Fees and Expenses

The following table describes the fees and expenses that you pay if you open and contribute to an account in CHET's direct-sold plan. These fees are directly or indirectly paid out of the assets of your account. Except for the fees listed below, there are currently no other fees, charges or penalties imposed or payable in connection with opening or maintaining an account, other than any taxes and related penalties. The Trustee reserves the right to change the current fees, or to impose new or additional fees, expenses, charges or penalties in the future.

Annual Asset-Based Fees
Investment Option Direct Plan Manager Fee(1)(2) Estimated Underlying Mutual Fund Expenses Administrative Fee(1)(3) Total Annual Asset-Based Fees(5)
Conservative Managed Allocation Option
Age Band 0-3 Years 0.15% 0.28% 0.01% 0.44%
Age Band 4-7 Years 0.15% 0.33% 0.01% 0.49%
Age Band 8-11 Years 0.15% 0.38% 0.01% 0.54%
Age Band 12-14 Years 0.15% 0.37% 0.01% 0.53%
Age Band 15-17 Years 0.15% 0.35% 0.01% 0.51%
Age Band 18+ Years 0.15% 0.33% 0.01% 0.49%
Moderate Managed Allocation Option
Age Band 0-3 Years 0.15% 0.22% 0.01% 0.38%
Age Band 4-7 Years 0.15% 0.27% 0.01% 0.43%
Age Band 8-11 Years 0.15% 0.32% 0.01% 0.48%
Age Band 12-14 Years 0.15% 0.35% 0.01% 0.51%
Age Band 15-17 Years 0.15% 0.33% 0.01% 0.49%
Age Band 18+ Years 0.15% 0.30% 0.01% 0.46%
Aggressive Managed Allocation Option
Age Band 0-3 Years 0.15% 0.15% 0.01% 0.31%
Age Band 4-7 Years 0.15% 0.20% 0.01% 0.36%
Age Band 8-11 Years 0.15% 0.25% 0.01% 0.41%
Age Band 12-14 Years 0.15% 0.28% 0.01% 0.44%
Age Band 15-17 Years 0.15% 0.32% 0.01% 0.48%
Age Band 18+ Years 0.15% 0.32% 0.01% 0.48%
Global Equity Index Option
  0.15% 0.08% 0.01% 0.24%
Global Tactical Asset Allocation Option
  0.15% 0.91% 0.01% 1.07%
International Equity Index Option
  0.15% 0.06% 0.01% 0.22%
Active Global Equity Option
  0.15% 0.67% 0.01% 0.83%
U.S. Equity Index Option
  0.15% 0.05% 0.01% 0.21%
High Equity Balanced Option
  0.15% 0.19% 0.01% 0.35%
Active Fixed-Income Option
  0.15% 0.56% 0.01% 0.72%
Social Choice Option
  0.15% 0.18% 0.01% 0.34%
Index Fixed-Income Option
  0.15% 0.12% 0.01% 0.28%
Money Market Option(6)
  0.15% 0.13% 0.01% 0.29%
Principal Plus Interest Option(7)
  None None None None

(1) Although the Direct Plan Manager Fee and the Administrative Fee are deducted from an Investment Option, not from your Account, each Account in the Investment Option indirectly bears its pro rata share of the Direct Plan Manager Fee and the Administrative Fee as these fees reduce the Investment Option’s return.

(2) Each Investment Option (with the exception of the Principal Plus Interest Option) pays the Direct Plan Manager a fee at an annual rate of 0.15% (15 basis points) of the average daily net assets of the Investment Option. The Direct Plan Manager fee is subject to further reductions if total assets in the Direct Plan reach certain levels.

(3) For its services administering the Direct Plan, each Investment Option (with the exception of the Principal Plus Interest Option) pays to the Trustee an Administrative Fee at an annual rate of 0.01% of the average daily net assets of the Investment Option.

(4) The percentages set forth in this column are based on the expense ratios of the mutual funds in which an Investment Option invests.  The amounts are calculated using the expense ratio reported in each mutual fund’s most recent prospectus available prior to the date of this Disclosure Booklet weighted according to the Investment Option’s allocation among the mutual funds in which it invests.  Although these expenses are not deducted from an Investment Option’s assets, each Investment Option (other than the Principal Plus Interest Option) indirectly bears its pro rata share of the expenses of the mutual funds in which it invests as these expenses reduce such mutual fund’s return.

