Following the passage of the Achieving Better Life Experience (ABLE) Act in December 2014, several states have passed their own legislation authorizing 529A plans for tax-exempt savings on qualified expenses for people with disabilities.
So far, 47 states have passed ABLE legislation, but only a handful have actually opened or are about to open plans to beneficiaries. Twelve states have begun outreach and education by creating websites for consumers explaining the federal ABLE Act, and information on their own plans when available.
Ohio opened its Stable Account plans on June 1 to people with disabilities nationwide. Beneficiaries must either be entitled to Supplemental Security Income or Social Security Disability Insurance due to their disability, or their condition must be listed on the Social Security Administration's list of compassionate allowance conditions.
The plan is administered through the state treasurer. Assets are allocated across four Vanguard LifeStrategy funds (Growth, Moderate Growth, Conservative Growth or Income) and an FDIC-insured account. Lifetime contributions may not exceed $426,000.
Tennessee's program, ABLE TN, started accepting beneficiaries on June 13. Like the Ohio program, it's available nationwide, and it has similar eligibility requirements. There are 14 investment options.
"We are focused right now on educating advisors on the benefits of an ABLE TN account, particularly our strong investment options and low fees. We have spoken to many advisors who have questions about who is eligible to open an account," she told ThinkAdvisor in an email. "On AbleTN.gov, we have created a tool called ABLE Assist to help advisors ask the right questions of their clients in order to better determine eligibility."
Nebraska will launch its plan, the Enable Savings Plan, on June 30. It will be available through the First National Bank of Omaha and the Nebraska state treasurer.
There will be three target allocations – conservative, moderate and growth – and an FDIC bank savings account, Deborah Goodkin, program director for the Enable plan at First National, told ThinkAdvisor.
"The Nebraska Investment Council looked at a variety of Vanguard underlying funds and put together an allocation," she said.
