If you choose to open an Account electronically or
divorce proceedings; or by operation of law such
                                                        register for online access to an existing Account,
as a will. In all cases, the new Account Owner is,
                                                        you can also choose to access documents relating to
and must agree to be, bound by the terms and
                                                        your Account via our website.
conditions of the Program Details Booklet and
Enrollment Form. Transferring an Account to
                                                        Please note that if you elect to receive documents
a new Account Owner may have significant tax
                                                        electronically, the only way to get paper copies
consequences. Before doing so, you should check
                                                        of these documents will be to print them from
with your tax advisor regarding your particular
                                                        a computer. You should not elect to conduct
situation. For information about changing the
                                                        transactions electronically if you do not have
Custodian of an UGMA/UTMA Account, please
                                                        regular and continuous Internet access.

                                                                                       dre a m a h e a d. wa. g ov   |   15
The information concerning the Portfolios may           We cannot guarantee the privacy or reliability of
be available on our website. We expect to post on       email, so we will not honor requests for transfers
our website any updated information concerning          or changes received by email, nor will we send
the Portfolios and Underlying Funds as well as          Account information through email. All transfers
updates to the Program Details Booklet at least         or changes made electronically should be made
annually. These materials and information also          through our secure website. Our website uses
may be supplemented throughout the year. We             generally accepted and available encryption
will make any supplements available on our              software and protocols, including Transport Layer
website. We may archive documents and cease             Security. This is to prevent unauthorized people
providing them on the website when they become          from eavesdropping or intercepting information
out-of-date.                                            sent by or received by us. This may require that
                                                        you use certain readily available versions of web
You should consider printing any information            browsers. As new security software or other
posted on our website before it is removed. If you      technology becomes available, we may enhance our
have elected electronic delivery, we may, from          systems.
time to time, notify you by email that documents,
including Account statements, have been
delivered. However, email notification is not a
substitute for regularly checking your Account at
www.dreamahead.wa.gov/. We intend to archive
the transaction history for Accounts after a rolling
48-month period, and Account statements after a
rolling 18-month period, after which they may not
be available through our website. Accordingly, you
should print any Account information before we
remove it. After we archive these documents, you
will be able to obtain a copy for a fee by contacting
a Customer Service Representative at 1-844-529­
5845.

You will be required to provide your username
and password to access your Account information
and perform transactions on our website. Keep
your password private. We will honor instructions
from any person who provides correct identifying
information, and we are not responsible for
fraudulent transactions we believe to be genuine
according to these procedures. Accordingly, you
bear the risk of loss if unauthorized persons
obtain your username and password and conduct
any transactions on your Account. You can reduce
this risk by checking your Account information
regularly. You should avoid using passwords that
can be guessed and should change your password
frequently. For security purposes, our Customer
Service Representatives will not ask you for your
password. It is your responsibility to review your
Account information and to notify us promptly
of any unusual activity. You can withdraw your
consent to receiving documents electronically
at any time by contacting a Customer Service
Representative at 1-844-529-5845 or by making the
change online.

                                                                                     dre a m a h e a d . wa. g ov   |   16
My Account
Using My Account

                                                          •   Beneficiary by check or by Electronic
At a Glance
                                                              Funds Transfer (EFT) using the Automated
In this section, you will learn more about
                                                              Clearing House (ACH) to an established
 ▸ How to use your Account                                    bank account; or
                                                          •   Eligible Educational Institution by check.
 ▸ Qualified Distributions

 ▸ Non-Qualified Distributions                           Timing of Distribution Request
                                                         We process distribution requests received
                                                         in good order before the close of the NYSE
General
                                                         (generally 1 p.m., Pacific Time) on a Business
You can request a distribution from your Account         Day based on the Unit Values of the Portfolios
online or by mail. You can close your Account            underlying the Account for that day. We process
at any time by submitting appropriate forms by           requests received in good order after the close of
mail. Distributions from your Account are either         the NYSE using the Unit Values of the Portfolios
Qualified Distributions, Non-Qualified Distributions     underlying the Account for the next Business
or Other Distributions as determined under IRS           Day.
requirements. As the Account Owner, you are
responsible for satisfying the IRS requirements for      Procedures for Distributions
proof of Qualified Distributions, which includes
retaining any paperwork and receipts necessary to        Only you, as the Account Owner may direct
verify the type of distribution you received. We will    distributions from your Account. Qualified
not provide information to the IRS regarding the         Distributions are made payable to the
type of distribution you                                 Account Owner, the Beneficiary, or an Eligible
receive.                                                 Educational Institution; and may be requested
                                  A distribution
                                                         online. You may also call a Customer Service
                             from your Account           Representative at 1-844-529-5845 to receive
Distributions may be              can be made
subject to federal and/or                                a Withdrawal Form or download the form on
                                 payable to you,         our website at www.dreamahead.wa.gov/.
state tax withholding. For
                                your Beneficiary         Complete and submit the form to us in good
purposes of determining
whether a distribution is         or the Eligible        order and provide such other information or
taxable or subject to the          Educational           documentation as we may require from time to
Distribution Tax, you must         Institution.          time.
determine whether the
distribution is made in connection with the payment      We will generally process a distribution from
of Qualified Expenses, as defined under the Code         an Account within three (3) Business Days
and discussed under Qualified Distributions below        of accepting the request. During periods of
or fits within one of the exceptions to treatment as a   market volatility and at year-end, distribution
Non-Qualified Distribution as discussed under Other      requests may take up to five (5) Business Days
Distributions on page 18 below.                          to process. Please allow ten (10) Business Days
                                                         for the proceeds to reach you. We charge a Fee
                                                         for distributions made by federal wire or by
Method of Payment
                                                         overnight express mail.
We pay distributions to the following payees:
 •   Account Owner by check or by Electronic             Qualified Distributions
     Funds Transfer (EFT) using the Automated            Distributions for Qualified Expenses are
     Clearing House (ACH) to an established bank         generally exempt from federal income taxes and
     account;                                            the Distribution Tax.

