NM-529 MM11020 Scholar's Edge Plan Agreement IIM Added Distill.pdf

Scholarsedge529.com

Effective February 2, 2024

Scholar’s Edge

529

Plan Description and

Participation Agreement

Scholarsedge529.com

This Plan Description and Participation Agreement for Scholar’s Edge 529® (Scholar’s Edge or the

Plan) has been identified by the Plan as the Offering Materials intended to provide substantive

disclosure of the terms and conditions of an investment in the Plan. This Plan Description and

Participation Agreement does not constitute an offer to sell or the solicitation of an offer to buy any

security other than an investment in the Plan offered hereby, nor does it constitute an offer to sell or

the solicitation to any person in any jurisdiction or under any circumstances in which it would be

unlawful.

No security issued by the Plan has been registered with or approved by the United States Securities

and Exchange Commission or any state securities commission. Further, this Plan Description and

Participation Agreement is not subject to oversight by the Financial Industry Regulatory Authority

(FINRA) or the Municipal Securities Rulemaking Board (MSRB).

The information contained in this Plan Description and Participation Agreement is believed to be

accurate as of the date above and is subject to change without prior notice. Account Owners should

rely only on the information contained in the Plan Description and Participation Agreement. No one

is authorized to provide information about Scholar’s Edge that is different from the information

contained in the Plan Description and Participation Agreement. Please visit our website,

scholarsedge529.com, for the most current Plan Description and Participation Agreement.

If you are not a New Mexico taxpayer, you should consider before investing whether your or the

Beneficiary’s home state offers a 529 plan that provides its taxpayers with favorable state tax and

other benefits such as financial aid, scholarship funds, and protection from creditors that may only

be available through an investment in the home state’s 529 plan, and which are not available

through an investment in the Plan. Therefore, please consult your financial, tax, or other advisor to

learn more about how state-based benefits (or any limitations) would apply to your specific

circumstances. Keep in mind that state-based benefits should be one of the many appropriately

weighted factors to be considered when making an investment decision.

You should periodically access and, if appropriate, adjust your investment choices with your time

horizon, risk tolerance, and investment objectives in mind. Investing is an important decision. Please

read the Plan Description and Participation Agreement and the Enrollment Form in their entirety

before making an investment decision.

The Plan cannot and does not provide legal, financial, or tax advice and the following information

should not be construed as such with respect to the consequences for any particular individual as a

result of contributions to or distributions from a Plan account.

Section 529 plans are intended to be used only to save for qualified expenses. The Plan is not

intended to be used, nor should it be used, by any taxpayer for the purpose of evading U.S. federal or

state taxes or tax penalties. You may wish to seek tax advice from an independent tax advisor based

on your own particular circumstances.

Capitalized terms used in this Plan Description and Participation Agreement are defined throughout

the document and in the Glossary starting on page 10.

Scholarsedge529.com

This Plan Description and Participation Agreement describes the terms of your Account with

Scholar’s Edge. You should read it before you open your Account.

Getting Started ............................................................................................................................ 4

Summary ..................................................................................................................................... 5

Glossary .................................................................................................................................... 10

How You Participate ................................................................................................................. 17

How To Take a Distribution from Your Account ..................................................................... 27

Maintaining Your Account ....................................................................................................... 31

Fees and Charges ...................................................................................................................... 35

Important Risks You Should Consider ..................................................................................... 54

Investment Information ............................................................................................................. 59

Investment Performance ........................................................................................................... 73

Important Tax Information ....................................................................................................... 79

General Information .................................................................................................................. 84

Plan Governance ....................................................................................................................... 88

Participation Agreement ........................................................................................................... 90

Appendix A: Additional Underlying Investment Information .................................................. 96

What’s Inside

Scholarsedge529.com

Getting started with Scholar’s Edge is easy. Just follow these steps:

1. Read this Plan Description and Participation Agreement in its entirety and save it for future

reference. It contains important information you should review before opening an Account,

including information about the benefits and risks of investing.

2. Gather your personal information:

(a) Your Social Security Number or Tax Identification Number

(b) Your Permanent Address (not a post office box)

(d) Your email address

(e) Your checking or savings account number and your bank’s routing number (if you want to

contribute electronically with a bank transfer)

3. Work with your Financial Professional to complete your Enrollment Form.

4. Instruct your Financial Professional to submit your Enrollment Form to the Plan on your behalf.

Online: scholarsedge529.com

Phone: 1.866.529.SAVE (1.866.529.7283)

Monday through Friday, 8 a.m. to 7 p.m. Mountain Time

Regular Mail: Scholar’s Edge

P.O. Box 219798

Kansas City, MO 64121-9798

Priority Delivery: Scholar’s Edge

1001 E 101

Terrace, Suite 220

Kansas City, MO 64131

Getting Started

Scholarsedge529.com

About Scholar’s Edge

Scholar’s Edge is a Section 529 plan offered by The Education Trust Board of New Mexico

(the Board or Trustee). Scholar’s Edge is designed to help individuals and families save for

education goals in a tax-advantaged way and offers valuable advantages including tax-

deferred growth, generous contribution limits, attractive Investment Portfolios, and

professional investment management.

Ascensus College Savings Recordkeeping Services, LLC, as the Program Manager, is

responsible for the day-to- day operations of the Plan. Principal Global Investors, LLC (PGI

or Principal), as the investment advisor to the Plan, provides investment management

services to the Plan. Principal Funds Distributor, Inc. (PFD) serves as the distributor of the

Plan.

Effective June 16, 2023, due to recent legislation in New Mexico, which fully aligned New

Mexico with all Federal IRC Section 529 uses, residents of the state of New Mexico with an

in-state 529 plan can use the assets in their Account for the following, which will now be

considered a qualified use for New Mexico tax purposes:

1. Toward the costs of nearly any public or private, 2-year or 4-year college

nationwide, as long as the student (Beneficiary) is enrolled in a U.S.-accredited

college, university, graduate school, or technical school that is eligible to

participate in U.S. Department of Education student financial aid programs.

2. To pay tuition expenses at a public, private or religious elementary or

secondary school up to $10,000 per student per year.

3. To pay certain expenses required for a registered apprenticeship program.

4. For payments towards qualified education loans up to a $10,000 lifetime limit

per individual.

Deductions from State income taxes for contributions which are used for these purposes will

not be subject to recapture after June 16, 2023, as had previously been the case.

Scholar’s Edge is offered only through certain broker-dealers and properly licensed

investment advisers (Financial Advisers). If you do not wish to work with a Financial

Adviser, the Board also offers a direct-to-consumer Section 529 plan, The Education Plan.

Go to theeducationplan.com for more information about The Education Plan.

What’s Inside

Glossary

p. 10-16

This section provides definitions of terms contained in this Plan Description and Participation

Agreement. Note that terms defined in the glossary (other than you and your) appear with initial

capital letters when referenced in this document.

Summary

Scholarsedge529.com

How You Participate

p. 17-26

If you are interested in opening an Account in Scholar’s Edge, you must utilize the services

of a Financial Professional. Your Financial Professional can help you open an Account and

determine which Investment Portfolios best meet your savings goals.

Scholar’s Edge is open to U.S. citizens or resident aliens throughout the United States. You,

as the Account Owner, maintain complete control over the Account and can open Accounts

for any number of Beneficiaries, including yourself. This section will guide you through the

details of opening an Account in Scholar’s Edge, contributing to your Account, maintaining

your Account, using your savings to pay for Qualified Expenses, and closing your Account.

To open an Account, your Financial Professional will work with you to complete an

Enrollment Form, which is a contract between you, as the Account Owner, and the Board,

establishing the obligations of each.

This section also highlights the many ways you can contribute to your Account, including

Recurring Contributions, Electronic Funds Transfer, and rollovers from an account with

another Qualified Tuition Program. See pages 79-83 for information regarding the impact of

New Mexico state and U.S. federal tax considerations regarding rollovers into your Account.

How to Take a Distribution from Your Account

p. 27-30

This section discusses the different ways you can withdraw funds from your Account. You

can have a withdrawal paid directly to you, as the Account Owner, to the Beneficiary or to

an Eligible Educational Institution. A withdrawal to pay K-12 Tuition is only payable to the

Account Owner.

This section also describes the difference between Qualified Distributions, Non-Qualified

Distributions, and other types of withdrawals (for example, when the Beneficiary receives a

scholarship, or is unable to attend school due to a Disability). There can be U.S. federal and

state tax impacts of taking a withdrawal. It is important to discuss withdrawals with a tax

advisor to ensure you understand your particular situation.

Maintaining Your Account

p. 31-34

This section provides information on various Account maintenance issues such as your

Account statements, changing Beneficiaries, and changing your Investment Portfolios. You

can change Investment Portfolios up to two times per year and with a permissible change of

Beneficiary. The twice per year limitation applies in the aggregate across all of your accounts

for the same Beneficiary under all Qualified Tuition Programs sponsored by the State of New

Mexico.

Fees and Charges

p. 35-53

Scholar’s Edge currently offers three Unit Classes for each Investment Portfolio: Class A

Units, Class C Units, and Class R Units. Each Unit Class has its own Fee structure. You

should ask your Financial Professional to assist you in choosing the Unit Class that best

meets your goals. Class R Units may not be available to you. Class R Units are designed for

Scholarsedge529.com

use in fee-based accounts through qualified registered investment advisors or selling agents

who buy through a broker/dealer in advisory accounts. Class R Units may be sold by selling

agents that charge brokerage commissions and other transaction-related fees directly to their

clients.

Sales Charges –

• Class A: Class A Units are subject to a maximum initial sales charge of 3.50% of the

amount invested.

• Class C: Class C Units are subject to a contingent deferred sales charge (CDSC) of

1.00% if they are redeemed within one year of purchase.

• Class R: Class R Units are not subject to any sales charges.

Annual Account Maintenance Fee. All Unit Classes are subject to the Annual Account

Maintenance Fee of $20, which is waived if the Account balance is at least $25,000, if you

or your Beneficiary is a New Mexico Resident, or if you make Recurring Contributions of at

least $25 per month or $75 per quarter.

Total Annual Asset-Based Fee. Each Unit Class for each Investment Portfolio is subject to

certain annual asset- based Fees. The Total Annual Asset-Based Fee is the sum of Underlying

Investment Expenses, the Program Management Fee, and the Board Administrative Fee. For

Class A and Class C Units, the Total Annual Asset- Based Fee also includes the Distribution

and Service Fee. See Fees and Charges – Total Annual Asset-Based Fee beginning on page

35 for the range of Total Annual Asset-Based Fees for each Unit Class.

Automatic Conversion of Class C Units. Class C Units are automatically converted into

Class A Units five years after the date of purchase. The automatic conversions are not subject

to any initial sales charges or CDSCs.

Important Risks You Should Consider

p. 54-58

As with any investment, there are risks involved in investing in Scholar’s Edge, including

the risk of investment losses; the risk of changes in U.S. federal and state laws, including

U.S. federal and state tax laws; and the risk of Plan changes, as well as other risks. You

should be aware that the Board may change components of the Plan at any time. For

example, the Board may, without prior notice, change the Plan’s Fees, add or remove a

Portfolio, change a Portfolio’s Underlying Investment(s), close a Portfolio to new investors

and/or new contributions, or change the Program Manager or other Plan service provider.

To learn more about the risks, please thoroughly read and carefully consider the information

in this section and throughout this Plan Description and Participation Agreement, and ask your

tax, legal, and investment advisors about these risks.

Investment Information

p. 59-72

When you enroll in Scholar’s Edge, you choose to invest using at least one of three different

investment approaches, based upon your investing preferences and risk tolerance. You can

choose between the Year of Enrollment Portfolios, the Target Risk Portfolios, the Individual

Portfolios, or a mix of all three. Your investment returns will vary depending upon the

performance of the Portfolios you choose. Depending on market conditions and other factors,

you could lose all or a portion of your investment.

Year of Enrollment Portfolios

Scholarsedge529.com

This option includes Portfolios that automatically move to progressively more conservative

investments as the Portfolios approach their target enrollment dates. There are eleven (11)

Year of Enrollment Portfolios. These Portfolios invest in certain Underlying Funds currently

managed by Principal, BlackRock, Vanguard, and JPMorgan. These Portfolios also invest in

the Scholar’s Edge Guaranteed Contract, which is a funding agreement issued by Principal

Life.

Target Risk Portfolios

This option includes four (4) Portfolios, each with an investment objective and strategy

based on a target risk level and asset allocation that remains fixed over time. Each Portfolio

may invest in certain Underlying Funds currently managed by Principal, BlackRock,

Vanguard, or JPMorgan. Certain of these Portfolios also invest in the Scholar’s Edge

Guaranteed Contract which is a funding agreement issued by Principal Life.

Individual Portfolios

This option includes fifteen (15) Portfolios. Each Portfolio, except one, invests in an

Underlying Fund that primarily invests in U.S. equity, international equity, real estate, or

fixed income investments. The Underlying Funds are currently managed by Principal,

BlackRock, Vanguard, JPMorgan, and New York Life. The other Portfolio in this option

invests in the Scholar’s Edge Guaranteed Contract issued by Principal Life.

The Portfolios’ Underlying Investments are subject to change. There is no guarantee that the

current Investment Managers will manage any Underlying Fund of any Portfolio in the

future, or that any Portfolio will invest in a funding agreement issued by Principal Life.

Investment Performance

p. 73-78

This section discusses the performance of the Investment Portfolios in the Plan. Performance

data represents past performance, which is not a guarantee of future results. Investment

returns and principal value will fluctuate, so your Units, when sold, may be worth more or

less than their original cost. For up-to-date price and performance information, go to

scholarsedge529.com or call us at 1.866.529.7283.

Important Tax Information

p. 79-83

This section discusses both the New Mexico state and U.S. federal tax benefits for an

investment in Scholar’s Edge.

Contributions to your Account are eligible for a New Mexico income tax deduction if you

are a New Mexico taxpayer (resident or non-resident) filing a single or joint return. You (as

the Account Owner) may be subject to a recapture of this New Mexico tax deduction in

certain situations.

