La. Admin. Code tit. 28 § VI-517

Current through Register Vol. 50, No. 11, November 20, 2024

Section VI-517 - Termination, Refund, and Rollovers of an Education Savings Account

A. Account Termination

1. The administrator may terminate an ABLE account at any time.

2. Through April 30, 2021, in the event the person for whose benefit the account was opened is no longer an eligible individual as defined in §507, the administrator shall

a. terminate the account; or

b. transfer the account to another eligible individual who is also a member of the family of the original eligible individual within 60 days of the determination that the original eligible individual is no longer qualified.

3. Beginning on May 1, 2021, in the event the person for whose benefit the account was opened ceases to be an eligible individual as defined in §507, the account may remain open through the end of the fifth full calendar year during which the person ceases to be an eligible individual as defined in §507 The administrator shall exercise one of the following options by the end of the applicable calendar year:

a. terminate the account; or

b. transfer the account to another eligible individual who is also a member of the family of the eligible individual.

4. The LATTA may terminate an account as follows.

a. If LATTA determines that funds have been disbursed for expenses other than QDEs, LATTA may require the return of the funds to the ABLE account. If funds are not returned to the account within 60 days of a request to do so, LATTA, in its sole discretion, may refund any balance remaining and close the account.

b. The LATTA may terminate an account if no deposit of at least $10 has been made within 180 days from the date of notification of approval of the account.

c. The LATTA may terminate an account if the eligible individual for whom the account was opened no longer meets the criteria to be an eligible individual and a new eligible individual is not named by the end of the fifth full calendar year during which the person for whose benefit the account was opened ceases to be an eligible individual.

d. The LATTA may terminate an owner's agreement if it finds that the account owner or beneficiary provided false or misleading information (see §507).

i. If the LATTA terminates an owner's agreement under this Subsection, all interest earnings on principal deposits may be withheld and forfeited, with only principal being refunded.

ii. An individual who obtains program benefits by providing false or misleading information will be prosecuted to the full extent of the law.

B. Refunds

1. Requests for refund may result in the termination of the account and in the refund of:

a. the deposits invested in fixed earnings, if the account has been open for less than 12 months;

b. the redemption value, if the account has been open for 12 or more months;

c. the deposits to or the current value of an account invested in a variable earnings option, whichever is less, if the account has been open for less than 12 months;

d. the current value of an account invested in variable earnings, if the account has been open for 12 or more months.

2. Refunds from investment options with variable earnings shall be assigned a trade date of one business day after the business day of receipt of the request.

C. Designation of a Refund Recipient. The refund recipient can only be the account owner, his heirs, or his estate, and the administrator may designate the refund recipient when completing the owner's agreement. If no refund recipient is designated, the refund shall be made to the Disability Services Fund established by R.S. 28.826(B)(2)(d).

D. Voluntary Termination of an Account

1. Refunds shall be equal to the redemption value of the ABLE account at the time of the refund, and shall be made to the person designated in the owner's agreement or by rule.

2. The person receiving the refund shall be responsible for any state or federal income tax that may be payable due to the refund.

E. Effective Date of Account Termination. Account termination shall be effective at midnight on the business day on which the request for account termination and all supporting documents are received. Accounts will be credited with interest earned on principal deposits through the effective date of the closure of the account.

F. Refund Payments. Payment of refunds for voluntary termination under §515. D shall be made within 30 days of the date on which the account was terminated. The termination refund shall consist of the principal remaining in the account and interest remaining in the account accrued on the principal through the end of the calendar year preceding the year in which the request to terminate an account is made. Interest earned in excess of $10 during the calendar year of termination will be refunded within 45 days of the date the state treasurer announces the interest rate for the preceding calendar year. Interest earned of $10 or less during the calendar year of termination will be forfeited.

G. Rollovers

1. Rollovers to another ABLE Account Administered by LOSFA

a. An administrator may rollover any part of an ABLE account to ABLE account if the beneficiary of the account receiving the funds is a member of the family of the beneficiary of the original account.

b. The current value of the account from which the rollover is made will be transferred to the new account.

2. Rollover to another ABLE Program

a. An administrator may request a rollover of the current value of the account to another qualified ABLE program.

La. Admin. Code tit. 28, § VI-517

Promulgated by the Tuition Trust Authority, Office of Student Financial Assistance, LR 43642 (4/1/2017), Amended LR 441888 (10/1/2018), Amended LR 47577 (5/1/2021), Amended LR 50490 (4/1/2024).

AUTHORITY NOTE: Promulgated in accordance with R.S. 17:3081-3089.