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Dear ScholarShare 529 Plan Account Owner,
There are now more than 310,000 ScholarShare 529 college savings
accounts, which means more and more families are wisely investing
in their higher education goals. That collective commitment to
the ScholarShare 529 College Savings Plan has resulted in over
$8.4 billion in plan assets as of 10/31/18. We couldn’t be more
pleased that in this, our 19th year, we are witnessing the plan
continuing to help families pay higher education expenses with
contributions and earnings from years of dedicated saving.
Annually, in our Report on Higher Education, we proudly provide
you with updates to the plan and information on investment
performance, current college cost trends, and how to contact your
legislative representative. This issue covers those topics, plus several
feature articles, including a Q&A with our beloved 10-year-old
spokeskid, Taj Mishra, and a look at how California is currently
preparing students to enter the 5th largest economy in the world.
On behalf of the ScholarShare Investment Board, thank you
for investing in California’s 529 College Savings Plan and in your
family’s bright future.
If you have questions regarding your account or about the plan in
general, please call our toll-free number, 800.544.5248, or visit
ScholarShare529.com. We welcome your questions and comments.
Best,
Julio Martinez
Executive Director
ScholarShare Investment Board
INSIDE
2 California news in higher education and industry
2 How can California better prepare its students to enter the 5th largest economy in the world?
3 California’s new community college breaks ground – Online.
3 Employers lend a hand in making college savings stress-free.
4 Q&A with ScholarShare 529 spokeskid, Taj Mishra
4 The best birthday or holiday gift? An eGift
5-6 Historical performance
6 Undergraduate California resident tuition costs
2018 REPORT ON HIGHER EDUCATION 32
California news in higher education and industry.How can California better prepare its students to enter the 5th largest economy in the world?
THIS YEAR, California surpassed Britain as the globe’s 5th
largest economy and the state is engaging in multiple efforts
to prepare our next generation to power the Golden State.
The first order of business? Increasing the number of gradu-
ates produced by our institutions of higher education. By
2025, California is expected to fall short of more than 2 million
degrees and credentials necessary to fuel its workforce and
keep the state’s economy growing.
One way the state is attempting to close this “degree
gap” is by better aligning regional business needs with the
academic programs offered by local colleges and universities.
Doing What Matters for Jobs and the Economy and Strong
Workforce Program are two statewide initiatives designed to
improve student completion rates and prepare California’s
workforce for high-demand jobs in order to better serve the
needs of changing regional economies.
These programs have already created productive
partnerships between regional colleges and employers.
One emerging partnership in the Sacramento area between
the healthcare provider Dignity Health and the Los Rios
Community College District (LRCCD) is assisting students
aiming to enter the region’s health field. Specifically, Dignity
Health is working closely with LRCCD to accelerate the
academic preparation and training students need to enter the
field in the coming years.
Another example of a collaborative effort between
educational institutions and the business community is one
launched by the Bay Area Council – this time in the area of
aviation, an industry scrambling to hire qualified workers. The
Council is working with local community colleges to better
prepare students to receive their Federal Aviation Administra-
tion (FAA) certification and be able to apply for hundreds of
in-demand careers that only require a two-year education and
certification.
To continue helping lead the global economy and to fill the
pipeline with qualified workers with relevant skill sets, Califor-
nia will need more innovative successful initiatives like these.
For students willing to stay abreast of the skills in demand, the
Golden State’s job outlook most certainly looks bright.
California Economic Summit, March 1, 2018: “California aims to retool its workforce for the future of work”; The Sacramento Bee, May 4, 2018: “California now world’s fifth-largest economy, bigger than Britain”
Employers lend a hand in making college savings stress-free.IT’S NO SECRET THAT COLLEGE IS EXPENSIVE. These rising costs
are creating financial burdens for
students and parents alike. Yet, many
families still believe in the value of
post-secondary education, and their
employers agree.
Through ScholarShare 529’s
Workplace Savings Program, nearly
1,000 California companies are
helping families to save for higher
education as part of their employee
benefits packages. These commit-
ted employers represent 11 of the
state’s largest businesses and 8 of
the 10 best companies to work for in
the U.S., according to Forbes’ list of
America’s Best Employers 2018.
For companies not yet offering
a workplace college savings option,
here are a few advantages of and
considerations for 529 workplace
savings plans:
• Small investment, with a
meaningful payoff. College
savings programs, such as Schol-
arShare 529, are easy and free for
employers to manage, yet poten-
tially worth thousands of dollars
to employees through 100 percent
tax-free growth.