General Information

p. 84-87

In this section, you will learn about the rights and obligations associated with your Account;

considerations related to changes to your Account, this document, and state and federal laws;

and claims against your Account.

Plan Governance

p. 88-89

Scholarsedge529.com

This section summarizes the administration of Scholar’s Edge.

Participation Agreement

p. 90-94

This section reviews your rights and responsibilities in connection with your enrollment in

Scholar’s Edge. You must review this agreement in detail prior to completing an Enrollment

in the Plan. You will be required to sign an acknowledgement of your understanding of and

agreement with the terms, conditions, and information contained in the Plan Description and

Participation Agreement.

Appendix A: Additional Underlying Investment Information

p. 96-125

The information in the Appendix provides additional information about the Portfolios’

Underlying Investments. The Appendix includes information about the Underlying Funds’

investment objectives, principal investment strategies, and principal risks. The Appendix

also includes information about the Scholar’s Edge Guaranteed Contract.

Scholarsedge529.com

Defined terms used in this Plan Description and Participation Agreement have the following

meanings:

ABLE Rollover Distribution: A distribution to an account in a Qualified ABLE Program for the

same Beneficiary or a Member of the Family of the Beneficiary. Any distribution must be made

before January 1, 2026, and cannot exceed the annual contribution limit prescribed by Section

529A(b)(2)(B)(i) of the Code, $18,000 for 2024, subject to adjustment by the IRS.

Account: An account in Scholar’s Edge established by an Account Owner for a Beneficiary.

Account Owner or you: An individual 18 years or older, an emancipated minor (as determined by

New Mexico law), a trust, an estate, a partnership, an association, a company, a corporation, or a

qualified custodian under the UGMA/UTMA, who signs an Enrollment Form establishing an

Account. In certain cases, the Account Owner and Beneficiary may be the same person. An

individual seeking to open an Account as an emancipated minor must submit a court order as well

as any other documentation that we request, establishing that he or she is empowered to enter into a

contract without the ability to revoke a contract based on age. Without such documentation, we will

not open an Account for an emancipated minor.

Annual Account Maintenance Fee: An annual fee charged to each Account. The fee is waived if the

Account balance is at least $25,000, if you or your Beneficiary is a New Mexico Resident, or if you

make Recurring Contributions of at least $25 per month or $75 per quarter.

Apprenticeship Expenses: Expenses for fees, books, supplies, and equipment required for the

participation of a Designated Beneficiary in an apprenticeship program registered and certified with

the Secretary of Labor under section 1 of the National Apprenticeship Act.

Beneficiary: The individual designated by an Account Owner, or as otherwise provided in writing to

Scholar’s Edge, to receive the benefit of an Account.

BlackRock: BlackRock Fund Advisors, the Investment Manager of the iShares Underlying Funds.

Board: The Education Trust Board of New Mexico.

Code: Internal Revenue Code of 1986, as amended. There are references to various Sections of the

Code throughout this Plan Description and Participation Agreement, including Section 529 as it

currently exists and as it may subsequently be amended, and any regulations adopted under it.

Custodian: The individual who opens an Account on behalf of a minor Beneficiary with assets from

an UGMA/ UTMA account. Generally, the Custodian will be required to perform all duties of the

Account Owner with regard to the Account until the Account Owner attains the age at which the

custodianship terminates under the applicable UGMA/UTMA law (usually 18 or 21), is otherwise

emancipated, or the Custodian is released or replaced by a valid court order. The Custodian of an

Account funded from an UGMA/UTMA account may not change the Account Owner or

Beneficiary.

Glossary

Scholarsedge529.com

Dealer: A distributor of Scholar’s Edge who is registered as a broker-dealer under the Securities

Exchange Act of 1934, as amended, and a member of both FINRA and the MSRB.

Declaration of Trust: The Declaration of Trust establishing the Trust as may be amended from time

to time by the Board.

Distribution and Service Fee: A fee charged to support the distribution and marketing of the Plan. A

portion of this Fee may be redistributed to Dealers.

Distribution Tax: A U.S. federal surtax required by the Code that is equal to 10% of the earnings

portion of a Non- Qualified Distribution.

Disabled or Disability: Condition of a Beneficiary who is unable to do any substantial gainful

activity because of any medically determinable physical or mental impairment which can be

expected to result in death or to be of long-continued and indefinite duration. We will require

medical documentation to verify this condition. See IRS Publication 970 available at

https://www.irs.gov/forms-pubs/about-publication-970 for further details.

Educational Assistance: Educational Assistance generally refers to the tax-free portion of any

scholarships or fellowships, Pell Grants, employer provided educational assistance, veterans

education assistance, and other tax-free educational assistance. See IRS Publication 970 online at

https://www.irs.gov/forms-pubs/about-publication-970 for more information.

EFT or Electronic Funds Transfer: A service in which an Account Owner authorizes Scholar’s Edge

to transfer money from a bank or other financial institution to an Account in Scholar’s Edge.

Eligible Educational Institution: An institution as defined in Section 529(e) of the Code. Generally,

the term includes accredited post-secondary educational institutions or vocational schools in the

United States and some accredited post-secondary educational institutions or vocational schools

abroad offering credit toward a bachelor’s degree, an associate’s degree, a graduate level or

professional degree, or another recognized post-secondary credential. The institution must be

eligible to participate in a student financial aid program under Title IV of the Higher Education Act

of 1965 (20 U.S.C. § 1088). You can generally determine if a school is an Eligible Education

Institution by searching for its Federal School Code (identification number for schools eligible for

Title IV financial aid programs) at: https://studentaid.gov/sa/fafsa.

Enabling Legislation: The law that established the Trust and its Board (The Education Trust Act,

Chapter 21, Article 21K NMSA 1978).

Enrollment Form: A participation agreement between an Account Owner and the Trust, establishing

the obligations of each and prepared in accordance with the provisions of Scholar’s Edge. The term

“Enrollment Form” also includes any application used by a selling agent to establish an Account in

the Plan for an Account Owner.

Fees: Fees, costs, expenses, and charges associated with Scholar’s Edge.

Financial Professional: Certain broker-dealers, financial professional, or properly licensed

investment advisors that offer Scholar’s Edge to investors.

IRS: Internal Revenue Service.

Scholarsedge529.com

Investment Portfolio: Each Scholar’s Edge Year of Enrollment Portfolio, Scholar’s Edge Target

Risk, Portfolio, and Individual Portfolio in Scholar’s Edge.

Investment Managers: The investment managers of the Underlying Investment options, which may

change from time to time, and currently include Principal, BlackRock, Vanguard, JPMorgan, and

New York Life, who are the investment managers of their respective Underlying Investments. The

Portfolios’ Underlying Investments are subject to change. There is no guarantee that the current

Investment Managers will manage any Underlying Fund of any Portfolio in the future.

JPMorgan: J.P. Morgan Investment Management Inc., the Investment Manager of the JPMorgan

Underlying Fund.

K-12 Tuition: Expenses for tuition in connection with enrollment or attendance at an elementary or

secondary public, private. or religious school, up to $10,000 per student per taxable year.

Management Agreement: An agreement between the Board and the Program Manager to provide

Scholar’s Edge with program management, investment advisory, recordkeeping, administrative, and

marketing services. The Management Agreement between the Board and Ascensus College Savings

Recordkeeping Services LLC (ACSR) is now effective and will terminate in 2026, unless extended

or earlier terminated as provided in the Management Agreement.

Maximum Account Balance: The maximum aggregate balance of all accounts for the same

Beneficiary in Qualified Tuition Programs sponsored by the State of New Mexico, as established by

the Board from time to time, which will limit the amount of contributions that may be made to

Accounts for any one Beneficiary, as required by Section 529. The current Maximum Account

Balance is $500,000.

Member of the Family: An individual as defined in Section 529(e)(2) of the Code. Generally, this

definition includes a Beneficiary’s immediate family members. A Member of the Family means an

individual who is related to the Beneficiary as follows:

1. A child, a descendent of a child (e.g., grandchildren), or a stepchild;

2. A sibling, stepsibling, or half-sibling;

3. A parent (or ancestor of a parent, e.g., grandparent), or a stepparent;

4. A niece or nephew;

5. An aunt or uncle;

6. A first cousin;

7. A mother- or father-in-law, son- or daughter-in-law, brother- or sister-in-law; or

8. A spouse of any individual listed (except a first cousin).

For purposes of determining who is a Member of the Family, a legally adopted child or a foster child

of an individual is treated as the child of that individual by blood. The terms “brother” and “sister”

include half- brothers and half-sisters.

Scholarsedge529.com

New Mexico Resident: An Account Owner or Beneficiary who has registered a New Mexico

address with the Plan.

New York Life: New York Life Investment Management LLC, the Investment Manager of the

Mainstay Underlying Fund.

Non-Qualified Distributions: A distribution from an Account that is not used to pay for Qualified

Expenses.

Omnibus Account: An account with the Plan held in the name of an Omnibus Service Provider for

the benefit of its customers or the customers of the applicable Dealer.

Omnibus Service Provider: A Dealer or third-party recordkeeping agent that has entered into an

agreement with the Program Manager to perform certain services for Omnibus Accounts.

PFD: Principal Funds Distributor, Inc., the distributor of the Plan.

PGI or Principal: Principal Global Investors, LLC, the investment advisor to the Plan, as well as the

Investment Manager of the Principal Underlying Funds.

Plan Description and Participation Agreement: This document, intended to provide substantive

disclosure of the terms and conditions of an investment in Scholar’s Edge, including any other

Supplements distributed from time to time.

Plan Officials: The State, Scholar’s Edge, the Board, the Trustee, the Trust, any other agency of the

State, the Program Manager (and its affiliates), PGI and PFD (and their affiliates), the Investment

Managers (and their respective affiliates), and any other counsel, advisor, or consultant retained by,

or on behalf of, those entities and any employee, officer, official, or agent of those entities.

Principal Life: Principal Life Insurance Company, the issuer of the Scholar’s Edge Guaranteed

Contract.

Principal Services Agreement: The agreement between the Program Manager and PGI and PFD,

and approved by the Board, pursuant to which PGI and PFD provide investment management and

distribution services, respectively, to Scholar’s Edge. The Principal Services Agreement is now

effective and will terminate in 2026, unless extended or earlier terminated as provided in the

Principal Services Agreement.

Program Management Fee: The annual asset-based Fee paid to the Program Manager for services

provided to the Plan.

Program Manager or Ascensus: Ascensus College Savings Recordkeeping Services, LLC has been

engaged by the Board to provide the program management services, including program

management, investment advisory, recordkeeping, administrative, and marketing services, as an

independent contractor, on behalf of Scholar’s Edge, the Trust, and the Board (as Trustee of the

Trust and administrator of the Plan).

Qualified ABLE Program: A program designed to allow individuals with disabilities to save for

qualified disability expenses. Qualified ABLE Programs are sponsored by states or state agencies

and are authorized by Section 529A of the Code.

Scholarsedge529.com

Qualified Distribution: A distribution from an Account that is used to pay Qualified Expenses of the

Beneficiary.

Qualified Expenses: Qualified education expenses as defined in the Code and as may be further

limited by Scholar’s Edge. Generally, these include the following:

1. Tuition, fees, and the costs of textbooks, supplies, and equipment required for the enrollment

or attendance of a Beneficiary at an Eligible Educational Institution;

2. Certain costs of the room and board of a Beneficiary for any academic period during which

the student is enrolled at least half-time at an Eligible Educational Institution;

3. Expenses for special needs Beneficiaries that are necessary in connection with their

enrollment or attendance at an Eligible Educational Institution;

4. Expenses for the purchase of computer or peripheral equipment (as defined in Section

168(i)(2)(B) of the Code), computer software (as defined in Section 197(e)(3)(B) of the

Code), or Internet access and related services, if the equipment, software, or services are to be

used primarily by the Beneficiary during any of the years the Beneficiary is enrolled at an

Eligible Educational Institution;

5. K-12 Tuition;

6. Apprenticeship Expenses; and

7. Student Loan Payments.

Qualified Tuition Program or 529 plan: A qualified tuition program under Section 529.

Recurring Contribution: Also known as AIP or Automatic Investment Plan. A service in which an

Account Owner authorizes Scholar’s Edge to transfer money, on a regular and predetermined basis,

from a bank or other financial institution to an Account in Scholar’s Edge.

Refunded Distribution: A distribution taken for Qualified Expenses which is later refunded by the

Eligible Educational Institution and recontributed to a Qualified Tuition Program that meets the

following requirements:

1. The recontribution must not exceed the amount of the refund from the Eligible Educational

Institution;

2. The recontribution must not exceed the amount of distributions previously taken to pay the

Qualified Expenses of the Beneficiary;

3. The recontribution must be made to an account in a Qualified Tuition Program of the same

Beneficiary to whom the refund was made; and

4. The funds must be recontributed to a Qualified Tuition Program within 60 days of the date

of the refund from the Eligible Educational Institution.

A Refunded Distribution will not be subject to U.S. federal or New Mexico state income tax,

recapture of the New Mexico state income tax deduction, or the Distribution Tax.

Scholarsedge529.com

Rollover Distribution: A distribution resulting from a change of Beneficiary to another Beneficiary

who is a Member of the Family, either within Scholar’s Edge or between Qualified Tuition

Programs, or a rollover or transfer of assets between Qualified Tuition Programs for the same

Beneficiary, provided another rollover or transfer for the same Beneficiary has not occurred in the

previous twelve (12) months.

Scholar’s Edge or Plan: Scholar’s Edge 529, the 529 plan described in this Plan Description and

Participation Agreement.

Section 529: Section 529 of the Code.

Standing Investment Instruction: The selection made by an Account Owner indicating how

contributions are allocated among Investment Portfolios.

State: The State of New Mexico.

Student Loan Payments: Amounts paid as principal or interest on any qualified education loan of

either the Beneficiary or a sibling of the Beneficiary up to a lifetime limit of $10,000 per individual.

Successor Account Owner: The person named in the Enrollment Form or otherwise in writing to

Scholar’s Edge by the Account Owner, who may exercise the rights of the Account Owner under

Scholar’s Edge if the Account Owner of a funded Account dies. The Successor Account Owner may

be the Beneficiary if the Beneficiary is 18 years or older.

