Application Help

 

These Frequently Asked Questions (FAQ) were developed to assist you in completing the paper-based 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.

 

There is also an application available online. The NextGen® Client Direct Series Account Application is a national application for all people who want to open a NextGen account directly. Not all sections on the application are required to obtain the $500 Harold Alfond® College Challenge Grant.

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 awarded 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.

 

How can I get help to complete the application?

•    Contact the 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
     •    Jessica Whittier, Southern and Western Maine, 800-228-3734, ext. 3555

•    See Frequently Asked Questions below

What is NextGen?

NextGen is the name of Maine’s college savings plan (also known as a Section 529 plan). Section 529 refers to the section of the Internal Revenue Code that provides unique tax advantages and other special features to encourage families to invest for college. Just as some retirement plans are referred to as 401(k) plans, college savings plans, such as NextGen®, are referred to as 529 plans. A Section 529 plan provides a tax advantaged way to invest for college and is designed to help families prepare for future college costs. The Finance Authority of Maine (FAME) is the administrator of NextGen® and has contracted with Merrill Lynch to be the NextGen® Program Manager and underwriter. 

 

Is this too good to be true?

It is true. This $500 Alfond Grant 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 recognized that one of the biggest barriers to attending college is cost. So he created this gift as a great start to help families invest for college early. He believed that you could transform individual families and the State’s future prosperity by helping all Maine’s children aspire to higher education.
It is true, every Maine resident baby may receive $500 to open a NextGen® account. To receive the grant, a NextGen® account has to be opened by the baby's first birthday. And, it is also true that you do not need to add any of your own money to open your baby's NextGen® account, but Mr. Alfond's hope was that families would invest in their own child's future.

FREQUENTLY ASKED QUESTIONS for the NextGen® Client Direct Series Account Application (and $500 Harold Alfond® College Challenge Grant)

Section 1

•    Who is the Participant?  
•    Why do you need the personal information asked for on the application?  

•    Under Employment Information, what if I have no income?  
•    What is Annual Salary?
•    What is Household Income?

•    What is Estimated Household Net Worth?

•    What are Financial Services Firms?

 

•    Who is considered a “control person” or an “insider” of a publicly traded company?

Section 2

•    Who is the Designated Beneficiary?

•    How do I answer the employment section for the beneficiary if the beneficiary is a baby?

Section 3

•    Why am I asked about Account Owner Investment Information?
•    What is Primary Investment Objective?
•    What is Risk Tolerance?
•    What is Trading Experience and Trading Frequency?

Section 4

•    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 portfolio(s) for my own contributions after I’ve sent in my application?  

 

Section 5

•    Do I have to make a contribution (send in money) to open my NextGen account and receive the Alfond Grant?

 

Section 6

•    What is “Automated Funding"?
•    What is the minimum amount I have to contribute if I want to use Automated Funding?  
•    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?  

 

Section 7

•    Resident Alien or Non-US Citizen information.

 

Section 8

•    Why would I name a Successor Participant?
•    What if I would like to have a duplicate account statment to a third Party?

Miscellaneous

•    I am the account owner but I want someone else to be able to call and ask questions about the account. Is that possible?
•    What is the Initial Matching Grant? Can my baby get that grant too?  

Section 1

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 have a valid social security number or valid taxpayer identification number. There may only be one owner for each NextGen account; there is no joint ownership. Anyone at least 18 years of age 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. Certain information must be provided by the participant opening an investment account. This information is used to verify your identity for the program manager's records.**

 

Under Employment Information, what if I am unemployed and/or have no income?

You would check off “Not Employed.” If you have no income, check the appropriate box ($0 - $24,999). If you receive State aid, please check the appropriate box.

 

 

What is Estimated Household Net Worth?

For purposes of this application, estimated household net worth is an estimate of the value of all 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? Do not include your primary residence in your estimate.

 

 

What is Annual Salary?

Annual salary is your individual gross (pre-tax) annual 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 including yourself. If someone in the household receives State aid, please include that amount here.

 

What is a Financial Services Firm?

For purposes of this application, financial services generally include banks, credit unions, securities dealers, or other places where you have accounts such as savings, checking, money market or investment accounts.

 

Who is considered a “control person” or an “insider” of a publicly traded company?

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. 

 

Section 2

Who is the Designated Beneficiary?

The beneficiary is the baby for whom the Alfond Grant is intended. Remember, the baby must be a Maine resident under the age of one when the account is opened.

 

 

How do I answer the employment section for the beneficiary if the beneficiary is a baby? 

Leave this section blank for baby beneficiaries.

 

Section 3

Why am I asked about Account Owner Investment 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 opportunity to invest for future college expenses. Most NextGen® investors seek total return. 

 

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 box which best describes your personal risk tolerance as an investor.

Agressive. An aggressive investor is willing to accept the risk of losing some of the investment in exchange for the possibility of earning higher returns.

Moderate. A moderate investor is one who is willing to accept some risk in exchange for a potential higher rate of return.

Conservative. A conservative investor is less willing to accept risk in exchange for a potential lower rate of return.

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” for the remaining questions in Section three. If you have some trading experience you will be able to answer the remaining questions.

 

Section 4

What portfolio is the Alfond Grant invested in?

The Alfond Scholarship Foundation selects the portfolio in which the Alfond Grant is invested. You cannot control or direct the investment of the grant. Currently all Alfond Grants are invested in the appropriate BlackRock Age-Based Portfolios, 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 choose an investment option(s) for any contributions that are made 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? 

If a NextGen Client Direct Series paper account application is submitted to obtain the Alfond Grant, the application 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 iShares 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 existing 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 5

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 at any time, 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 to add money to the account when you send in the application. Simply submit your check with the application and complete section 5, writing in the dollar amount of the contribution.

Section 6

What is “Automated Funding?” 

Automated Funding 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).   
If you wish to fund your account through automatic contributions from a bank account, check the box in Section 6 and complete the required information.


If you wish to fund your account through payroll deduction, complete the bottom of Section 6 of the application.

 

There is an $50 Automated Funding Grant available to certain Maine accounts, learn more...

 

What is the minimum amount I have to contribute if I want to use Automated Funding?

The minimum is $25 per month in the Client Direct Series or $50 in the Client Select Series for each NextGen® account you are funding.   

 

What if I want to make contributions, but can’t afford $25 or $50 per month? 

You can send checks made payable to “NextGen FBO (child’s name)” anytime when you have a full $25 or $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.  

 

Other Matching Grants may be available, learn more...

 

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.

Non-NextGen account owners who make contributions acknowledge that they will have no subsequent control over the funds contributed to a NextGen® account. See more details on the reverse side of the contribution coupon. 

 

Other Matching Grants may be available, learn more...

 

Section 7

Resident Alien or Non-US Citizen Information

You must complete this section if the account owner of the account beneficiary is a resident alien or not a US citizen.

Section 8

Why would I name a Successor Participant?

Name a successor participant to indicate who you would want to own your NextGen® account in the event of your death or incapacity.


What if I would like to have a duplicate account statment to a third Party?

Name a party to receive duplicate NextGen® account statement. This person is not authorized to access your account information. The party can not initiate, approve or authorize any transactions or change the account.

 

Miscellaneous

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 authorize FAME to share information with others regarding your NextGen account, you need to complete the authorization on 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 FAME to share information with 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 certain Maine accounts to start a NextGen® account with a contribution of $50. 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. Learn more...

  

 

** Merrill Lynch conducts additional due diligence on all participants or other authorized parties to an account and may, at its discretion, elect to not accept an account or terminate an account previously accepted as a result of this additional due diligence at any time for any reason.