• Performance and fees. 529 college
savings plans offer tax benefits,
but they aren’t all created equal.
California’s ScholarShare 529
College Savings Plan has a strong
track record of investment returns
and competitive fees.
• Effortless college savings. A 529
workplace savings program makes
it easy for employees to save
for higher education through
direct deposit.
• A recruitment and retention tool.
More than 70 percent of families
who want to open a 529 plan
don’t know the steps involved.*
By serving as a conduit to college
savings, employers are delivering
a potentially attractive recruitment
and retention tool.
• Fortify fiscal health and the
workforce. A 529 plan increases
access to college by minimizing
financial barriers. This translates
to more Californians accessing
higher education and reduces the
skills gap in the workforce while
boosting the state’s fiscal health.
Adding a college savings option
to a company’s benefits suite can
positively and genuinely impact the
lives of employees, the workforce
and everyone in California. To learn
more about the state’s ScholarShare
529 Workplace Savings Program,
visit ScholarShare529.com/employer.
*savingforcollege.com: 2016 Annual College Savings Survey
California’s new community college breaks ground – online.Governor Brown has spearheaded the opening of the 115th communi-ty college: a statewide, online-only public college focused on short, career-oriented certificates. Opening fall 2019, the college’s first three programs will prepare students for careers in medical coding and information technology and supervisor roles in fields such as retail and government. College officials say each of the fields has a shortage of workers and requires education beyond high school, though not necessarily a full degree.
Tuition for the programs will be based on the community college system’s rate of $46 per credit, the lowest fee level of any community college in the country.
EdSource, August 2, 2018: “California’s online community college will break new ground in higher ed”
Businesses leading the state.The top California industries in 2018 turn out to be as diverse as the state they thrive in.
Agriculture Tourism Technology Education Forestry Professional Sports
Airports and Seaports
Livability, April 8, 2018: “Top Industries in California”
“ It didn’t cost the company anything. Being in HR, you want to offer compelling benefits to your employees, and we thought it would be something our employees with college-bound kids would appreciate.”
—Tamara McPhersonHR manager, System Pavers
2018 REPORT ON HIGHER EDUCATION 5
Q&A with ScholarShare 529 Spokeskid, Taj MishraIN 2017, ScholarShare 529 introduced
“James,” a pint-sized financial guru with
a mission to educate California parents
on the merits of saving for college in a
smart way. Taj Mishra, the 10-year-old
actor who plays “James,” along with his
parents Arvind and Kim, shared some
insights on their experience as Scholar-
Share 529’s chief brand ambassador.
Q: Taj, how were you selected as the spokeskid for ScholarShare 529? What was that experience like for you? A: I first auditioned for ScholarShare 529
in Los Angeles, where I live. Everyone
was so nice during my first audition that
I was super excited to get the callback.
Then ScholarShare 529 asked me to
fly to Sacramento for one last audition.
After that, I finally got the part and
have loved being “James”! It is fun to
transform into a financial whiz kid just
by getting my haircut, putting on some
nicer clothes, and, of course, the bow
tie. And I even got to meet the Treasurer
of California!
Q: Taj, have you learned much about saving for college since your time as the spokeskid? What is your advice for kids about saving?A: When I first got the script,
I didn’t even know what a stock
was. This is kind of embarrassing,
but I thought it was the same
thing as a stocking! So yes, I have
certainly learned a lot.
Tax-free growth is key to
maximizing your savings.
I also learned about age-based
portfolios and, after a little
explaining, how compound
interest works. My advice
for kids is to practice saving.
If you are like me, it doesn’t
come naturally when there are so many
video games to buy! We need to know
how to manage our money now. Start
saving just a little bit, fifty cents, one
dollar, five dollars—it all adds up!
Q: Arvind and Kim, how has being ScholarShare 529’s spokeskid changed Taj? Your family?A: Taj has really taken an interest
in his own college savings
account. He wants to know how
much he has and offers advice on
how we should keep saving. Actually,
we have all become brand ambassadors
as we talk to friends and family with
kids and they ask about Taj’s latest
commercials. We make sure to stress
the importance of saving for college
and beyond, using a ScholarShare
529 account.