Supplement: An addendum to the Plan Description and Participation Agreement, issued from time

to time.

Trust: The Education Plan Trust of New Mexico created by the Declaration of Trust.

Trusted Contact Person: The person you designate as a contact to address possible financial

exploitation, to confirm the specifics of your current contact information, health status, or the

identity of any legal guardian, executor, trustee, or holder of a power of attorney; or as otherwise

permitted by Financial Industry Regulatory Authority (FINRA) Rule 2165.

Trustee: The Board in its capacity as trustee of the Trust.

UGMA/UTMA: Uniform Gifts to Minors Act / Uniform Transfers to Minors Act.

Underlying Funds or Funds: The mutual funds and exchange-traded funds (ETFs) that are

Underlying Investments of the Portfolios.

Underlying Investments: The Underlying Funds and other assets in which the Portfolios are

invested, including any funding agreements.

Unit or Units: The measurement of your interest in a Portfolio.

Unit Class: A class of Units offered for a Portfolio, either Class A, Class C, or Class R, each having

a different Fee structure.

Unit Value: The value per Unit for a Portfolio.

Scholarsedge529.com

Upromise: A loyalty program offered by Upromise, LLC which enables Account Owners who are

members of Upromise to earn rewards from participating merchants and have those rewards

transferred from a Upromise account to a Plan Account, subject to minimum transfer amounts.

Upromise is a separate program from the Plan. Upromise, LLC is not affiliated with the State, the

Trust, the Board, the Program Manager, or any Plan Official.

Vanguard: The Vanguard Group, Inc., the Investment Manager of the Vanguard Underlying Funds.

We or our: Scholar’s Edge, the Board (as the Trustee of the Trust and administrator of the Plan), the

Program Manager, PGI, PFD, and/or the Investment Managers, as the case may be.

Scholarsedge529.com

Account Basics

To participate in Scholar’s Edge, you must complete, sign, and have your Financial Professional

submit an Enrollment Form. You must be 18 years or older and a U.S. citizen (or a resident alien),

or an entity that is organized in the U.S. and have a valid permanent U.S. Street address. By signing

the Enrollment Form, you irrevocably consent and agree that the Account is subject to the terms and

conditions of the Enrollment Form and this Plan Description and Participation Agreement. You also

consent and agree to authorize your Financial Professional to access your Account and perform

certain transactions on your behalf as explained on the Enrollment Form or separately on the

appropriate power of attorney or agent authorization form.

If you do not wish to work with a Financial Professional, the Board also offers a direct-to-consumer

529 plan, The Education Plan. The Education Plan offers lower cost investment options compared

to Scholar’s Edge. Go to theeeducationplan.com for more information about The Education Plan.

Investing through Omnibus Accounts. When you invest through a Financial Professional who works

for a Dealer that maintains your Account directly on its recordkeeping platform or where the Dealer

has an arrangement with a third-party recordkeeping agent that has entered into an agreement with

the Program Manager to perform certain services for Omnibus Accounts, the Omnibus Service

Provider will perform certain Account recordkeeping services such as accepting and processing

initial and subsequent contributions, accepting and processing requests for distributions, and

delivering confirmations and statements and other information. Usually, in such a case, the

Omnibus Service Provider maintains one single account held with the Plan in the institution’s name

for the benefit of its customers or the customers of the applicable Dealer. In an Omnibus Account

arrangement, Account Owner information is held on the Omnibus Service Provider’s platform and

trades are usually aggregated for transmission to the Plan. Different and/or additional fees than

those disclosed in this Plan Description and Participation Agreement may apply. You should

determine whether your Financial Professional’s Dealer holds Accounts in the Plan on behalf of its

customers under an Omnibus Account arrangement and if so, understand the details of such

arrangement, including the fees and expenses charged by such firm that are not disclosed in this

Plan Description and Participation Agreement.

In addition, guidelines, conditions, services, and restrictions may apply that vary from those

discussed in this Plan Description. Depending on a particular Omnibus Service Provider’s policies,

these differences may include but are not limited to: (i) eligibility standards to purchase, exchange,

and sell Units; (ii) availability of sales charge waivers and fees; (iii) minimum initial and subsequent

purchase amounts; (iv) conversion periods for Class C Units; (v) availability of Letter of Intent

Account Basics: You must work with a Financial Professional to open an Account, and you must

be 18 years or older and a U.S. citizen (or a resident alien), or an entity that is organized in the

U.S., and have a valid permanent U.S. Street address. If you have an open Account and you no

longer have a permanent U.S. Street address, your Account will not be eligible to receive

contributions.

How To Participate

Scholarsedge529.com

privileges; and (vi) availability of certain Plan features, such as the Upromise Program and Ugift.

Additionally, if you invest through a Financial Professional that maintains an Omnibus Account and

have one or more other Accounts with the Plan or eligible Principal mutual fund accounts, you must

notify your Financial Professional and the Plan in advance about your other Accounts or other

eligible Principal mutual fund accounts to help ensure that sales charge waivers, rights of

accumulation privileges, and/or other Plan features are properly applied to your Accounts. You may

be asked to provide additional information.

By establishing and/or contributing to an Account through an Omnibus Service Provider that holds

your Account directly on its recordkeeping platform, you will be deemed to have agreed that your

Account and its assets are subject to the terms and conditions of this Plan Description, including the

Participation Agreement, to the same extent as if you had executed the Participation Agreement.

Notwithstanding the foregoing, in the event of conflicts (as discussed above) between your financial

institution’s fees, guidelines, conditions, or policies and the Plan Description or Participation

Agreement, the fees, policies, or procedures of your financial institution will prevail as they relate to

any Accounts held in an omnibus capacity at your Omnibus Service Provider.

Successor Account Owner. You may designate a Successor Account Owner that is 18 years or older

(to the extent permissible under the laws that apply to your situation) to succeed to all of your right,

title, and interest in your Account upon your death. You can make this designation online, on the

Enrollment Form, over the phone, or in writing. We must receive and process your request before

the Successor Account Owner designation can be effective. You may change or terminate your

Successor Account Owner at any time by submitting the appropriate form. Forms may be obtained

from our website at scholarsedge529.com or by calling us at 1.866.529.7283.

Beneficiary. You can set up an Account for anyone, including yourself or your child, grandchild,

spouse, or other relative or even someone not related to you. Each Account can have only one

Beneficiary at any time. However, you may have multiple Accounts for different Beneficiaries.

Also, different Account Owners may have an Account for the same Beneficiary within the Plan, but

contributions to an Account will be limited if the total assets held in all Accounts for that

Beneficiary under all 529 plans offered by New Mexico equal or exceed the Maximum Account

Balance. See Maximum Account Balance on page 12. Your Beneficiary may be of any age;

however, the Beneficiary must be an individual.

Identity Verification. U.S. federal law requires all financial institutions to obtain, verify, and record

information that identifies each person who opens an Account. When completing your Enrollment

Form, we will ask for your name, street address, date of birth, and Social Security or Tax

Identification Number. If you are a trust or other entity, we require a Tax Identification Number and

information for any person(s) opening your Account, such as a Custodian, agent under power of

attorney, trustee, or corporate officer. Further information about identification verification

requirements can be found in the General Information section beginning on page 84.

Trusts, Corporations, and Other Entities as Account Owners. If you are a trust, partnership,

corporation, association, estate, or another acceptable type of entity, you must submit

documentation to Scholar’s Edge to verify the existence of the entity and identify the individuals

who are eligible to act on the entity’s behalf. Examples of appropriate documentation include a trust

agreement, partnership agreement, corporate resolution, articles of incorporation, bylaws, or letters

appointing an executor or personal representative. This documentation must be submitted when an

Account is established. We will not be able to open your Account until we receive all of the

information required on the Enrollment Form and any other information we may require, including

the documentation that verifies the identity and existence of the Account Owner. A Beneficiary does

Scholarsedge529.com

not have to be named during enrollment when the Account Owner is a tax-exempt organization, as

defined in the Code, and the Account has been established as a general scholarship fund.

How to Open and Fund Your Account

Minimum Contributions. You can make your initial and any additional contributions by check,

Recurring Contributions (also known as Automatic Investment Plan (AIP)), payroll direct deposit,

Electronic Funds Transfer (EFT), dollar-cost averaging, rolling over assets from another Qualified

Tuition Program, moving assets from an UGMA/UTMA account or Coverdell Education Savings

Account, or by redeeming U.S. Savings Bonds. Each of your contributions will be subject to

applicable Fees.

We will not accept contributions made by cash, money order, travelers checks, checks drawn on

foreign banks, contributions not in U.S. dollars, checks dated more than 180 days from the date of

receipt, checks post-dated more than seven days in advance, checks with unclear instructions, starter

or counter checks, credit card or bank courtesy checks, third-party personal checks over $10,000,

instant loan checks, or any other check we deem unacceptable. We will also not accept stocks,

securities, or other noncash assets as contributions to your Account.

You can allocate each contribution among any of the Investment Portfolios; however, the minimum

percentage per selected Investment Portfolio is 1% of the contribution amount. Your additional

contributions can be made to different Investment Portfolios than the selection(s) you make during

enrollment as long as investments in those different Investment Portfolios are permissible.

Contribution Date. We will credit any money contributed to your Account on the same business day

if the contribution is received in good order and prior to the close of the New York Stock Exchange

(NYSE), normally 4:00 p.m. Eastern Time. The contribution will be credited on the next succeeding

business day that the NYSE is open if it is received after its close.

In the event of Force Majeure, we may experience processing delays, which may affect your trade

date. In those instances, your actual trade date may be after the trade date you would have received,

which may negatively affect the value of your Account. For the definition of “Force Majeure,” see

“Market Uncertainties and other events” in the Section entitled “Important Risks You Should

Consider” on page 54.

We will generally treat contributions sent by U.S. mail as having been made in a given year if

checks are received in a mailing postmarked on or before December 31 of the applicable year, and

provided the checks are subsequently paid. With respect to EFT contributions, for tax purposes we

will generally treat contributions received by us in a given year as having been made in that year if

you initiate them on or before December 31 of such year, provided the funds are successfully

deducted from your checking or savings account at another financial institution. Your contributions

made by Recurring Contribution will generally be considered received by us in the year the

Recurring Contribution debit has been deducted from your checking or savings account at another

financial institution. See Funding Methods – Recurring Contribution beginning on page 20.

Future Contributions. At the time you enroll, you must choose how you want your contributions

invested, which will serve as the standing investment instruction for future contributions (Standing

Investment Instruction). We will invest all additional contributions according to your Standing

Investment Instruction, unless you provide us with different instructions, and investments in

different Investment Portfolios are permissible. You may view or change your Standing Investment

Instruction at any time by logging onto our website at scholarsedge529.com. You may also change

Scholarsedge529.com

your Standing Investment Instruction by downloading and submitting the appropriate

exchange/future contribution form from our website at scholarsedge529.com.

Changing Investment Portfolios. You may change the Investment Portfolios for your Account twice

per calendar year, and with a permissible change in the Beneficiary. The twice per calendar year

limitation on reallocations applies in the aggregate across all of your accounts for the same

Beneficiary under all Qualified Tuition Programs sponsored by the State of New Mexico. You may

exchange Units in a Portfolio only for Units of the same Unit Class in another Portfolio. You can

initiate this transaction online, over the telephone by contacting a Client Service Representative at

1.866.529.7283, or by downloading and submitting the appropriate exchange/future contribution

form from our website at scholarsedge529.com.

Control over Your Account. Although any individual or entity may make contributions to your

Account, you, as Account Owner, retain control of all contributions made as well as all earnings

credited to your Account up to the date they are directed for distribution. A Beneficiary who is not

the Account Owner has no control over any of the Account assets. You may also grant another

person the ability to take certain actions with respect to your Account by completing appropriate

form(s).

By signing the Enrollment Form, you consent and agree to authorize your Financial Professional to

access your Account and perform certain transactions on your behalf as explained on the Enrollment

Form or separately on the appropriate power of attorney or agent authorization form.

Trusted Contact. You can choose to authorize us to contact a Trusted Contact Person and disclose to

that person information about your Account to address possible financial exploitation; to confirm

the specifics of your current contact information, health status, or the identity of any legal guardian,

executor, trustee, or holder of a power of attorney; or as otherwise permitted by law. You can

choose to designate a Trusted Contact Person by completing the appropriate form or the Trusted

Contact Person section of the Enrollment Form. A Trusted Contact Person must be at least eighteen

(18) years of age.

Funding Methods:

Recurring Contribution. You may contribute to your Account by authorizing us to receive periodic

automated debits from a checking or savings account at your bank if your bank is a member of the

Automated Clearing House, subject to certain processing restrictions. You may elect to authorize an

annual increase to your Recurring Contribution. You can initiate a Recurring Contribution either

when you enroll by completing the Recurring Contribution section during enrollment or after your

Account has been opened, either online, over the phone (provided you have previously submitted

certain information about the bank account from which the money will be withdrawn), or in writing

by submitting the appropriate form. Your Recurring Contribution authorization will remain in effect

until we have received notification of its termination from you and we have had a reasonable

amount of time to act on it.

Recurring Contribution deposits can be set up for as little as $1. However, if you do not otherwise

qualify for a waiver, you may need to schedule Recurring Contributions of at least $25 per month or

$75 per quarter in order for the Annual Account Maintenance Fee to be waived. See Fees and

Charges – Annual Account Maintenance Fee on page 35.

Scholarsedge529.com

You may terminate your Recurring Contribution at any time. To be effective, a change to, or

termination of, a Recurring Contribution must be received at least five (5) business days before the

next Recurring Contribution debit is scheduled to be deducted from your bank account, and it is not

effective until processed by us. If your Recurring Contribution cannot be processed because the

bank account on which it is drawn lacks sufficient funds, if you provide incomplete or inaccurate

banking information, or if the transaction would violate processing restrictions, we reserve the right

to suspend processing of future Recurring Contributions.

There is no charge for making Recurring Contributions. Recurring Contribution debits from your

bank account will occur on the day you indicate, provided the day is a regular business day. If the

day you indicate falls on a weekend or a holiday, the Recurring Contribution debit will occur on the

next business day. You will receive a trade date of the same business day the bank debit occurs.

