These Frequently Asked Questions (FAQ) were developed to assist you in completing the NextGen Client Direct Series Account Application. The NextGen Client Direct Series Program Description and Participation Agreement describes the program and investment options in more detail. For more information read the Program Description or call FAME at 800-228-3734.
What do I need to do to receive the $500 Alfond Grant?
You need to open a NextGen® account before your baby's first birthday so the $500 Harold Alfond College Challenge Grant can be credited to your account where the grant and any earnings remain until your child is ready for education beyond high school. Remember, there is no need to put any of your own money into the account to receive the grant. However, the Harold Alfond College Challenge hopes you will invest in your own child’s future.
The application available online is the NextGen Client Direct Series Account Application and is a national application for all people who want to open a NextGen account directly.* Not all sections on the application are required. The Frequently Asked Questions below were developed to help individuals who wish to open a NextGen Client Direct Series account to obtain the $500 Harold Alfond College Challenge Grant.
How can I get help to complete the application?
• Contact the NextGen Program Administrator: Finance Authority of Maine (FAME) at 800-228-3734 or info@500forbaby.org
• Contact a FAME regional outreach representative:
• Mila Tappan, Northern and Eastern Maine, 800-228-3734, ext. 3504
• Trish Malloy, Southern and Western Maine, 800-228-3734, ext. 3555
• Contact a financial advisor for assistance
• Come to a Harold Alfond College Challenge Event
• See Frequently Asked Questions below
What is NextGen?
NextGen is the State of Maine’s Section 529 college savings plan. The Finance Authority of Maine (FAME) is the independent state agency that administers Maine’s Section 529 plan.
What is a Section 529 plan?
A Section 529 plan provides a tax advantaged way to save and invest for college and is designed to help families prepare for future college costs. Section 529 refers to that section of the Internal Revenue Code.
This sounds too good to be true, is it?
This $500 Alfond Grant opportunity for your baby’s future education is a legacy gift that Mr. Harold Alfond left to the State of Maine. Mr. Alfond was the former owner of Dexter Shoe Company and created businesses in Maine with Maine people. His love for Maine and interest in sports and children led him to give millions of dollars to Maine people through education, sports programs and centers for children. Mr. Alfond believed that all children deserved the opportunity to achieve higher education and with that he created this gift of a great start to save for college. He believed that you could transform individual families and the State’s future prosperity by helping all Maine’s children aspire to higher education.
There is no obligation to contribute any more money ever to your NextGen account, but Mr. Alfond hoped you would choose to accept the challenge and invest in your child’s future.
FREQUENTLY ASKED QUESTIONS for the NextGen® Direct Series Account Application (and $500 Harold Alfond College Challenge Grant)
Section One
• Who is the Participant?
• Why do you need the personal information asked for on the application?
• What is Estimated Household Net Worth?
• What are Financial Institutions?
• Why would I name a Successor Participant?
Section Two
• Who is the Designated Beneficiary?
Section Four
• Under Employment Information, what if I have no income?
• Who is considered a “control person” or an “insider” of a publicly traded company?
• What if I don’t know my retirement date?
• What is Annual Salary?
• What is Household Income?
• How do I answer the employment section for the beneficiary if the beneficiary is a baby?
Section Six
• Why am I asked about Participant Investing Information?
• What is Primary Investment Objective?
• What is Risk Tolerance?
• What is Trading Experience and Trading Frequency?
Section Seven
• What portfolio is the Alfond Grant invested in?
• Why do I need to choose Investment Portfolio(s)?
• What happens if I do not select a portfolio?
• Can I change my mind and select a different portfolios for my own contributions after I’ve sent in my application?
Section Eight
• Do I have to make a contribution (send in money) to open my NextGen account and receive the Alfond Grant?
Sections Ten and Eleven
• What is “Automated Funding Services”?
• What is the minimum amount I have to contribute if I want to use Automated Funding Services?
• What if I want to make contributions, but can’t afford $50 per month?
• Can other people make contributions to my baby’s NextGen account?