(5) These figures represent the estimated weighted annual expense ratios of the mutual funds in which the Investment Options invest plus the Administrative Fee and the fee paid to the Direct Plan Manager.

(6) Effective August 1, 2011, the Direct Plan Manager and the Trustee have agreed to voluntarily waive the Money Market Option’s Direct Plan Manager Fee and Administrative Fee, respectively, in an attempt to maintain at least a 0.00% return for this Investment Option.  The Direct Plan Manager and the Trustee may discontinue the waiver at any time without notice. Please note that after the waivers, the net return for the Money Market Option may still be negative.

(7) The Principal Plus Interest Option does not pay a Direct Plan Manager Fee or Administrative Fee.  TIAA-CREF Life Insurance Company (“TIAA-CREF Life”), the issuer of the funding agreement in which this Investment Option invests and an affiliate of TFI, makes payments to TFI, as Plan Manager.  This payment, among many other factors, is considered by the issuer when determining the interest rate(s) credited under the funding agreement.

Investment Cost Example

The example in the following table is intended to help you compare the cost of investing in the different Investment Options over various periods of time. This hypothetical example assumes that:

  • You invest $10,000 in an Account for the time periods shown below.
  • Your investment has a 5% compounded return each year, except for the Principal Plus Interest Option, which is assumed to have a 3% compounded return each year. Actual performance will vary.
  • You withdraw the assets from your Account at the end of the specified periods for Qualified Higher Education Expenses.
  • Total annual asset-based fees remain the same as shown in the Fee Table above.
  • The example does not consider the impact of any potential state or federal taxes on the redemption.

Although your actual costs may be higher or lower, based on the above assumptions your costs would be:

Investment Cost Example
Investment Option Approximate Cost of
$10,000 Investment
   One Year       Three Years       Five Years       Ten Years   
Conservative Managed Allocation Option
Age Band 0-3 Years $45 $142 $247 $555
Age Band 4-7 Years $50 $158 $275 $617
Age Band 8-11 Years $55 $174 $302 $678
Age Band 12-14 Years $54 $170 $297 $666
Age Band 15-17 Years $52 $164 $286 $642
Age Band 18+ Years $50 $158 $275 $617
Moderate Managed Allocation Option
Age Band 0-3 Years $39 $122 $214 $481
Age Band 4-7 Years $44 $138 $241 $543
Age Band 8-11 Years $49 $154 $269 $605
Age Band 12-14 Years $52 $164 $286 $642
Age Band 15-17 Years $50 $158 $275 $617
Age Band 18+ Years $47 $148 $258 $580
Aggressive Managed Allocation Option
Age Band 0-3 Years $32 $100 $174 $394
Age Band 4-7 Years $37 $116 $202 $456
Age Band 8-11 Years $42 $132 $230 $518
Age Band 12-14 Years $45 $142 $247 $555
Age Band 15-17 Years $49 $154 $269 $605
Age Band 18+ Years $49 $154 $269 $605
Global Equity Index Option
  $25 $77 $135 $306
Global Tactical Asset Allocation Option
  $110 $342 $593 $1,311
International Equity Index Option
  $23 $71 $124 $281
Active Global Equity Option
  $85 $266 $462 $1,029
U.S. Equity Index Option
  $22 $68 $118 $268
High Equity Balanced Option
  $36 $113 $197 $444
Active Fixed-Income Option
  $74 $231 $402 $897
Social Choice Option
  $35 $109 $191 $431
Index Fixed-Income Option
  $29 $90 $158 $356
Money Market Option
  $30 $93 $163 $369
Principal Plus Interest Option
  $0 $0 $0 $0

Additional Fees
The table below indicates that there are no additional fees and expenses deducted from each Account/paid directly by the participant.

Additional Fees
  Percent Dollars
Application Fee 0% $0
Cancellation Fee 0% $0
Change in Beneficiary 0% $0
Change in Investment Options 0% $0
Other Charges as Applicable 0% $0
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