Quarterly Recurring Contribution debits will be made on the day you indicate (or the next business

day, if applicable) every three (3) months, not on a calendar quarter basis. If you do not designate a

date, your bank account will be debited on the 20th day of the applicable month.

The start date for a Recurring Contribution must be at least three (3) business days from the date

you submit the Recurring Contribution request. If a start date for a Recurring Contribution is less

than three (3) business days from the date you submit the Recurring Contribution request, the

Recurring Contribution will start on the requested day in the next succeeding month.

Electronic Funds Transfer (EFT). You may also contribute by EFT subject to certain processing

restrictions. Each contribution must be in an amount of at least $1. You may authorize us to

withdraw funds by EFT from a checking or savings account for both initial and additional

contributions to your Account, provided you have submitted certain information about the bank

account from which the money will be withdrawn. EFT transactions can be completed through the

following means: (i) by providing EFT instructions on the Enrollment Form; (ii) by submitting EFT

instructions online after enrollment at scholarsedge529.com; or (iii) by contacting a Client Service

Representative at 1.866.529.7283. We do not charge a Fee for contributing by EFT.

Contributions by Check. You may make your initial contribution by check. Checks must be made

payable to Scholar’s Edge. Third-party personal checks must be equal to or less than ten-thousand

dollars ($10,000) and be properly endorsed or made payable to Scholar’s Edge.

Limitations on Recurring Contributions and EFT Contributions. We may place a limit on the total

dollar amount per day you may contribute to an Account by EFT. Contributions in excess of this

limit will be rejected. If you plan to contribute a large dollar amount to your Account by EFT, you

may want to contact a Client Service Representative at 1.866.529.7283 to inquire about the current

limit prior to making your contribution.

An EFT or Recurring Contribution may fail because the bank account on which it is drawn lacks

sufficient funds or because the Account Owner has failed to provide correct and complete banking

instructions (Failed Contributions). If you have a Failed Contribution, we reserve the right to

suspend processing of future Recurring Contributions and EFT contributions. See Failed

Contributions on page 25.

Direct Deposits from Payroll. You may be eligible to make automatic, periodic contributions to

your Account by payroll direct deposit (if your employer offers this service). You may make your

initial investment by payroll direct deposit or set up payroll direct deposit for additional

contributions to your Account. The minimum payroll direct deposit contribution is $1 per paycheck.

Scholarsedge529.com

Contributions by payroll direct deposit will only be permitted from employers able to meet our

operational and administrative requirements. You must complete payroll direct deposit instructions

by logging into your Account at scholarsedge529.com, selecting the payroll direct deposit option,

and designating the contribution amount in the instructions. You will need to print these instructions

and submit them to your employer. Alternatively, you may submit the appropriate payroll direct

deposit form directly to us to initiate the payroll direct deposit process.

Employer-sponsored investment plan: Termination of Employment. If you terminate employment with

your employer, please notify the Plan. If you terminate employment with your employer, you may

continue to make contributions to your Account using a Check or Recurring Contributions. Any

additional purchases of Class A Units will be made with the appropriate sales charges applied. If you

make Recurring Contributions of at least $25 per month or $75 per quarter, your Annual Account

Maintenance Fee will be waived.

Rollover Contributions. You can make your initial investment by rolling over assets from another

Qualified Tuition Program to Scholar’s Edge for the benefit of the same Beneficiary. You can also

roll over assets from your Account or another Qualified Tuition Program to a Beneficiary who is a

Member of the Family of your current Beneficiary. See Maintaining Your Account – Options for

Unused Contributions, Changing a Beneficiary, Transferring Assets to Another of Your Accounts on

page 31. A rollover for the same Beneficiary is restricted to once per 12-month period. Incoming

rollovers can be direct or indirect.

A direct rollover is the transfer of money from one Qualified Tuition Program directly to another.

An indirect rollover is the transfer to you of money from an account in another state’s Qualified

Tuition Program; you then contribute the money to your Account. To avoid U.S. federal income tax

consequences and the Distribution Tax, you must contribute an indirect rollover within 60 days of

the distribution.

You should also be aware that some states may not permit direct rollovers from Qualified Tuition

Programs. In addition, there may be state income tax consequences (and in some cases state-

imposed penalties) resulting from a rollover out of a state’s Qualified Tuition Program. See

Important Tax Information – State Tax Issues beginning on page 79.

Moving Assets from an UGMA/UTMA Account. If you are the Custodian of an UGMA/UTMA

account, you may be able to open an Account in your custodial capacity, depending on the laws of

the state where you opened the UGMA/UTMA account. These types of accounts involve additional

restrictions that do not apply to regular Section 529 accounts. The Plan Officials are not liable for

any consequences related to your improper use, transfer, or characterization of custodial funds.

In general, your UGMA/UTMA custodial account is subject to the following additional requirements

and restrictions:

1. You must indicate that the Account is an UGMA/ UTMA account and the state in which the

UGMA/ UTMA account was opened by checking the appropriate box on the Enrollment Form;

2. You must establish an Account in your custodial capacity separate from any Accounts you may

hold in your individual capacity;

3. You will be permitted to make distributions in accordance with the rules regarding distributions

under applicable UGMA/UTMA law;

Scholarsedge529.com

4. You will not be able to change the Beneficiary of the Account (directly or by means of a

Rollover Distribution), except as may be permitted by applicable UGMA/UTMA law;

5. You will not be able to change the Account Owner to anyone other than a successor Custodian

during the term of the custodial account under applicable UGMA/UTMA law;

6. You must notify us when the custodianship terminates and your Beneficiary is legally entitled

to take control of the Account. At that time, the Beneficiary will become the Account Owner

and will become subject to the provisions of the Plan applicable to non-UGMA/UTMA

Account Owners. If you fail to direct the Plan to transfer ownership of the UGMA/ UTMA

Account when the Beneficiary is legally entitled to take control of the Account assets, the Plan

may freeze the Account and/or refuse to allow you to transact on the Account. Some

UGMA/UTMA laws allow for more than one age at which the custodianship terminates (“Age

of Termination”). The Plan may freeze an Account based on the youngest allowable Age of

Termination of the custodianship according to the UGMA/UTMA laws where the custodianship

account was established, based on the Plan’s records. You may be required to provide

documentation to the Plan if the Age of Termination of the custodianship account is other than

the youngest allowable age under the applicable UGMA/ UTMA law or if the applicable

UGMA/UTMA law differs from Plan records;

7. We may require you to provide documentation evidencing compliance with the applicable

UGMA/ UTMA law; and

8. In addition, certain tax consequences described under Important Tax Information starting on

page 79, may not be applicable in the case of Accounts opened by a Custodian under

UGMA/UTMA. Moreover, because only contributions made in “cash form” may be used to

open an Account in Scholar’s Edge, the liquidation of non-cash assets held by an

UGMA/UTMA account would be required and may be considered a taxable event. Please

contact a tax advisor to determine how to transfer assets held in an existing UGMA/UTMA

account to Scholar’s Edge and what the implications of that transfer may be for your specific

situation.

Moving Assets from a Coverdell Education Savings Account. You may fund your Account by

moving assets from a Coverdell Education Savings Account (ESA). Please indicate that the assets

were liquidated from the ESA on the Enrollment Form or with any additional investments. Unlike

UGMA/UTMA accounts, the Beneficiary may be changed to a Member of the Family of the

beneficiary of the ESA. Making distributions from an ESA to fund an Account for the same

Beneficiary may not be considered a taxable transaction. Consult your tax advisor for more

information.

Redeeming U.S. Savings Bonds. You may fund your Account with proceeds from the redemption of

certain U.S. Savings Bonds. In certain cases, you may redeem U.S. Savings Bonds under the

education tax exclusion. Please visit savingsbonds.gov to determine if you are eligible for this

exclusion.

Refunded Distributions. In the event the Beneficiary receives a refund from an Eligible Educational

Institution, those funds will be eligible for recontribution to your Account if:

• The Beneficiary of your Account is the same Beneficiary receiving the refund; and

• The recontribution is made within 60 days of the date of the refund.

Scholarsedge529.com

The recontributed amount will not be subject to U.S. federal or New Mexico state income tax or the

Distribution Tax. For tax purposes, please maintain proper documentation evidencing the refund

from the Eligible Educational Institution.

Additional Form Requirements for Rollovers, ESAs, and Series EE or Series I Bonds

Rollover contributions and other transfers to your Account must be accompanied by the appropriate

incoming rollover form as well as any other information we may require, including the information

required for certain contributions described below. To roll over assets for a current Beneficiary into

an Account in Scholar’s Edge, you must complete the appropriate incoming rollover form and an

Enrollment Form.

When making a contribution to your Account with assets previously invested in an ESA, a

redemption of Series EE and Series I bonds or a rollover, you must indicate the source of the

contribution and provide us with the following documentation, as applicable:

1. In the case of a contribution from an ESA, an accurate account statement issued by the

financial institution that acted as custodian of the account that reflects in full both the

principal and earnings attributable to the rollover amount.

2. In the case of a contribution from the redemption of Series EE or Series I U.S. Savings

Bonds, an accurate account statement or IRS Form 1099-INT issued by the financial

institution that redeemed the bond showing interest from the redemption of the bond.

3. In the case of a rollover, either you or the previous Qualified Tuition Program must provide

us with an accurate statement issued by the distributing program which reflects in full both

the principal and earnings attributable to the rollover amounts.

Please visit the Scholar’s Edge website at scholarsedge529.com or contact a Client Service

Representative at 1.866.529.7283 for any of the forms you may need. Until we receive the

documentation described above, as applicable, we will treat the entire amount of the rollover

contribution as earnings in the Account receiving the transfer, which would subject the entire

amount of the rollover contribution to taxation in the case of a Non- Qualified Distribution.

Dollar-Cost Averaging. The Plan allows Account Owners to take advantage of dollar cost averaging

via periodic systematic exchanges. Account Owners may choose an originating Portfolio and a

Portfolio into which specified dollar amounts (a minimum of $25 per Portfolio) will be transferred

on a monthly or quarterly basis. Account Owners must have at least $1,000 in the originating

Portfolio to begin dollar-cost averaging. Dollar-cost averaging does not eliminate the risks of

investing in financial markets and may not be appropriate for everyone. It does not ensure a profit or

protect you against a loss in declining markets.

If you elect to begin dollar-cost averaging assets that are currently in your Account, such election

will count as a transfer for purposes of the twice per calendar year limitation on reallocations. In

addition, changing your standing dollar-cost averaging instructions, or canceling them, will also be

considered a transfer for purposes of the same limitation. The twice per calendar year limitation on

reallocations applies in the aggregate across all of your accounts for the same Beneficiary under all

Qualified Tuition Programs sponsored by the State of New Mexico.

Maximum Account Balance. You can contribute up to a Maximum Account Balance of $500,000

for each Beneficiary. The aggregate market value of all accounts for the same Beneficiary under all

Scholarsedge529.com

Qualified Tuition Programs sponsored by the State of New Mexico is counted toward the Maximum

Account Balance regardless of the Account Owner. Earnings may cause the Account balances for

your Beneficiary to exceed $500,000 and no further contributions will be allowed at that point. If,

however, the market value of your Account falls below the Maximum Account Balance, we will

then accept additional contributions.

Should the Board decide to increase the Maximum Account Balance, which it may in its sole

discretion, additional contributions up to the new Maximum Account Balance will be accepted.

Excess Contributions. The excess portion of any contributions received that would cause your

Account balance to exceed the Maximum Account Balance (as determined by the close of business

on the day prior to our receipt of your contribution) will be rejected or returned to you, without

adjustment for gains or losses. If you are enrolled in a Recurring Contribution, the Recurring

Contribution may be discontinued. Also, if a contribution is applied to an Account and we later

determine the contribution to have caused the aggregate market value of the account(s) for a

Beneficiary in all Qualified Tuition Programs sponsored by the State of New Mexico to exceed the

Maximum Account Balance, we will refund the excess contributions and any earnings thereon to the

contributor. Any refund of an excess contribution may be treated as a Non-Qualified Distribution.

Failed Contributions. If you make a contribution by check, EFT, or Recurring Contribution that is

returned unpaid by the bank upon which it is drawn, you will be responsible for any losses or

expenses incurred by the Portfolios or the Plan and we may charge your Account a reasonable Fee.

Your obligation to cover the loss may be waived if you make payment in good order within ten (10)

calendar days. We have the right to reject or cancel any contribution due to nonpayment.

Confirmation of Contributions and Transactions. We will send you a confirmation for each

contribution and transaction to your Account(s), except for Recurring Contributions, payroll direct

deposits transactions, exchanges due to dollar-cost averaging, and automatic transfers from a

Upromise account to your Account. Each confirmation statement will indicate the number of Units

you own in each Investment Portfolio. If an error has been made in the amount of the contribution

or the Investment Portfolio in which a particular contribution is invested, you must notify us of the

error within the required time period See Maintaining Your Account – Correction of Errors on page

32. We use reasonable procedures to confirm that transaction requests are genuine. You may be

responsible for losses resulting from fraudulent or unauthorized instructions received by us,

provided we reasonably believe the instructions are genuine. To safeguard your Account, please

keep your information confidential. Contact us immediately at 1.866.529.7283 if you believe there

is a discrepancy between a transaction you requested and the confirmation statement you received,

or if you believe someone has obtained unauthorized access to your Account. Contributions may be

refused if they appear to be an abuse of the Plan.

Ugift. You may invite family and friends to contribute to your Account through Ugift, either in

connection with a special event or just to provide a gift to the Account Owner’s Beneficiary. Family

and friends can either contribute online through an electronic bank transfer or by mailing in a gift

contribution coupon with a check made payable to Ugift—Scholar’s Edge. The minimum gift

contribution through Ugift is $1.