Miscellaneous
• I am the account owner but I want someone else to be able to cal and ask questions about the account, is that possible?
• What is the Initial Matching Grant? Can my baby get that grant too?
Section One
Who is the Participant?
The participant is the individual who will open and own the NextGen account on behalf of the baby receiving the Alfond Grant. The participant (account owner) must be at least 18 years of age and have a social security number or valid taxpayer identification number. There may only be one owner for each NextGen account; there is no joint ownership. Anyone can open a NextGen account regardless of residency or income.
Why do you need the personal information asked for on the application?
When you open a NextGen account you are opening an investment account. Federal law and program manager Merrill Lynch's internal poilcies require that certain information be provided by the participant opening an investment account. This information is used to verify your identity for the program manager's records.**
What is Estimated Household Net Worth?
For purposes of this application, estimated household net worth is an estimate of the value of all of your property (assets) minus your debt (what you owe). In other words, if you sold everything you own (assets) and then paid off everything you owe (debt), what would you have left? Please respond with an estimate or a range if you don’t know the exact figure, such as between $5,000 – $10,000. You may enter zero, but not a negative number.
What are Financial Institutions?
For purposes of this application, financial institutions generally include banks, credit unions, securities dealers, or other places where you have accounts such as savings, checking, money market or investment accounts.
Why would I name a Successor Participant?
You may name a successor participant to indicate who you would want to own your NextGen account in the event of your death or incapacity.
Section Two
Who is the Designated Beneficiary?
The beneficiary is the baby for whom the Alfond Grant is intended.
Section Four
Under Employment Information, what if I am unemployed and/or have no income?
You would check off “Not Employed.” If you have no income, enter zero in annual salary. If you receive State aid, please enter the amount in annual salary.
Who is considered a “control person” or an “insider” of a publicly traded company?
You must answer yes or no to this question. A "control person" is generally someone who has the ability to influence management decisions of a publicly-traded company. Control persons can include senior managers, members of a company's board of directors, its officers such as the CEO and CFO, or owners of more than 10% of the company's outstanding stock (and family members or close associates of these groups). An "insider" is someone who has knowledge of, or access to, valuable nonpublic information about a publicly-traded company, such as members of a company's board of directors and its officers. Owners of more than 10% of the company's outstanding stock are also typically considered insiders.
What if I don’t know my retirement date?
If you are unsure of when you will retire, please provide an estimated date of retirement.
What is Annual Salary?
Annual salary is your individual gross (pre-tax) annual income. You may enter an exact dollar figure or a range, such as $15,000 – $20,000. You may enter zero if you do not have income. If you receive state aid, please include that amount here.
What is Household Income?
Household income is the gross annual income of all employed persons in your household. You may enter an estimate or a range, such as $30,000 - $40,000. You may enter zero if no one in the household has any income. If you receive state aid, please include that amount here.
How do I answer the employment section for the beneficiary if the beneficiary is a baby?
Leave this section blank for baby beneficiaries.
Section Six
Why am I asked about Participant Investing Information?
Federal regulations require this information for suitability purposes.
What is Primary Investment Objective?
This question is asking what you hope to accomplish by investing. NextGen was established to provide an investment opportunity to save for future college expenses.
What is Risk Tolerance?
Risk tolerance is how much or how little risk you are prepared to take with the money you invest (not the grant money). You must check the one box which best describes your personal risk tolerance as an investor.
Please remember there's always the potential of losing money when you invest in securities.
What is Trading Experience and Trading Frequency?
Unless you have trading experience with stocks, bonds, mutual funds or any of the other investment products listed, you should select “None” and skip the remaining questions in Section Six. If you have some trading experience you will be able to answer the remaining questions.
Section Seven
What portfolio is the Alfond Grant invested in?
The Alfond Scholarship Foundation selects the portfolio in which the Alfond Grant is invested. Currently all Alfond Grants are invested in the appropriate BlackRock Age-Based Portfolio, based on the age of the beneficiary.
Why do I need to choose Investment Portfolio(s)?