                                                                                       dre a m a h e a d. wa. g ov   |   17
Non-Qualified Distributions                              •   Death of Beneficiary. In the event of the
                                                             death of the Beneficiary, you may change
A distribution that does not meet the requirements
                                                             the Beneficiary of your Account, authorize a
for a Qualified Distribution or Other Distribution
                                                             payment to a beneficiary of the Beneficiary,
will be considered a Non-Qualified Distribution by
                                                             or the estate of the Beneficiary, or request
the IRS. The earnings portion of a Non-Qualified
                                                             the return of all or a portion of your Account
Distribution will be subject to federal income taxes
                                                             balance. A distribution due to the death of
(and may be subject to other taxes) and will be
                                                             the Beneficiary, if paid to a beneficiary of the
taxable to the person receiving the distribution.
                                                             Beneficiary or the estate of the Beneficiary,
In addition, Non-Qualified Distributions are
                                                             will not be subject to the Distribution Tax
subject to a Distribution Tax. The person receiving
                                                             but earnings will be subject to federal and
the distribution would need to comply with
                                                             any applicable state income tax. If not paid
IRS requirements, including filing applicable
                                                             to a beneficiary of the Beneficiary or the
forms with the IRS. Although we will report the
                                                             Beneficiary’s estate, the distribution may
earnings portion of all distributions, it is your
                                                             constitute a Non-Qualified Distribution,
final responsibility to calculate and report any tax
                                                             subject to federal and applicable state
liability and to substantiate any exemption from tax
                                                             income taxes at the distributee’s tax rate
and/or penalty.
                                                             and the Distribution Tax. If you select a new
                                                             Beneficiary who is a Member of the Family
Temporary Withdrawal Restriction                             of the former Beneficiary, you will not owe
If you make a contribution by check, EFT, or AIP             federal income tax or the Distribution Tax.
(assuming all are in good order), we will defer the          Special rules apply to UGMA/UTMA custodial
approval of a distribution of that contribution              accounts.
from your Account for ten (10) Business Days after       •   Disability of Beneficiary. If your Beneficiary
deposit. For all third parties and gifts, the hold           becomes Disabled you may change the
period is twenty (20) Business Days. Please note             Beneficiary of your Account or request the
that there will be a hold placed on distribution             distribution of all or a portion of your Account
requests for thirty (30) calendar-days after any of          balance. A distribution due to the Disability
the following occur:                                         of the Beneficiary will not be subject to the
 •   you complete an initial enrollment in                   Distribution Tax, but earnings will be subject
     DreamAhead;                                             to federal and any applicable state income tax
 •   you change your banking information; or                 at your tax rate. If you select a new Beneficiary
                                                             who is a Member of the Family of the former
 •   you change your address.                                Beneficiary instead of taking a distribution,
                                                             you will not owe federal income tax or the
For assistance, please contact a Customer Service            Distribution Tax. Special rules apply to
Representative at 1-844-529-5845 Monday -                    UGMA/UTMA custodial accounts.
Friday, 6 a.m. to 5 p.m. Pacific Time.
                                                         •   Receipt of Scholarship. If your Beneficiary
                                                             receives a qualified scholarship, you may
Other Distributions                                          withdraw Account assets up to the amount
The distributions discussed below are not subject            of the scholarship without incurring the
to the Distribution Tax. Except for a Rollover               Distribution Tax. A qualified scholarship
Distribution, a Refunded Distribution or an ABLE             includes certain educational assistance
Rollover Distribution, the earnings portion of each          allowances under federal law as well as
distribution discussed will be subject to federal            certain payments for educational expenses
and to any applicable state income taxes. (Please            (or attributable to attendance at certain
see Important Federal Tax Information— Transfers             educational institutions) that are exempt
and Rollovers on page 56). You should consult a tax          from federal income tax. The earnings portion
advisor regarding the application of federal and             of a distribution due to a qualified scholarship
state tax laws if you take any of these distributions.       is subject to federal and any applicable state
                                                             income tax at the distributee’s tax rate.

                                                                                       dre a m a h e a d . wa. g ov   |   18
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