Gift contributions received in good order will be held for approximately five (5) business days

before being transferred into your Account. Gift contributions through Ugift are subject to the

Maximum Account Balance. Gift contributions will be invested according to the Standing

Investment Instruction on file for your Account at the time the gift contribution is transferred. There

may be potential tax consequences of gift contributions invested in your Account. You and the gift

Scholarsedge529.com

giver should consult a tax advisor for more information. Ugift is an optional service, is separate

from Scholar’s Edge, and is not affiliated with the State of New Mexico, the Board, or the Trust.

For more information, please see our website at scholarsedge529.com.

Upromise

. If you are enrolled in Upromise, you can link your Account so that amounts on deposit

in your Upromise account are automatically transferred to your Account on a periodic basis.

Transfers from a Upromise account may be subject to a minimum amount that is subject to change

at any time.

This Plan Description and Participation Agreement is not intended to provide detailed information

concerning Upromise. Upromise is administered in accordance with the terms and procedures set

forth in the Upromise Member Agreement (as amended from time to time), which is available at

upromise.com. Participating companies, contribution levels, and terms and conditions are subject to

change at any time without notice. Upromise is an optional program, is separate from Scholar’s

Edge, and is not affiliated with the State of New Mexico, the Board, or the Trust.

Scholarsedge529.com

General. You can take a distribution from your Account or close your Account at any time by

notifying us. We will not send any proceeds from your distribution request until all the money has

been collected, meaning the money’s availability in your Account is confirmed.

Distributions from your Account are either Qualified Distributions or Non-Qualified Distributions

as determined under IRS requirements. As the Account Owner, you are responsible for satisfying

the IRS requirements for proof of Qualified Distributions, which includes retaining any paperwork

and receipts necessary to verify the type of distribution you received. We are not required to provide

information to the IRS regarding the type (qualified or non-qualified) of distribution you request.

Distributions may be subject to U.S. federal and/or state tax withholding. For purposes of

determining that a distribution is not taxable or subject to the Distribution Tax, you must determine

whether the distribution is made in connection with the payment of Qualified Expenses, as defined

under the Code and discussed under Qualified Distributions on page 28, or fits within one of the

exceptions for treatment as a Non-Qualified Distribution as discussed under Other Distributions on

page 28.

Procedures for Distributions. Only the Account Owner may direct distributions from your Account.

Qualified Distributions made payable to the Account Owner, the Beneficiary, or an Eligible

Educational Institution may be requested online, by phone, or by completing the appropriate

distribution request form. In order for us to process a distribution request, the distribution request

must be in good order, and we must be provided with such other information or documentation as

we may require.

We will generally process a distribution from an Account within three (3) business days of

accepting the request. During periods of market volatility and at year-end, distribution requests may

take up to five (5) business days to process. Please allow ten (10) business days for the proceeds to

reach the Account Owner, the Beneficiary, or the Eligible Educational Institution. We may also

establish a minimum distribution amount and/or charge a Fee for distributions made by federal wire.

Distributions for Account Owners that are Trusts, Corporations and Other Entities. If the individuals

who are authorized to act on behalf of your entity have changed since your Account was

established, then additional documentation showing these changes must be submitted with any

distribution request.

Systematic Withdrawal Program. You may choose to establish periodic, pre-scheduled withdrawals

for Qualified Expenses from your Account. The Plan will file IRS Form 1099-Q annually for

distributions taken for all withdrawals, including those using systematic withdrawals. You may have

up to two sets of standing systematic withdrawal instructions at any given time. If the balance in an

Investment Portfolio from which you are taking systematic withdrawals is less than the amount

specified in your instructions, the systematic withdrawals under those instructions will be stopped.

A distribution for a systematic withdrawal will be held for up to five business days for

contributions that have not yet cleared, or ten (10) business days if the Account Owner or address

How To Take a Distribution from Your Account

Distributions: Distributions from your Account are either Qualified Distributions (tax free for U.S.

federal income tax purposes) or Non-Qualified Distributions (potentially subject to U.S. federal and

state income tax and, in some cases, the Distribution Tax).

Scholarsedge529.com

has been changed on the Account and the systematic withdrawal is within ten (10) business days of

that change. The distribution will be released when the specified waiting period has been satisfied.

Temporary Withdrawal Restriction. If you make a contribution by check, EFT, or Recurring

Contribution (assuming all are in good order), we will defer the approval of a withdrawal of that

contribution from your Account for five (5) business days following deposit.

There will also be a hold of fifteen (15) business days on withdrawals following a change to your

address, and a hold of ten (10) calendar days on withdrawals if banking information has been added

or edited. For assistance, please contact a Client Service Representative at 1.866.529.7283.

Qualified Distributions. Distributions for Qualified Expenses are generally exempt from U.S. federal

and New Mexico state income taxes and the Distribution Tax. Also see “Important Tax Information”

beginning on page 79.

Non-Qualified Distributions. A distribution that does not meet the requirements for a Qualified

Distribution will be considered a Non-Qualified Distribution by the IRS. The earnings portion of a

Non-Qualified Distribution will be subject to U.S. federal income taxes (and may be subject to other

taxes) and will be taxable to the person receiving the distribution. In addition, Non-Qualified

Distributions are subject to a Distribution Tax unless it is one of the distributions described below

under Other Distributions.

The person receiving the distribution is subject to IRS requirements, including filing applicable

forms with the IRS. Although we will report the earnings portion of all distributions, it is your

responsibility to calculate and report any tax liability and to substantiate any exemption from tax

and/or penalties.

Other Distributions. The distributions discussed below are not subject to the Distribution Tax.

Except for a Rollover Distribution, a Refunded Distribution, an ABLE Rollover Distribution, a

distribution for K-12 Tuition, a distribution for Apprenticeship Expenses and a distribution for

Student Loan Payments, the earnings portion of each distribution discussed will be subject to U.S.

federal and to any applicable state income taxes. For New Mexico taxpayers, Rollover Distributions

to another state’s plan may be subject to recapture.

See Important Tax Information – Federal Tax Issues – Transfers and Rollovers on page 79 and

State Tax Issues beginning on page 82. You should consult a tax advisor regarding the application

of federal and state tax laws if you take any of these distributions:

• Death of Beneficiary. In the event of the death of the Beneficiary, you may change the

Beneficiary of your Account, authorize a payment to a beneficiary of the Beneficiary, or the

estate of the Beneficiary, or request the return of all or a portion of your Account balance. A

distribution due to the death of the Beneficiary, if paid to a beneficiary of the Beneficiary or

the estate of the Beneficiary, will not be subject to the Distribution Tax, but earnings will be

subject to U.S. federal and any applicable state income tax. A distribution of amounts in

your Account, if not paid to a beneficiary of the Beneficiary or the Beneficiary’s estate, may

constitute a Non-Qualified Distribution, subject to U.S. federal and any applicable state

income taxes at the distributee’s tax rate and the Distribution Tax. If you select a new

Beneficiary who is a Member of the Family of the former Beneficiary, you will not owe U.S.

federal income tax or the Distribution Tax. Special rules apply to UGMA/UTMA custodial

accounts.

Scholarsedge529.com

• Disability of Beneficiary. If your Beneficiary becomes Disabled, you may change the

Beneficiary of your Account or request the return of all, or a portion of your Account

balance. A distribution due to the Disability of the Beneficiary will not be subject to the

Distribution Tax, but earnings will be subject to U.S. federal and any applicable state income

tax at your tax rate. If you select a new Beneficiary who is a Member of the Family of the

former Beneficiary, you will not owe U.S. federal income tax or a Distribution Tax. Special

rules apply to UGMA/UTMA custodial accounts.

• Receipt of Scholarship. If your Beneficiary receives a qualified scholarship, Account assets

up to the amount of the scholarship may be withdrawn without imposition of the Distribution

Tax. A qualified scholarship includes certain Educational Assistance allowances under U.S.

federal law as well as certain payments for educational expenses (or attributable to

attendance at certain educational institutions) that are exempt from U.S. federal income tax.

The earnings portion of a distribution due to a qualified scholarship is subject to U.S. federal

and any applicable state income tax at the distributee’s tax rate.

• Attendance at Certain Specified Military Academies. If your Beneficiary attends a United

States military academy, such as the United States Naval Academy, you may withdraw up to

an amount equal to the costs attributable to the Beneficiary’s attendance at the institution

without incurring the additional Distribution Tax. The earnings portion of the distribution

will be subject to U.S. federal and any applicable state income tax at the distributee’s tax

rate.

• Use of Education Tax Credits. If you pay Qualified Expenses from an Account, you will not

be able to claim American Opportunity or Lifetime Learning Credits for the same expenses.

Furthermore, expenses used in determining the allowed American Opportunity or Lifetime

Learning Credits will reduce the amount of a Beneficiary’s Qualified Expenses to be paid

from your Account as a Qualified Distribution and may result in taxable distributions. These

distributions will not be subject to the Distribution Tax.

• Rollover Distribution. To qualify as a Rollover Distribution, you must reinvest the amount

distributed from your Account into another Qualified Tuition Program within sixty (60) days

of the distribution date. Rollover Distributions may be subject to certain state taxes, but are

generally exempt from U.S. federal income taxes and the Distribution Tax.

ABLE Rollover Distribution. To qualify as an ABLE Rollover Distribution, you must reinvest the

amount distributed from your Account into a Qualified ABLE Program within 60 days of the

distribution date. ABLE Rollover Distributions are generally exempt from U.S. federal income taxes

and the Distribution Tax. ABLE Rollover Distribution amounts previously deducted for New

Mexico income tax purposes may be recaptured if they are made after January 1, 2026, and/or

exceed the annual $18,000 contribution limit. Account Owners who are not New Mexico taxpayers

should consult their own tax advisors before transferring funds from a New Mexico 529 Plan to a

Qualified ABLE Program.

Roth IRA rollover. Starting in 2024 account owners can rollover up to an aggregate lifetime limit of

$35,000 from a 529 plan into a Roth IRA for the benefit of the 529 plan beneficiary. The rollover is

subject to a $7000 per year rollover limit and must be in the same name as the 529 plan beneficiary.

The 529 plan must have been in existence for at least 15 years prior to the rollover. Any 529

contributions made within the past 5 years are ineligible. Taxpayers should consult their own tax

advisors prior to completing a Roth IRA rollover.

Scholarsedge529.com

See Important Tax Information – State Tax Issues – Recapture of Income Tax Deduction on page 82.

Refunded Distribution. If you take a Refunded Distribution, any refunds received from an Eligible

Educational Institution will not be subject to U.S. federal or New Mexico state income tax or the

Distribution Tax.

Records Retention. Under current U.S. federal tax law, you are responsible for obtaining and

retaining records, invoices, or other documentation relating to your Account, including records

adequate to substantiate, among other things, the following: (i) expenses which you claim are

Qualified Expenses, (ii) the death or Disability of a Beneficiary, (iii) the receipt by a Beneficiary of

a qualified scholarship or Educational Assistance, (iv) the attendance by a Beneficiary at certain

specified military academies, (v) the earnings component of and compliance with the timing or

other requirements applicable to rollovers, savings bonds, or education savings accounts or (vi) a

Refunded Distribution.

Method of Payment. We pay distributions as noted to the following payees:

• Account Owner (by check or by ACH to an established bank account);

• Beneficiary (by check or by ACH to an established bank account); or

• Eligible Education Institution (by check or by electronic payment to schools where available).

A distribution taken by check to pay K-12 Tuition will be made payable to the Account Owner only.

Timing of Distribution Request. Distribution requests received in good order before the close of the

NYSE (generally 4 p.m. Eastern Time) on any day the NYSE is open for business are processed that

day based on the Unit Values of the Portfolios underlying your Account for that day. Requests

received after the close of the NYSE are processed the next business day using the Unit Values on

that day.

In the event of Force Majeure, we may experience processing delays, which may affect your trade

date. In those instances, your actual trade date may be after the trade date you would have received,

which may negatively affect the value of your Account. For the definition of Force Majeure, see

Market Uncertainties and other events in the Section entitled Important Risks You Should Consider

beginning on page 54.

Tax Treatment of Distributions. Please read Important Tax Information starting on page 79.

Scholarsedge529.com

Account Statements. You will receive quarterly statements to reflect transactions only if you have

made transactions within the quarter. These transactions include contributions (including gifts)

made to your Account, exchanges due to dollar-cost averaging, automatic transfers from a

Upromise account to your Account, withdrawals made from your Account, and transaction and

maintenance fees incurred by your Account. The total value of your Account at the end of the

quarter will also be included in your quarterly statements. You will receive an annual Account

Statement even if you have made no transactions within the year.

Your Account statement is not a tax document and should not be submitted with your tax forms.

However, you could use your Account statement(s) to determine the amounts contributed during the

previous tax year. You may request duplicate copies of Account statements to be provided to

another party.

You can choose to receive periodic Account statements, transaction confirmations, and other

personal correspondence via electronic delivery or in paper format. We reserve the right to charge a

Fee for duplicate copies of historical statements.

Your Financial Professional will not automatically receive copies of your Account Statements. If

you would like your Financial Professional to receive copies of your Account Statements, you must

complete and submit the appropriate power of attorney or agent authorization form.

Options for Unused Contributions, Changing a Beneficiary, Transferring Assets to Another of Your

Accounts. Your Beneficiary may choose not to attend an Eligible Educational Institution or may not

use all the money in your Account. In either case, you may name a new Beneficiary or take a

distribution of your Account assets. Any Non-Qualified Distribution from your Account will be

subject to applicable income taxes and may be subject to the Distribution Tax. See How to Take a

Distribution from your Account beginning on page 27.

You can change your Beneficiary at any time. To avoid negative tax consequences, the new

Beneficiary must be a Member of the Family of the original Beneficiary. Any change of the

Beneficiary to a person who is not a Member of the Family of the current Beneficiary is treated as a

Non-Qualified Distribution subject to applicable U.S. federal and state income taxes as well as the

Distribution Tax. An Account Owner who is an UGMA/UTMA Custodian will not be able to

change the Beneficiary of the Account, except as may be permitted under the applicable

UGMA/UTMA law. See Funding Methods – Moving Assets from an UGMA/UTMA Account

beginning on page 22.