Historical PerformanceFund Performance for the Period Ending October 31, 2018The following tables show the returns of each Investment Portfolio over the time period(s) indicated. For purposes of this discussion, each age band in the age-based Investment Portfolio is considered a separate Investment Portfolio. The tables below compare the average annual total return of an Investment Portfolio (after deducting fees and expenses) to the returns of a benchmark. The benchmark included in the tables combines the benchmark(s) for the underlying investment(s) in which an Investment Portfolio invests weighted according to the allocations to those underlying investment(s) and adjusted to reflect any changes in the allocations, benchmark(s) or both during the relevant time period. Benchmarks are not available for investment, are not managed and do not reflect the fees or expenses of investing. Past performance is not a guarantee of future results. Performance may be substantially affected over time by changes in the allocations and changes in the investments in which an Investment Portfolio invests. Investment returns and the value of your Account will fluctuate, so that your Account, when redeemed, may be worth more or less than the amounts contributed to your Account.
AGE-BASED PORTFOLIO OPTIONSINCEPTION
DATE YEAR TO DATE 1 YEAR 3 YEAR 5 YEAR 10 YEARSINCE
INCEPTION
ACTIVEAGE-BASEDINVESTMENTPORTFOLIO1
Age Band 0-42 11/04/11 -1.01% 1.60% 8.45% 7.49% - 10.16%
Benchmark - -1.76% 1.18% 7.46% 6.76% - 9.13%
Age Band 5-82 11/04/11 -1.00% 1.35% 7.82% 6.97% - 9.41%
Benchmark - -1.71% 0.92% 6.74% 6.18% - 8.24%
Age Band 9-102 11/04/11 -1.22% 0.91% 6.95% 6.30% - 8.54%
Benchmark - -1.68% 0.64% 6.02% 5.59% - 7.35%
Age Band 11-122 11/04/11 -1.23% 0.66% 6.24% 5.66% - 7.70%
Benchmark - -1.66% 0.36% 5.29% 5.00% - 6.46%
Age Band 13-142 11/04/11 -1.30% 0.32% 5.43% 5.00% - 6.85%
Benchmark - -1.65% 0.06% 4.55% 4.39% - 5.56%
Age Band 152 11/04/11 -1.06% 0.27% 4.73% 4.40% - 5.89%
Benchmark - -1.33% 0.05% 3.74% 3.64% - 4.50%
Age Band 162 11/04/11 -0.77% 0.49% 4.16% 3.90% - 5.21%
Benchmark - -1.02% 0.18% 3.30% 3.20% - 3.89%
Age Band 172 11/04/11 -0.52% 0.52% 3.63% 3.36% - 4.41%
Benchmark - -0.55% 0.45% 2.82% 2.68% - 3.21%
Age Band 18+2 11/04/11 -0.16% 0.71% 3.01% 2.80% - 3.59%
Benchmark - -0.08% 0.73% 2.35% 2.16% - 2.52%
PASSIVEAGE-BASEDINVESTMENTPORTFOLIOOPTION1
Age Band 0-42 11/04/11 -1.59% 1.26% 7.48% 6.86% - 9.24%
Benchmark - -1.69% 1.20% 7.42% 6.81% - 9.25%
Age Band 5-82 11/04/11 -1.68% 0.92% 6.83% 6.32% - 8.39%
Benchmark - -1.67% 0.89% 6.70% 6.23% - 8.36%
Age Band 9-102 11/04/11 -1.61% 0.67% 6.01% 5.69% - 7.47%
Benchmark - -1.66% 0.58% 5.98% 5.63% - 7.46%
Age Band 11-122 11/04/11 -1.46% 0.45% 5.20% 4.97% - 6.48%
Benchmark - -1.66% 0.25% 5.26% 5.03% - 6.57%
Age Band 13-142 11/04/11 -1.82% -0.27% 4.43% 4.35% - 5.56%
Benchmark - -1.67% -0.09% 4.53% 4.42% - 5.66%
Age Band 152 11/04/11 -1.65% -0.29% 3.74% 3.70% - 4.63%
Benchmark - -1.37% -0.11% 3.72% 3.67% - 4.59%
Age Band 162 11/04/11 -1.27% -0.15% 3.39% 3.35% - 4.10%
Benchmark - -1.05% 0.03% 3.29% 3.22% - 3.98%
Age Band 172 11/04/11 -0.78% 0.24% 2.99% 2.96% - 3.55%
Benchmark - -0.58% 0.33% 2.81% 2.70% - 3.28%
Age Band 18+2 11/04/11 -0.41% 0.41% 2.58% 2.49% - 2.95%
Benchmark - -0.10% 0.63% 2.34% 2.17% - 2.58%
GUARANTEED INVESTMENT OPTION
INVESTMENTPORTFOLIO1
Principal Plus Interest Portfolio3 11/04/11 1.20% 1.39% 1.28% 1.23% - 1.31%
The best birthday or holiday gift? An eGift.With your ScholarShare 529 account, you can easily turn
the next birthday or holiday season into a way to build up funds for your child’s bright future. With the
eGift option, you get a turnkey, secure way to ask friends and family for gift contributions. The service is
included when you open your account and is free of charge. Visit ScholarShare529.com for step-by-step instructions.