Although you cannot direct how the Alfond Grant is invested, you must choose an investment option(s) for any contributions you choose to make to the account. You may choose to invest in more than one portfolio, but the total allocation for the portfolios you select must equal 100%. The NextGen Client Direct Series Program Description and Participation Agreement describes each portfolio in more detail. For more information, read the Program Description or call FAME at 800-228-3734.
What happens if I do not select a portfolio?
A NextGen Client Direct Series account application submitted to obtain the Alfond Grant will be accepted without investment options(s) selected. However, any contributions received with the application or subsequent contributions made will be allocated 100% to the appropriate BlackRock Age-Based Portfolio, based on the age of the beneficiary, unless and until a different investment allocation is directed.
Can I change my mind and select a different set of portfolios for my own contributions after I have submitted my application?
Yes. Account owners can change the portfolio selection for previous contributions once per calendar year, or upon the change of a Designated Beneficiary. Changes to investment options for future contributions can be made at any time.
Section Eight
Do I have to make a contribution (send in money) to open my NextGen account and receive the Alfond Grant?
No. If the beneficiary is eligible for the Alfond Grant, an initial contribution is not required to open the NextGen account. No additional money to the account is required, although investing in your child’s future is encouraged. You may leave this section blank, but be sure to sign the Alfond Section on the Addendum to the Account Application.
If you wish, you may add money anytime to the account, including when you send in the application. Simply submit your check with the application and check box 8a, writing in the dollar amount of the contribution.
Section Ten and Eleven
What is “Automated Funding Services”?
This service allows you to make automatic electronic contributions to your NextGen account from your bank account or through payroll direct deposit (also known as payroll deduction – Section 11).
If you wish to fund your account through automatic contributions from a bank account, check box (b) and complete Section 10 of the application.
If you wish to fund your account through payroll direct deposit, check box (c) and complete Section 11 of the application.
What is the minimum amount I have to contribute if I want to use Automated Funding Services?
The minimum is $50 per month for each NextGen account you are funding. If you make contributions through payroll direct deposit the minimum is determined by paycheck ($12.50 if you are paid weekly or $25 if you are paid every two weeks).
What if I want to make contributions, but can’t afford $50 per month?
You can send checks made payable to “NextGen FBO (child’s name)” anytime when you have a full $50 or more to contribute. Contribution coupons are available to make it easy for you and family members to make contributions to your NextGen account.
Can other people make contributions to my child’s NextGen account?
Anyone can make a contribution into your NextGen account. The account owner’s name, beneficiary’s name and account number are needed to complete the contribution coupon.
I am the account owner but I want someone else to be able to call and ask questions about the account. Is that possible?
Yes. In order to share information with others regarding your NextGen account, you need to complete the authorization on section 3 of the Addendum to the Account Application. You must include the name, date of birth and last four digits of the social security number for the person with whom FAME has permission to speak. Anyone you authorize may not direct account transactions.
What is the Initial Matching Grant? Can my baby get that grant too?
The Initial Matching Grant is a one-time $200 grant available to Maine residents to start a NextGen account with a contribution of $50. To qualify, either the NextGen account owner or the beneficiary must be a Maine resident and the account owner’s family adjusted gross income in the previous year was $75,000 or less. No beneficiary may receive both the Alfond Grant and the Initial Matching Grant. However, many families open NextGen accounts for their baby’s siblings using the Initial Matching Grant.
Please remember there's always the potential of losing money when you invest in securities. For more informatoin on the NextGen Client Direct Series, please read the Program Description.
* The NextGen College Investing Plan is offered in two separate series, the Client Direct Series and the Client Select Series, each with its own sales charges, if any, expense structures and investment options. The Client Select Series is available by contacting a Merrill Lynch Financial Advisor, or through certain Maine Distribution agents. Click here for a list of options.
** Merrill Lynch conducts additional due diligence on all participants or other authorized parties to an account and may, at its discretion, elect not to accept an account or terminate an account previously accepted as a result of this additional due diligence at any time for any reason.