To initiate a change of Beneficiary, you must complete and submit the appropriate beneficiary

change form. The change will be made upon our receipt and acceptance of the signed, properly

completed form(s) in good order. We reserve the right to suspend the processing of a Beneficiary

transfer if we suspect that the transfer is intended to avoid the Plan’s twice per calendar year

exchange and reallocation limits and/or the tax laws. Also, a Beneficiary change or transfer of assets

may be denied or limited if it causes one or more Accounts to exceed the Maximum Account

Account Maintenance:

Did you know that most transactions and changes to your Account can be

handled online by going to

scholarsedge529.com and logging into your Account?

Maintaining Your Account

Scholarsedge529.com

Balance for a Beneficiary. There is no Fee for changing a Beneficiary. You may also initiate a

change of Beneficiary online by logging into your Account at scholarsedge529.com.

When you change a Beneficiary, we will invest your assets in accordance with the Standing

Investment Instruction for the new Beneficiary’s Account. You can also transfer assets in your

Account to a new Investment Portfolio when you change the Beneficiary for your Account.

Changing Investment Portfolios. You may change Investment Portfolios twice per calendar year,

and with a permissible change in the Beneficiary. The twice per calendar year limitation on

reallocations applies in the aggregate across all of your accounts for the same Beneficiary under all

Qualified Tuition Programs sponsored by the State of New Mexico. You may exchange Units in a

Portfolio only for Units of the same Unit Class in another Portfolio. You can initiate this transaction

online, over the telephone by contacting a Client Service Representative at 1.866.529.7283, or by

downloading and submitting the appropriate exchange/future contribution form from our website at

scholarsedge529.com. Because you may make only two (2) changes per year as described above, it

is important that you select an Investment Portfolio that will meet your comfort level for risk in a

variety of market conditions.

Changing or Removing a Custodian. For an Account funded with assets originally held in an

UGMA/UTMA account, the Custodian may be released or replaced upon written notice to the Plan.

See Funding Methods – Moving Assets from an UGMA/UTMA Account on page 22.

Change of Account Owner. Except as discussed below, you may transfer control of your Account

assets to a new Account Owner. All transfers to a new Account Owner must be requested in writing

and include any information that may be required by us, including the designation of a Financial

Professional. However, your right of control may not be sold, transferred, used as collateral, or

pledged or exchanged for money or anything of value. We may require affidavits or other evidence

to establish that a transfer is non-financial in nature. Your right of control may also be transferred

under an appropriate court order as part of divorce proceedings or other legal proceedings. If you

transfer control of an Account to a new Account Owner, the new Account Owner must agree to be

bound by the terms and conditions of the Plan Description and Participation Agreement and

Enrollment Form.

Transferring an Account to a new Account Owner may have significant tax consequences. Before

doing so, you may want to check with your tax advisor regarding your particular situation.

Simultaneous Death of Account Owner and Beneficiary. If you and your Beneficiary both die and

there is no evidence to verify that one died before the other, the appointed Successor Account

Owner will become the Account Owner. If no Successor Account Owner has been appointed, the

fiduciary responsible for the disposition of the Beneficiary’s estate must designate the new Account

Owner. If no executor or fiduciary has been appointed, one must be appointed by a valid court order

for this purpose.

Recovery of Incorrect Amounts. If an incorrect amount is paid to or on behalf of you or your

Beneficiary, we may recover this amount from you or your Beneficiary, or any remaining balances

may be adjusted to correct the error. The processing of adjustments resulting from clerical errors or

other causes that are de minimis in amount may be waived at the discretion of the Board.

Correction of Errors. There is a 60-day period for making corrections. If, within sixty (60) days after

issuance of any Account statement or confirmation, you make no written objection to us regarding

an error in your Account that is reflected on that statement, the statement will be deemed correct and

Scholarsedge529.com

binding upon you and your Beneficiary. If you do not write us to object to a confirmation within

that time period, you will be considered to have approved it and to have released the Plan Officials

from all responsibility for matters covered by the confirmation. Each Account Owner agrees to

provide all information that we need to comply with any legal reporting requirements.

Internet Access. You have the option to perform Account- related transactions and activity online.

You can securely access and manage your Account information, including quarterly statements,

annual statements, transaction confirmations, and tax forms, 24 hours a day at scholarsedge529.com

once you have created an online user ID and password. If you choose to open an Account

electronically or register for online access to an existing Account, you can also choose to access

documents relating to your Account online. Please note that if you elect to receive documents

electronically, the only way to get paper copies of these documents will be to print them from a

computer. The Enrollment Kit and additional information about the Plan are available on our

website. These materials and this information may be supplemented from time to time throughout

the year. Any supplements will also be available on our website.

If you have elected electronic delivery, we may, from time to time, notify you by email that

documents, including Account statements and transaction confirmations, have been delivered.

However, email notification is not a substitute for regularly checking your Account at

scholarsedge529.com.

We may archive Account documents and cease providing them on our website when they become

out of date. You should consider printing any Account information that you may wish to retain

before it is removed. After these documents are archived, you will be able to obtain a copy for a Fee

by contacting a Client Service Representative at 1.866.529.7283.

You will be required to create a user ID and password and authenticate your device(s) in order to

access and perform transactions in your Account. You should not share your password with anyone

else. We will honor instructions from any person who provides correct identifying information, and

we are not responsible for fraudulent transactions we believe to be genuine according to these

procedures. Accordingly, you bear the risk of loss if unauthorized persons obtain your user ID and

password and conduct any transactions on your Account. You can reduce this risk by checking your

Account information regularly. You should avoid using passwords that can be guessed and should

consider changing your password frequently. For security purposes, our Client Service

Representatives will not ask you for your password. It is your responsibility to review your Account

information and to notify us promptly of any unusual activity. You can withdraw your consent to

receiving documents electronically at any time by contacting a Client Service Representative at

1.866.529.7283 or making the change online.

We cannot guarantee the privacy or reliability of email, so we will not honor requests for transfers

or changes received by email, nor will we send Account information through email. All transfers or

changes should be made through our secure website. Our website uses generally accepted and

available encryption software and protocols. This is designed to prevent unauthorized people from

eavesdropping or intercepting information sent by or received from us. This may require that you

use certain readily available versions of web browsers. As new security software or other

technology becomes available, we may enhance our systems.

Unclaimed Accounts and Uncashed Distribution Checks. Under certain circumstances, if there has

been no activity in your Account, if we have not been able to contact you for a period of time, or

you fail to cash a distribution check, your Account or the uncashed check may be considered

abandoned under New Mexico’s or your state’s unclaimed property laws. If your property is

Scholarsedge529.com

considered abandoned, it will, without proper claim by the Account Owner within a certain period

of years, revert to the State or your state. Maintaining and ensuring your account information is up

to date will assist the State or your state with properly contacting you should your Account be

considered abandoned.

Involuntary Termination of Accounts. Scholar’s Edge is not intended to be used, nor should it be

used, by any taxpayer for the purpose of evading U.S. federal or state taxes or tax penalties. We

may refuse to establish or may terminate an Account if we determine that it is in the best interest of

Scholar’s Edge or required by law. If we determine that you provided false or misleading

information to the Plan Officials or an Eligible Educational Institution in establishing or maintaining

an Account, or that you are restricted by law from participating in Scholar’s Edge, we may close

your Account. Trust interests redeemed as a result of closing your Account will be valued at the

Unit Value next calculated after we decide to close your Account, and the risk of market loss, tax

implications, and any other expenses, as a result of the liquidation, will be solely your

responsibility.

Scholarsedge529.com

The Fees associated with Scholar’s Edge, which may change from time to time without notice, are

described in this section. Any changes to the Fees will be included in any updated Plan Description

and Participation Agreements or Supplements.

Scholar’s Edge currently offers three Unit Classes for each Investment Portfolio: Class A Units,

Class C Units, and Class R Units. Each Unit Class has its own Fee structure. You should ask your

Financial Professional to assist you in choosing the Unit Class that best meets your goals. Class R

Units may not be available to you. Class R Units are designed for use in fee-based accounts through

qualified registered investment advisors or selling agents who buy through a broker/dealer in

advisory accounts. Class R Units may be sold by selling agents that charge brokerage commissions

and other transaction-related fees directly to their clients.

Provided below is an overview of the Fees associated with Scholar’s Edge. Following the overview,

detailed information is provided about the Fee structure for each Unit Class. See Class A Units –

Fees and Charges beginning on page 39, Class C Units – Fees and Charges beginning on page 45,

and Class R Units – Fees and Charges beginning on page 48.

Overview

Sales Charges. Class A and Class C Units are subject to sales charges. Class A Units are subject to a

maximum initial sales charge of 3.50% on the amount invested. Class C Units are subject to a

maximum CDSC of 1.00% if they are redeemed within one year of purchase. Class R Units are not

subject to any sales charges. There are no sales charges applicable to Class A or Class C Units of

the Scholar’s Edge Capital Preservation Portfolio. Class A Units of the Scholar’s Edge Capital

Preservation Portfolio purchased without an initial sales charge that are then exchanged to any other

Portfolio will be subject to a maximum initial sales charge of 3.50%. Class C Units of the Scholar’s

Edge Capital Preservation Portfolio purchased without an initial sales charge that are then

exchanged to any other Portfolio will be subject to a maximum CDSC of 1.00% if they are

redeemed within one year of purchase. Sales charges may be reduced or waived in certain limited

circumstances.

Total Annual Asset-Based Fee. Each Unit Class for each Investment Portfolio is subject to certain

annual asset-based Fees. The Total Annual Asset-Based Fee is the sum of Underlying Investment

Expenses, the Program Management Fee, and the Board Administrative Fee. For Class A and Class

C Units, the Total Annual Asset-Based Fee also includes the Distribution and Service Fee.

Range of Total Annual Asset

-Based Fees by Unit

Class as of the date of this Plan Description and

Participation

Agreement:

Class A: 0.53% – 1.33%

Class C: 0.78% – 2.08%

Class R: 0.28% – 1.08%

Fees and Charges

Scholarsedge529.com

• Program Management Fee (All Unit Classes). Each Portfolio is subject to an ongoing annual

Program Management Fee of 0.20%. The Program Manager receives the Program Management

Fee for services provided to Scholar’s Edge. It is intended that the Program Management Fee

will provide all income to the Program Manager necessary to cover the expenses of

administering Scholar’s Edge. This Fee is accrued daily and is factored into a Portfolio’s Unit

Value.

• Board Administrative Fee (All Unit Classes). Each Portfolio is subject to an ongoing annual

Board Administrative Fee of 0.08%. The Board receives the Board Administrative Fee to

administer and market the Plan. Any amounts deemed not necessary for such uses may be

used for any purpose related to the New Mexico 529 program.

• Distribution and Service Fee (Class A and C Only). Class A and C Units for each Portfolio are

subject to an ongoing annual Distribution and Service Fee of 0.25% and 1.00%, respectively.

PFD receives the Distribution and Service Fee to support the marketing and sale of Scholar’s

Edge and as compensation for services that PFD provides to the Plan. PFD uses amounts

received from the Distribution and Service Fee to pay third parties, such as your Financial

Professional, that provide distribution, marketing, and related services. This Fee is accrued

daily and is factored into a Portfolio’s Unit Value.

• Underlying Investment Expenses (All Unit Classes). The value of each Portfolio is reduced by

the expenses associated with its Underlying Investment(s). Underlying Investment Expenses may

increase or decrease over time. Except for the Scholar’s Edge Capital Preservation Portfolio,

each Portfolio invests in the shares of one or more mutual funds or exchange traded funds

(ETFs). The expenses associated with an investment in a mutual fund or ETF may include

investment advisory fees, administration fees, distribution and service fees, and other expenses.

These expenses are reflected in the mutual fund’s or ETF’s expense ratio, which is expressed as a

percentage of the fund’s average daily net assets. A mutual fund’s expense ratio may vary by

share class. See Appendix A: Additional Underlying Investment Information – Underlying Fund

Share Classes beginning on page 96 for the share classes of the Underlying Funds in which the

Portfolios invest.

Investment advisory and other fees paid by the Underlying Funds are payable to the funds’

respective investment advisors and other service providers, including the Investment Managers

and their affiliates. PGI is the Investment Manager for certain Underlying Funds.

The Scholar’s Edge Capital Preservation Portfolio and certain other Portfolios invest in the

Scholar’s Edge Guaranteed Contract, a funding agreement issued by Principal Life, an affiliate of

PGI and PFD. The Scholar’s Edge Guaranteed Contract does not have expenses like an

Underlying Fund. However, there are certain costs and expenses associated with the contract that

impact the interest rate credited by Principal Life under the contract. See Appendix A: Additional

Underlying Investment Information – Additional Information about the Scholar’s Edge

Guaranteed Contract on page 125.

Annual Account Maintenance Fee. An Annual Account Maintenance Fee of $20 is charged to each

Account and paid to the Program Manager. This Fee is waived if the Account balance is at least

$25,000, if you or your Beneficiary is a New Mexico Resident, or if you make Recurring

Contributions of at least $25 per month or $75 per quarter. The Fee, if not waived, will be assessed

on the first business day after the 20th calendar day in the anniversary month during which the

Account was opened. The Fee, if not waived, will be prorated if the Account is closed prior to that

date.

Scholarsedge529.com

Service-Based and Other Fees. We reserve the right to charge additional service-based and other

Fees if we consider them to be necessary and reasonable. We may also impose certain transactional

Fees up to the amounts specified below:

Transaction

Fee Amount*

Returned Check or

Rejected ACH

$25

Priority Delivery

$15 Weekday / $25

Saturday / $50 Foreign

Outgoing Wires

$15 Domestic / $25

International

Request for Historical

Statement

$10 per yearly statement

Electronic Payment to

Schools (where available)

$10

Rollover Out of the Plan

$10

* Subject to change without prior notice.

We reserve the right to not reimburse fees charged by financial institutions for contributions made

either via Recurring Contribution or EFT that are cancelled due to insufficient funds in the bank

account from which the money is withdrawn.

If you request delivery of distribution proceeds by priority delivery service, outgoing wire or, if

available, electronic payment to schools, Scholar’s Edge will deduct the applicable fee listed in the

table above directly from your Account and will include this fee amount on your annual IRS Form

1099-Q as part of the gross distributions paid to you during the year. In its discretion and without

prior notice, Scholar’s Edge may deduct directly from your Account the other fees and expenses

identified in the table above or similar fees or charges. Please consult your tax advisor regarding

calculating and reporting any tax liability associated with the payment of any of these fees out of

your Account in a year.