2018 REPORT ON HIGHER EDUCATION 76
Fund Performance for the Period Ending October 31, 2018
MULTI-FUND PORTFOLIO OPTIONSINCEPTION
DATE YEAR TO DATE 1 YEAR 3 YEAR 5 YEAR 10 YEARSINCE
INCEPTION
INVESTMENTPORTFOLIO1
Active Diversified Equity 11/04/11 -1.01% 1.98% 9.79% 8.59% - 11.68%
Benchmark - -1.87% 1.68% 8.89% 7.90% - 10.89%
Active Growth 11/04/11 -1.06% 1.25% 7.68% 6.90% - 9.36%
Benchmark - -1.71% 0.92% 6.74% 6.18% - 8.24%
Active Moderate Growth 11/09/11 -1.10% 0.62% 5.57% 5.11% - 7.09%
Benchmark - -1.65% 0.06% 4.55% 4.39% - 5.69%
Active Conservative 11/04/11 -0.17% 0.26% 1.74% 1.75% - 2.23%
Benchmark - -0.12% 0.22% 1.23% 1.23% - 1.17%
Active Diversified Fixed Income 11/08/11 -1.25% -0.71% 2.32% 2.41% - 3.40%
Benchmark - -1.71% -1.22% 1.57% 1.91% - 1.95%
Active International Equity 11/10/11 -10.91% -8.37% 4.64% 1.76% - 5.42%
Benchmark - -10.62% -7.91% 4.40% 1.71% - 5.37%
Passive Diversified Equity 11/04/11 -1.66% 1.77% 8.89% 8.05% - 11.00%
Benchmark - -1.76% 1.77% 8.84% 7.97% - 11.02%
Passive Growth 11/04/11 -1.68% 0.86% 6.73% 6.28% - 8.35%
Benchmark - -1.67% 0.89% 6.70% 6.23% - 8.36%
Passive Moderate Growth 11/08/11 -1.68% -0.14% 4.54% 4.40% - 5.57%
Benchmark - -1.67% -0.09% 4.53% 4.42% - 5.61%
Passive Conservative 11/04/11 -0.45% -0.27% 1.30% 1.42% - 1.41%
Benchmark - -0.18% 0.06% 1.22% 1.23% - 1.22%
Passive Diversified Fixed Income 11/08/11 -1.82% -1.56% 1.39% 1.76% - 1.84%
Benchmark - -1.82% -1.52% 1.57% 1.92% - 2.05%
Index International Equity 11/04/11 -10.09% -8.03% 4.57% 2.01% - 5.40%
Benchmark - -10.58% -7.99% 4.26% 1.84% - 5.26%
SINGLE-FUND PORTFOLIO OPTIONS
INVESTMENTPORTFOLIO1
Social Choice 11/04/11 1.06% 5.06% 10.72% 9.55% - 12.53%
Benchmark - 2.43% 6.60% 11.27% 10.81% - 13.79%
Index Bond 11/04/11 -2.53% -2.27% 0.82% 1.65% - 1.60%
Benchmark - -2.38% -2.05% 1.04% 1.83% - 1.84%
Index U.S. Large Cap Equity 11/04/11 2.90% 7.25% 11.41% 11.22% - 13.90%
Benchmark - 3.01% 7.35% 11.52% 11.34% - 14.04%
Index U.S. Equity 11/04/11 2.38% 6.52% 11.23% 10.74% - 13.69%
Benchmark - 2.43% 6.60% 11.27% 10.81% - 13.79%
The performance data quoted represent past performance and are net of all fees and expenses. Past performance is not a guarantee of future results. Your returns and the principal value of your account will fluctuate so your investment may be worth more or less than the original value when you withdraw your money. Current performance may be lower or higher than the performance quoted above. Investors cannot invest directly in a benchmark.
