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(3) Administrative Fee(4) Total Annual Asset-Based Fees(5)
Conservative Managed Allocation Option
Age Band 0-3 Years 0.18% 0.20% 0.01% 0.39%
Age Band 4-7 Years 0.18% 0.21% 0.01% 0.40%
Age Band 8-11 Years 0.18% 0.22% 0.01% 0.41%
Age Band 12-14 Years 0.18% 0.23% 0.01% 0.42%
Age Band 15-17 Years 0.18% 0.24% 0.01% 0.43%
Age Band 18+ Years 0.18% 0.24% 0.01% 0.43%
Moderate Managed Allocation Option
Age Band 0-3 Years 0.18% 0.19% 0.01% 0.38%
Age Band 4-7 Years 0.18% 0.20% 0.01% 0.39%
Age Band 8-11 Years 0.18% 0.21% 0.01% 0.40%
Age Band 12-14 Years 0.18% 0.21% 0.01% 0.40%
Age Band 15-17 Years 0.18% 0.22% 0.01% 0.41%
Age Band 18+ Years 0.18% 0.23% 0.01% 0.42%
Aggressive Managed Allocation Option
Age Band 0-3 Years 0.18% 0.18% 0.01% 0.37%
Age Band 4-7 Years 0.18% 0.19% 0.01% 0.38%
Age Band 8-11 Years 0.18% 0.20% 0.01% 0.39%
Age Band 12-14 Years 0.18% 0.20% 0.01% 0.39%
Age Band 15-17 Years 0.18% 0.21% 0.01% 0.40%
Age Band 18+ Years 0.18% 0.22% 0.01% 0.41%
Equity Index Option
  0.18% 0.10% 0.01% 0.29%
Active Equity Option
  0.18% 0.68% 0.01% 0.87%
High Equity Option
  0.18% 0.21% 0.01% 0.40%
Active Fixed-Income Option
  0.18% 0.37% 0.01% 0.56%
Index Fixed-Income Option
  0.18% 0.13% 0.01% 0.32%
Social Choice Option
  0.18% 0.19% 0.01% 0.38%
Money Market Option(6)
  0.18% 0.13% 0.01% 0.32%
Principal Plus Interest Option
  None(7) None None(7) None

(1) The Direct Plan Manager Fee and the Administrative Fee are the only fees deducted from Direct Plan assets. The Direct Plan Manager Fee and the Administrative Fee may change at any time. Although there are no fees that are deducted from your Account, when you invest in the Direct Plan, you indirectly bear a pro rata portion of the Direct Plan Manager Fee and the Administrative Fee because, when these fees are deducted from Direct Plan assets as described in footnotes (2) and (4) below, the value of the Units is reduced.

(2) For its services as Direct Plan Manager, each Investment Option (with the exception of the Principal Plus Interest Option) pays TFI a Direct Plan Manager Fee equal to the stated percentage of the average daily net assets held by that Investment Option. The Direct Plan Manager Fee indicated applies on total assets in the Plan up to $2.0 billion. The Direct Plan Manager Fee will revert to 0.20%, however, if total assets in the Direct Plan decrease to below $1.5 billion for a period of at least 90 days. If, however, total assets in the Direct Plan reach $2.0 billion or above for a period of at least 90 days, the Direct Plan Manager Fee indicated will be further reduced to 0.15% and will remain at such level for as long as such assets do not decline to below $2.0 billion for 90 consecutive days. The Direct Plan Manager fee will be further reduced if total assets in the Direct Plan reach certain levels.

(3) For each Investment Option that invests in multiple underlying Mutual Funds, the figures in this column are based on a weighted average of the expenses of each underlying Mutual Fund's expense ratio as reported in the applicable Mutual Funds' most recent prospectus available prior to the date of this Disclosure Booklet, in accordance with the Investment Option's asset allocation among its underlying Mutual Funds. For each Investment Option that invests in a single Mutual Fund, the figures in the column represent the underlying Mutual Fund's expense ratio as reported in the Mutual Fund's most recent prospectus available prior to the date of this Disclosure Booklet. Each Investment Option (other than the Principal Plus Interest Option) indirectly bears its pro rata portion of the underlying Mutual Funds' expenses because when fees are deducted from an underlying Mutual Fund' assets, the value of the underlying Mutual Fund's shares is reduced.

(4) 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.

(5) The Total Annual Asset-Based Fees equal the Estimated Underlying Mutual Fund Expenses plus the Administrative Fee and the Direct Plan Manager Fee. You should refer to the Investment Cost Example below for the total assumed investment cost over 1-, 3-, 5-, and 10-year periods.

(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. 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 be negative.

(7) The Principal Plus Interest Option does not pay a Direct Plan Manager Fee or an Administrative Fee. TIAA-CREF Life pays to TFI an annual asset-based fee for the services that TFI provides for this Investment Option. TIAA-CREF Life also pays the Trustee a fee, equal to 0.01% of the average daily net assets held by the Principal Plus Interest Option, for expenses related to the oversight of the Trust for this Investment Option. TIAA-CREF Life takes these fees, among many other factors, into consideration when determining the interest credited to the Trustee on Funding Agreement accumulations.

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 $40 $126 $219 $494
Age Band 4-7 Years $41 $129 $225 $506
Age Band 8-11 Years $42 $132 $230 $518
Age Band 12-14 Years $43 $135 $236 $531
Age Band 15-17 Years $44 $138 $241 $543
Age Band 18+ Years $44 $138 $241 $543
Moderate Managed Allocation Option
Age Band 0-3 Years $39 $122 $214 $481
Age Band 4-7 Years $40 $126 $219 $494
Age Band 8-11 Years $41 $129 $225 $506
Age Band 12-14 Years $41 $129 $225 $506
Age Band 15-17 Years $42 $132 $230 $518
Age Band 18+ Years $43 $135 $236 $531
Aggressive Managed Allocation Option
Age Band 0-3 Years $38 $119 $208 $469
Age Band 4-7 Years $39 $122 $214 $481
Age Band 8-11 Years $40 $126 $219 $494
Age Band 12-14 Years $40 $126 $219 $494
Age Band 15-17 Years $41 $129 $225 $506
Age Band 18+ Years $42 $132 $230 $518
Equity Index Option
  $30 $93 $163 $369
Active Equity Option
  $89 $279 $484 $1,076
High Equity Option
  $41 $129 $225 $506
Active Fixed-Income Option
  $57 $180 $314 $703
Index Fixed-Income Option
  $33 $103 $180 $406
Social Choice Option
  $39 $122 $214 $481
Money Market Option
  $33 $103 $180 $406
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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