Float Income. The Program Manager may receive indirect compensation for the custodial services

that it provides to your Account. This compensation, known as “float” income, is paid by the

financial organization at which the Program Manager maintains “clearing accounts” or by the

investments in which the Program Manager invests in such clearing accounts. Float income may

arise from interest that is earned on Account contributions or distributions during the time that these

assets are held by the Program Manager in clearing accounts but are not invested in an Investment

Portfolio. For example, if you request a distribution and receive the distribution check but do not

cash it for several days, some interest may be earned while your funds remain in the clearing

account.

These clearing accounts generally earn interest at a rate between the money market rate and that of

U.S. Treasury Notes. The interest paid on each of these transactions is typically small, and it is

likely to represent a minor portion of the overall compensation received by the Program Manager or

other Plan service provider.

Scholarsedge529.com

Dealer Compensation. PFD distributes interests in Scholar’s Edge through Dealers, including your

Financial Professional, who are compensated by PFD for the distribution, marketing, administrative

support, or other services that they provide to the Plan. PFD uses sales charges and Distribution and

Service Fees under the Plan to compensate Dealers but may also compensate Dealers out of its own

assets. PFD may, from time to time, offer additional sales incentives to Dealers. These payments

may create a conflict of interest by influencing the Dealer or other intermediary and your Financial

Advisor to recommend Scholar’s Edge over other 529 plans or other investments. In addition,

because the compensation paid to Dealers by PFD varies by Unit Class, there may be an incentive

for a Dealer to recommend a particular Unit Class over another.

A Dealer must satisfy certain contractual arrangements with PFD in order to receive compensation

from PFD. PFD reserves the right to revise its compensation arrangements with Dealers at its

discretion.

Additional Fees or Commissions. Financial Professionals may charge additional fees or receive

commissions other than those disclosed in this Plan Description and Participation Agreement. You

should ask your Financial Professional about any fees it charges or commissions it receives. With

respect to Class R Units, the fees associated with fee-based accounts are determined separately

between you and your Financial Professional and are not a feature of or affiliated with Scholar’s

Edge. Class R Units may be sold by selling agents that charge brokerage commissions and other

transaction-related fees directly to their clients. These commissions and fees are not a feature of or

affiliated with Scholar’s Edge. You should ask your Financial Professional if they charge brokerage

commissions or other fees related to the purchase of Class R Units.

Additional Compensation to the Program Manager, PGI, or PFD. The Program Manager will also

receive compensation from certain Investment Managers and/or distributors or transfer agents for a

variety of transfer agency, distribution, and other related administrative services with respect to the

Plan. These services include, for example, processing purchases, redemptions, exchanges, dividend

reinvestments, consolidated statements, tax reporting, and other recordkeeping services. The

Program Manager, PGI, and/or PFD also provides a variety of distribution and marketing services

as well as other support to Investment Managers. These services include, but are not limited to,

support personnel for Financial Professionals, review and implementation of features of the

Underlying Investments, strategic planning support to assist Investment Managers, and the

provision of sale-related reports and other information. In consideration for these services, the

Program Manager, PGI, and/or PFD may receive compensation from the Investment Managers, the

Underlying Investments, and/or their respective distributors or transfer agents, and the Portfolios.

Reinstatement Option. If you have taken a Non-Qualified Distribution from your Account, you may

reinvest an amount equal to all or a portion of the Non-Qualified Distribution in the same Unit Class

at the Unit Value next determined after receipt in proper form of your investment order. The

reinvestment must be made within sixty (60) days of the Non-Qualified Distribution and may be

reinvested in any Portfolio. Under these circumstances, the dollar amount of the initial sales charge

or CDSC you paid, if any, on Units will be reimbursed to you by reinvesting that amount in the

same Unit Class. You may exercise this option only once per Portfolio and certain restrictions may

apply. For purposes of any CDSC, the holding period will continue as if the Class A or Class C

Units had not been withdrawn. You must indicate in writing that you are reinvesting under the

reinstatement privilege.

Availability of this option varies by Dealer. Please check with your Financial Advisor as to whether

the Dealer with which the Financial Advisor is associated with allows this option.

Scholarsedge529.com

Class A Units – Fees and Charges

Initial Sales Charge. If you invest in Class A Units, you will pay an initial sales charge of up to 3.50%

of the amount invested. The initial sales charge will be charged before your contribution is invested

in the Portfolio(s) you select. In certain limited circumstances, the initial sales charge may be reduced

or waived as described below.

Initial Sales Charge Breakpoint Schedule and Dealer Compensation. The maximum initial sales

charge applicable upon the purchase of Class A Units will be reduced according to the table below

based on your contribution amount. Rights of Accumulation may apply for purposes of calculating

your contribution amount. The table below also describes the portions of the maximum initial sales

charge that are (a) paid out by PFD as commissions to Dealers or (b) retained by PFD.

Contribution Amount

Maximum Initial Sales

Charge

1,3

Dealer Commission

1,3

Retained by

PFD

1,3

Up to $49,999

3.50%

3.00%

0.50%

$50,000 to $249,999

2.50%

2.00%

0.50%

$250,000 to $499,999

1.50%

1.25%

0.25%

$500,000 or Greater

0.00%

1.00%

0.00%

1. All percentages are a percentage of the amount invested.

2. The Program Manager or PFD will pay a dealer commission on aggregate contributions of

$500,000 or more from its own assets.

3. Subject to the paragraph immediately following this table.

PFD will pay a Dealer that establishes certain employer-sponsored investment plans that have elected to

allow Class A Unit purchases at NAV an upfront commission of 1.00%. PFD will also pay a 0.25%

annualized commission on amounts that are deposited to Scholar’s Edge. The 0.25% commission will be

paid beginning on the thirteenth month following the account opening date. PFD will pay such

commissions out of its own resources. PFD, in its discretion, may terminate

the payment of such

commissions at any time.

Notwithstanding the table above, the maximum initial sales charge will be 0% for one non-rollover,

lump-sum contribution of $75,000 or greater per Account. PFD will pay an upfront dealer

commission of 1.00% on any such lump-sum contribution used to purchase Class A Units of a

Portfolio. PFD will also pay a 0.25% dealer commission beginning on the thirteenth month

following such lump-sum contribution. The 0.25% commission amount will be calculated on the

then current Account value. PFD will pay such dealer commissions out of its own assets. PFD, in its

discretion, may terminate the payment of such commissions at any time. Any applicable contingent

deferred sales charges (CDSCs) will be waived on Qualified Distributions from such Accounts

receiving the initial sales charge waiver described above made within the first 12 months from the

date of the lump-sum contribution.

Rights of Accumulation. You may be able to receive a reduction in the initial sales charge on Class

A Units through Rights of Accumulation. Rights of Accumulation apply to Account Owners who

make a series of contributions to any Portfolio. If the combined value of holdings in (i) all Plan

Units (or any class) plus (ii) all Principal mutual Fund shares (as long as the broker of record for the

mutual Fund account is the same as for the Plan account) held by the Account Owner or their

immediate family members, or both, reaches a breakpoint discount level, the purchase of Class A

Units will receive the lower sales charge. However, the value of mutual funds for which no initial

sales charge was paid will not be considered for Rights of Accumulation. You and your immediate

Scholarsedge529.com

family member must indicate your eligibility for Rights of Accumulation on your Enrollment Form.

For purposes of Rights of Accumulation, a member of an immediate family includes spouse,

domestic partner, parent, legal guardian, child, sibling, stepchild, and father- or mother-in-law. The

current value of your holdings is determined at the Unit Value of each Portfolio at the close of

business on the day prior to your purchase of Class A Units and by the value of mutual fund shares

you and your immediate family members currently own as shown in the most recent account

statement provided to the Plan. The current value of your holdings will be added to your purchase

of Class A Units for the purpose of calculating your contribution amount. The reduced initial sales

charges described above resulting from Rights of Accumulation apply only if the Program Manager

is notified that a contribution qualifies for a reduced initial sales charge at the time the contribution

is made. The reduced initial sales charge will be granted upon confirmation of the aggregate

contributions to the applicable Accounts. Such reduced initial sales charges generally will not be

applied retroactively to contributions made prior to the contribution that qualifies for the applicable

reduced initial sales charge.

Letter of Intent. Under a Letter of Intent, you may be able to reduce the initial sales charge rate that

applies to your purchases of Class A Units. A Letter of Intent is an investor’s statement in writing to

the Program Manager of his or her intention to purchase a specified value of Class A Units in all his

or her Accounts in the Plan during a 13-month period, which begins on the date of receipt of the

Letter of Intent by the Program Manager. The initial sales charge on each purchase of Class A Units

during the 13-month period is assessed at the rate that would apply to a single lump-sum purchase

of Class A Units in the amount intended to be purchased under the Letter of Intent. In submitting a

Letter of Intent, the Account Owner makes no commitment to purchase Units. However, if the

Account Owner does not fulfill the terms of the Letter of Intent by the end of the 13-month period,

he or she agrees to pay the additional initial sales charges that would have been applicable to the

Class A Unit purchases that were made.

Contingent Deferred Sales Charge. A maximum CDSC of 1.00% may be charged if Class A Units

that were not subject to an initial sales charge are redeemed for a Non-Qualified Distribution within

12 months of purchase but will not be charged for a Qualified Distribution. The CDSC on such

Class A Units will be waived on any amount attributable to investment gains. The CDSC on such

Class A Units will also be waived if the distribution is made as a result of the death or Disability of

either the Account Owner or the Beneficiary. The CDSC is calculated using the lower of cost or

market value of Units redeemed.

Class A Units of the Scholar’s Edge Capital Preservation Portfolio purchased without an initial sales

charge that are then exchanged to any other Portfolio will be subject to the applicable sales charge

described above or, if the exchange is eligible for an initial sales charge waiver, the CDSC if they

are redeemed for a Qualified or Non-Qualified Distribution within 18 months of the exchange into

the new Portfolio.

Sales Charge Waivers. An initial sales charge and Dealer commissions will not apply to the

purchase of Class A Units under the following situations:

• Purchases by any employee, and any member of the immediate family of such

employee, of a firm with a selling agreement with Scholar’s Edge.*

• Purchases by any employee, and any member of the immediate family of such

employee, of a company affiliated with an Underlying Investment (as determined in the

Program Manager’s or PFD’s discretion).*

Scholarsedge529.com

• Purchases by the Program Manager, PGI, PFD, or any other their affiliates or

employees or such employees’ immediate family members.*

• Purchases by employees and registered representatives of the prior program manager,

OFI Private Investments Inc., or the prior distributor, Oppenheimer Funds Distributor,

Inc., who opened an Account in Scholar’s Edge prior to December 9, 2019.

• Purchases by Principal Securities, Inc. where no advisor is listed on the account or

where a house account is established.

• Purchases by certain employer-sponsored investment plans.

• Purchases by endowments, foundations, banks, broker-dealers, or other

approved financial institutions or institutional accounts that do not accept or

charge the initial sales charges.

• Purchases by current and former directors of Principal Funds, member companies of

Principal, and their active or retired employees, officers, directors, brokers, or agents, as

well as their immediate family members and trusts created by or primarily for the benefit

of any such individuals, for the life of their accounts.*

* For purposes of sales charge waivers, a member of an immediate family includes

spouse, domestic partner, parent, legal guardian, child, sibling, stepchild, and father- or

mother-in-law.

There are no sales charges applicable to Class A or Class C Units of the Scholar’s Edge Capital

Preservation Portfolio.

In addition to the circumstances set forth above, a purchase of Class A Units with assets rolled over

to the Plan from a Qualified Tuition Program sponsored by a state other than New Mexico may be

made without initial sales charges to the extent that the purchase is made through a Financial

Professional associated with a Dealer choosing to make the sales charge waiver available to its

clients.

Each Dealer is responsible for determining whether to make or not make the initial sales charge

waiver for rollovers to the Plan available to its clients. You should check with your Financial

Professional as to whether the Dealer with which the Financial Professional is associated makes the

initial sales charge waiver for rollovers available to its clients before initiating a rollover. No Plan

Official is responsible for a Dealer’s decision as to whether to make the initial sales charge waiver

available to its clients.

Rollovers from Other Section 529 Plans. Purchases of Class A Units with assets rolled over or

transferred to Scholar’s Edge from another Section 529 plan or from other Scholar’s Edge accounts

may be made without initial sales charges to the extent that the purchase is made through a

Financial Professional associated with a Dealer choosing to make the sales charge waiver available

to some or all of its clients. While the initial sales charge waiver is intended primarily for Account

Owners rolling over or transferring assets with respect to which initial sales charges have previously

been paid, a particular Dealer may choose to not make the initial sales charge waiver available for

any rollovers or transfers, or to extend the initial sales charge waiver to all rollovers or transfers to

Scholar’s Edge by such Dealer’s clients regardless of whether initial sales charges previously have

or have not been paid with respect to the assets being rolled over or transferred.

Scholarsedge529.com

Each Dealer is responsible for determining whether:

•

to never make the initial sales charge waiver for rollovers and transfers to Scholar’s

Edge available to its clients under any circumstances, or

•

to limit the initial sales charge waiver to rollovers and transfers by its clients where

initial sales charges previously have been paid with respect to the assets being rolled

over or transferred, or

•

to extend the initial sales charge waiver to all rollovers and transfers to Scholar’s Edge

by its clients regardless of whether initial sales charges previously have or have not

been paid with respect to the assets being rolled over or transferred.

Each Dealer also is responsible for:

•

making the initial sales charge waiver available to its clients who qualify for such

waiver based on the criteria established by such Dealer; and

•

verifying that any client to whom the initial sales charge waiver is granted in fact

qualifies for such waiver based on such criteria.

You should check with your Financial Professional as to whether the Dealer with which the

Financial Professional is associated makes the initial sales charge waiver for rollovers and transfers

available to its clients and, if so, under what circumstances, before initiating a rollover or transfer.