1 All performance figures in the table, with the exception of the performance figures less than one year, represent the average annual compound rate of total return. All figures less than one year represent cumulative, non-annualized returns.
2 Beneficiaries are moved from one Age Band to the next Age Band on the first “rolling date” following their fifth, ninth, eleventh, thirteenth, fifteenth, sixteenth, seventeenth and eighteenth birthdays. The “rolling dates” are March 20, June 20, September 20 and December 20 (or the first business day thereafter).
3 The Principal Plus Interest Portfolio seeks to preserve capital and provide a stable return. The assets in the portfolio are allocated to a funding agreement issued by TIAA-CREF life to the Board, which is the policyholder under the agreement. This funding agreement provides for a return of principal plus a guaranteed rate of interest and allows for the possibility that additional interest may be credited as declared periodically by TIAA-CREF Life. The interest rate guarantee is made to the Board only, and not to account owners or beneficiaries.
Undergraduate California Resident Tuition Costs
CA COMMUNITY COLLEGES CSU SYSTEM UC SYSTEM
2017-2018 $1,104 $5,742 $12,630
2018-2019 $1,104 $5,742 $12,570
Annual Change $0 $0 -$60 Source: 2018 CCC (tuition for CA resident / full-time student) http://icanaffordcollege.com/en-us/aboutcommunitycolleges/collegecosts.aspx 2018 CSU (systemwide tuition fee) https://www2.calstate.edu/attend/paying-for-college/Pages/campus-costs-of-attendance.aspx 2018 UC (systemwide tuition and fees for CA resident) http://admission.universityofcalifornia.edu/paying-for-uc/tuition-and-cost/
Note: These tuition costs represent the estimated costs of attending one year of college as a full-time student at each respective institution. These estimates do not include the cost of additional campus-based fees, which can total as much as an additional $1,500 each year. In all, your total costs will vary depending on your personal expenses and the campus you attend.
Transform your tax refund.Before you get tempted by an impulse buy, remember that your refund can go so much further if you invest it in education.
We have worked with the California Franchise Tax Board to make it easy to deposit your tax refund directly into your ScholarShare 529 account.
What you’ll need:
• ScholarShare 529 routing number • Your ScholarShare 529 account number • Your investment portfolio number
Visit ScholarShare529.com/manage/
#contributions-withdrawals for details.
Your State RepresentativeScholarShare 529 College Savings Plan provides all account owners with contact information for their state legislators annually, as required by law. If you would like to contact your state representative about your ScholarShare 529 account, visit findyourrep.legislature.ca.gov to find the appropriate address and phone number, or contact our office at 916.651.6380.
18SCH042_takeOneBrochure_050118v1_PRINT.pdf 1 5/2/18 8:55 AM
SMART SAVERSchoose
ScholarShare 529.
This hypothetical example assumes an initial contribution of $5,000, monthly contributions of $50 for 18 years, and an average annual return of 7% compounded monthly for an effective rate of 7.23%. Tax calculations assume the maximum federal capital gains tax of 20% and the maximum state marginal tax rate of 13.3%. At the end of the accumulation period the taxable account would be worth $31,290. The ScholarShare 529 account would be worth 25% more than that amount or $39,049. Assumes taxes are paid in lump sum at the end of the accumulation period, and state taxes are not federally deductible. This is only an example and you should expect that your performance and personal tax situation may vary. Past performance does not guarantee future results.
915 Capitol Mall, Room 590
Sacramento, CA 95814
To learn more about the California 529 College Savings Plan, its investment objectives, tax benefits, risks, and costs, please see the Disclosure Booklet at ScholarShare529.com. Read it carefully. Check with your home state to learn if it offers tax or other benefits such as financial aid, scholarship funds or protection from creditors for investing in its own 529 plan. Consult your legal or tax professional for tax advice, including the impact of the new federal tax changes. Investments in the Plan are neither insured nor guaranteed and there is the risk of investment loss. If the funds aren’t used for qualified higher education expenses, a 10% penalty tax on earnings (as well as federal and state income taxes) may apply. Non-qualified withdrawals may also be subject to an additional 2.5% California tax on earnings. TIAA-CREF Individual & Institutional Services, LLC, Member FINRA and SIPC, distributor and underwriter for the California 529 College Savings Plan.
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677447
Tax-free growth can mean up to
25% more for your higher
education expenses.
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