The Virginia College Savings Plan’s (VA529’s) Annual Comprehensive Financial Report for the year ended June 30, 2022 contains the audited financial statements, notes thereto, required supplementary information and a letter of transmittal. The report is prepared in accordance with generally accepted accounting principles and should be read in its entirety as each component is an integral part of the overall report.

VA529 has multiple statutory mandates and missions, all centered on financial wellness and preparation for the future, which include education savings; access, affordability & attainment; savings for disability-related expenses and, most recently added, private retirement savings. VA529’s education savings programs include the Defined Benefit 529 Program (legacy Prepaid529SM and the Invest529SM Tuition Track Portfolio), Invest529SM, and CollegeAmerica®. VA529 meets it mission to help make college more affordable and accessible to ALL Virginians through its access and affordability initiative, which started twelve years ago with SOAR Virginia® and has expanded in recent years to provide funding to a variety of mentoring, coaching, workforce development, and scholarship programs throughout the Commonwealth.

VA529 opened the ABLEnow® program in 2016 and ABLEAmerica® in 2019 to provide tax-advantaged savings options to individuals with disabilities, which are direct-sold and advisor-sold programs, respectively. VA529 is in the early stages of developing its retirement program, which will be an automatic-enrollment individual retirement account (IRA) program, anticipated to launch in 2023.

The closed Prepaid529 program sold contracts at actuarially-determined prices which cover future payouts of undergraduate tuition and mandatory fees for the normal full-time course load for students enrolled in a general course of study at any Virginia public higher education institution. Payouts differ at private and out-of-state institutions. Unit pricing for the successor program, the Tuition Track Portfolio, is based on enrollment-weighted average tuition price (Average Tuition) of all Virginia’s four-year public institutions at the time of purchase. At matriculation, the units are paid out at average tuition at the time of withdrawal, regardless of the institution attended. As of June 30, 2022, the Defined Benefit 529 Program was 187.5 percent funded on an actuarial basis.

Invest529 is a direct-sold defined contribution savings program, which allows participants to make contributions into their selected investment portfolio(s). CollegeAmerica, a broker-sold savings option managed by the Capital Group®, is also a defined contribution savings program that offers 46 different American Funds® mutual fund options. Both Invest529 and CollegeAmerica participants bear all market risk for their investment, including the potential loss of principal.

VA529 invests funds pursuant to statute and its Investment Policies and Guidelines under the direction of its Board and Investment Advisory Committee in a mix of equity, fixed income and alternative investments. VA529 remains optimistic that its asset allocation and investment strategies will result in DB529 meeting or exceeding long-term performance expectations. As of June 30, 2022, the total return since inception was about 6.15 percent net of fees and reflects DB529’s -5.35 percent overall performance during fiscal 2022.

VA529 has assumed a long-term investment return rate of 5.5 percent for DB529. VA529 projects Average Tuition increases at Virginia’s public higher education institutions of 4.0 percent for the next academic year beginning Fall 2023 and 6.0 for academic years thereafter. VA529 projects that Virginia’s public community colleges will increase Average Tuition by 2.0 percent for the next academic year and 4.0 percent annually thereafter. These assumptions were established for the June 30, 2022 DB529 actuarial valuation. Any changes in public education funding that result in tuition increases above VA529’s projections would have an immediate, detrimental impact on VA529’s outstanding long-term DB529 obligations. With the statutory requirement that institutions provide updated, long-term tuition projections, VA529 remains in a position to be informed of future tuition and fee increases.

VA529 experienced overall positive account growth in fiscal 2022. Invest529 experienced 11.3 percent gross account growth and added 60,457 new accounts during fiscal year 2022. CollegeAmerica experienced 2.8 percent net account growth during fiscal 2022. ABLEnow and ABLEAmerica experienced 2.4 percent and 55.5 percent net account growth, respectively. ABLEnow and ABLEAmerica ended fiscal 2022 with 12,705 and 1,987 open accounts, respectively.