Eligibility for any initial sales charge waiver is limited to the purchase of Class A Units with assets

rolled over or transferred directly from another Section 529 plan or from other Scholar’s Edge

accounts. All other fees and expenses applicable to Class A Units will apply. Neither Scholar’s

Edge, the board, Ascensus, or PFD is responsible for a Dealer’s decision as to whether to make the

initial sales charge waiver available to its clients or, if so, under what circumstances. In addition,

neither Scholar’s Edge, the board, Ascensus, or PFD is responsible for: (i) verifying that a Dealer

has made the initial sales charge waiver available to qualifying clients based on the criteria

established by such Dealer; or (ii) verifying that an Account Owner to whom the initial sales charge

waiver is granted in fact qualifies for such waiver based on such criteria.

PFD will pay a Dealer that makes the initial sales charge waiver for rollovers to Scholar’s Edge

available to its clients an upfront commission of 1.00% and 0.25% per month on assets that are

rolled over to Scholar’s Edge from other Section 529 plans and used to purchase Class A Units of a

Portfolio other than the Cash Reserve Portfolio. The 0.25% commission will be paid beginning on

the thirteenth month following the commission-eligible rollover. The contingent deferred sales

charge (CDSC) will be waived on any Qualified Distributions within the first 12 months paid from a

rollover. The commission amount will be calculated on the then current Section 529 account value.

PFD will pay such commissions out of its own resources. PFD, in its discretion, may terminate the

payment of such commissions at any time. Certain Dealers may choose to decline receipt of such

upfront commissions with respect to rollovers to Scholar’s Edge that qualify for an initial sales

charge waiver.

Scholarsedge529.com

Fee Structure Table. The following table describes the Fees for the Class A Units of each Portfolio

in Scholar’s Edge.

CLASS A UNITS

PORTFOLIO

IN ADDITION TO A $20 ANNUAL ACCOUNT MAINTENANCE

FEE,

PORTFOLIOS BEAR THE FOLLOWING ANNUAL ASSET-

BASED FEES

ADDITIONAL

INVESTOR

EXPENSES

Estimated

Underlying

Investment

Expenses

Program

Management

Fee

Board

Administrative

Fee

Distribution

and Service

Fee

Total

Annual

Asset-

Based

Fee

Maximum

Initial Sales

Charge

Scholar’s Edge Year of Enrollment Portfolios

2042-2043 Portfolio 0.40% 0.20% 0.08% 0.25% 0.93% 3.50%

2040-2041 Portfolio 0.40% 0.20% 0.08% 0.25% 0.93% 3.50%

2038-2039 Portfolio 0.40% 0.20% 0.08% 0.25% 0.92% 3.50%

2036-2037 Portfolio 0.39% 0.20% 0.08% 0.25% 0.92% 3.50%

2034-2035 Portfolio 0.39% 0.20% 0.08% 0.25% 0.92% 3.50%

2032-2033 Portfolio 0.37% 0.20% 0.08% 0.25% 0.90% 3.50%

2030-2031 Portfolio 0.35% 0.20% 0.08% 0.25% 0.88% 3.50%

2028-2029 Portfolio 0.34% 0.20% 0.08% 0.25% 0.87% 3.50%

2026-2027 Portfolio 0.31% 0.20% 0.08% 0.25% 0.84% 3.50%

2024-2025 Portfolio 0.28% 0.20% 0.08% 0.25% 0.81% 3.50%

Today Portfolio 0.25% 0.20% 0.08% 0.25% 0.78% 3.50%

Scholar’s Edge Target Risk Portfolios

Aggressive Portfolio 0.39% 0.20% 0.08% 0.25% 0.92% 3.50%

Moderate Portfolio 0.35% 0.20% 0.08% 0.25% 0.88% 3.50%

Conservative Portfolio 0.31% 0.20% 0.08% 0.25% 0.84% 3.50%

Fixed Income Portfolio 0.25% 0.20% 0.08% 0.25% 0.78% 3.50%

Individual Portfolios

iShares S&P 500 Stock Index

Portfolio

0.03% 0.20% 0.08% 0.25% 0.56% 3.50%

Principal Blue Chip Portfolio 0.57% 0.20% 0.08% 0.25% 1.10% 3.50%

Scholarsedge529.com

Principal Equity Income

Portfolio

0.52% 0.20% 0.08% 0.25% 1.05% 3.50%

Vanguard Mid-Cap Index

Fund Portfolio

0.04% 0.20% 0.08% 0.25% 0.57% 3.50%

iShares Small Cap Index

Portfolio

0.06% 0.20% 0.08% 0.25% 0.59% 3.50%

Principal Diversified

International Portfolio

0.78% 0.20% 0.08% 0.25% 1.31% 3.50%

JPMorgan Emerging Markets

Equity Portfolio

0.80% 0.20% 0.08% 0.25% 1.33% 3.50%

Principal Core Fixed Income

Portfolio

0.38% 0.20% 0.08% 0.25% 0.91% 3.50%

iShares Core U.S. Aggregate

Bond Portfolio

0.03% 0.20% 0.08% 0.25% 0.56% 3.50%

Principal Short-Term Income

Portfolio

0.43% 0.20% 0.08% 0.25% 0.96% 3.50%

Vanguard Total World Stock

Portfolio

0.07% 0.20% 0.08% 0.25% 0.60% 3.50%

Vanguard Total International

Bond Portfolio

0.07% 0.20% 0.08% 0.25% 0.60% 3.50%

MainStay MacKay High Yield

Corporate Bond Portfolio

0.57% 0.20% 0.08% 0.25% 1.10% 3.50%

Scholar's Edge Capital

Preservation Portfolio

N/A

0.20% 0.08% 0.25% 0.53% 0.00%

Principal Real Estate

Securities Portfolio

0.80% 0.20% 0.08% 0.25% 1.33% 3.50%

The Annual Account Maintenance Fee of $20, which is waived if the Account balance is at least $25,000, if you or your Beneficiary is

a New Mexico Resident, or if you make Recurring Contributions of at least $25 per month or $75 per calendar quarter.

Underlying Investment Expenses are based on expenses of the Underlying Investments as of August 28, 2023, and may increase or

decrease over time. Estimated Underlying Investment Expenses for the Scholar’s Edge Year of Enrollment Portfolios and Scholar’s

Edge Target Risk Portfolios represent a weighted average of the expenses of the Portfolios’ respective Underlying Investments. See

fn. 6 below for information related to the Scholar’s Edge Guaranteed Contract, which is relevant to a Scholar’s Edge Year of

Enrollment Portfolio or Target Risk Portfolio to the extent that it invests in the Scholar’s Edge Guaranteed Contract.

The Program Management Fee for a Portfolio may be voluntarily reduced at any time on a temporary or permanent basis by the Program

Manager.

This total represents the sum of the annualized Estimated Underlying Investment Expenses, Program Management Fee, Board

Administrative Fee, and Distribution and Service Fee. It does not include the Annual Account Maintenance Fee.

These Portfolios invest all or a portion of their assets in ETFs. Because ETFs are traded on a securities exchange, Portfolios that invest in

ETFs will pay transaction costs when buying and selling shares of an ETF. These transaction costs are not listed in the table.

The Scholar’s Edge Capital Preservation Portfolio invests in the Scholar’s Edge Guaranteed Contract which does not have an expense ratio

like the Underlying Funds found in the other portfolios. The Scholar’s Edge Guaranteed Contract is a funding agreement issued by

Principal Life that provides a guaranteed interest rate to the Plan for a specified period of time that is backed by Principal Life’s general

account. While the calculation by Principal Life of the current interest rate under the contract is impacted by various costs and expenses

borne by Principal Life, such as losses incurred on the investments of the general account and lower investment returns due to timing of

contract cash flows relative to market conditions, such costs and expenses cannot be expressed as an expense ratio.

The maximum initial sales charge for the Scholar’s Edge Capital Preservation Portfolio is 0% as described in the section titled Sales

Charges.

Scholarsedge529.com

Class C Units – Fees and Charges

Contingent Deferred Sales Charge. Class C Units are sold without an initial sales charge. The full

amount of each contribution is invested in the Account. If Class C Units are redeemed for a

Qualified or Non-Qualified Distribution within one year of purchase, a maximum CDSC of 1.00%

may be charged. The CDSC on Class C Units will be waived on any amount attributable to

investment gains. The CDSC on Class C Units will also be waived if the distribution is made as a

result of the death or Disability of either the Account Owner or the Beneficiary. The CDSC is

calculated using the lower of cost or market value of Units redeemed.

There is no CDSC with respect to Class C Units of the Scholar’s Edge Capital Preservation

Portfolio. Class C Units of the Scholar’s Edge Capital Preservation Portfolio that are exchanged to

any other Portfolio will be subject to the applicable CDSC if they are redeemed within 12 months of

the exchange into the new Portfolio.

Dealer Compensation. Dealers receive commissions up to 1.00% of the amount invested in Class C

Units. PFD pays commissions to Dealers on the sale of Class C Units from amounts received from

ongoing Distribution and Service Fees or CDSCs charged on the redemption of Class C Units or

otherwise from its own assets.

Automatic Conversion to Class A Units. Class C Units are automatically converted into Class A Units

five years after the date of purchase, at which time such Units become subject to the Total Annual

Asset-Based Fees for Class A Units. The automatic conversion is not subject to any initial sales charge

or CDSC.

Fee Structure Table. The following table describes the Fees for the Class C Units of each Portfolio in

Scholar’s Edge.

Scholarsedge529.com

CLASS C UNITS

PORTFOLIO

IN ADDITION TO A $20 ANNUAL ACCOUNT MAINTENANCE FEE,

PORTFOLIOS BEAR THE FOLLOWING ANNUAL ASSET-BASED

FEES

ADDITIONAL

INVESTOR

EXPENSES

Estimated

Underlying

Investment

Expenses

Program

Management

Fee

Board

Administrative

Fee

Distribution

and Service

Fee

Total

Annual

Asset-

Based Fee

Contingent

Deferred Sales

Charge

Scholar’s Edge Year of Enrollment Portfolios

2042 - 2043 Portfolio 0.40% 0.20% 0.08% 1.00% 1.68% 1.00%

2040 - 2041 Portfolio 0.40% 0.20% 0.08% 1.00% 1.68% 1.00%

2038-2039 Portfolio 0.39% 0.20% 0.08% 1.00% 1.68% 1.00%

2036-2037 Portfolio 0.39% 0.20% 0.08% 1.00% 1.67% 1.00%

2034-2035 Portfolio 0.39% 0.20% 0.08% 1.00% 1.67% 1.00%

2032-2033 Portfolio 0.37% 0.20% 0.08% 1.00% 1.65% 1.00%

2030-2031 Portfolio 0.35% 0.20% 0.08% 1.00% 1.63% 1.00%

2028-2029 Portfolio 0.34% 0.20% 0.08% 1.00% 1.62% 1.00%

2026-2027 Portfolio 0.31% 0.20% 0.08% 1.00% 1.59% 1.00%

2024-2025 Portfolio 0.28% 0.20% 0.08% 1.00% 1.56% 1.00%

Today Portfolio 0.25% 0.20% 0.08% 1.00% 1.53% 1.00%

Scholar’s Edge Target Risk Portfolios

Aggressive Portfolio 0.39% 0.20% 0.08% 1.00% 1.67% 1.00%

Moderate Portfolio 0.35% 0.20% 0.08% 1.00% 1.63% 1.00%

Conservative Portfolio 0.31% 0.20% 0.08% 1.00% 1.59% 1.00%

Fixed Income Portfolio 0.25% 0.20% 0.08% 1.00% 1.53% 1.00%

Individual Portfolios

iShares S&P 500 Stock

Index Portfolio

0.03% 0.20% 0.08% 1.00% 1.31% 1.00%

Principal Blue Chip Portfolio 0.57% 0.20% 0.08% 1.00% 1.85% 1.00%

Scholarsedge529.com

Principal Equity Income

Portfolio

0.52% 0.20% 0.08% 1.00% 1.80% 1.00%

Vanguard Mid-Cap Index

Fund Portfolio

0.04% 0.20% 0.08% 1.00% 1.32% 1.00%

iShares Small Cap Index

Portfolio

0.06% 0.20% 0.08% 1.00% 1.34% 1.00%

Principal Diversified

International Portfolio

0.78% 0.20% 0.08% 1.00% 2.06% 1.00%

JPMorgan Emerging

Markets Equity Portfolio

0.80% 0.20% 0.08% 1.00% 2.08% 1.00%

Principal Core Fixed Income

Portfolio

0.38% 0.20% 0.08% 1.00% 1.66% 1.00%

iShares Core U.S. Aggregate

Bond Portfolio

0.03% 0.20% 0.08% 1.00% 1.31% 1.00%

Principal Short-Term Income

Portfolio

0.43% 0.20% 0.08% 1.00% 1.71% 1.00%

Vanguard Total World Stock

Portfolio

0.07% 0.20% 0.08% 1.00% 1.35% 1.00%

Vanguard Total International

Bond Portfolio

0.07% 0.20% 0.08% 1.00% 1.35% 1.00%

MainStay MacKay High

Yield Corporate Bond

Portfolio

0.57% 0.20% 0.08% 1.00% 1.85% 1.00%

Scholar's Edge Capital

Preservation Portfolio

0.20% 0.08% 0.50% 0.78%

0.00%

Principal Real Estate

Securities Portfolio

0.80% 0.20% 0.08% 1.00% 2.08% 1.00%

1. The Annual Account Maintenance Fee of $20, which is waived if the Account balance is at least $25,000, if you or your

Beneficiary is a New Mexico Resident, or if you make Recurring Contributions of at least $25 per month or $75 per

calendar quarter.

2. Underlying Investment Expenses are based on expenses of the Underlying Investments as of August 28, 2023, and may

increase or decrease over time. Estimated Underlying Investment Expenses for the Scholar’s Edge Year of Enrollment

Portfolios and Scholar’s Edge Target Risk Portfolios represent a weighted average of the expenses of the Portfolios’

respective Underlying Investments. See fn. 6 below for information related to the Scholar’s Edge Guaranteed Contract,

which is relevant to a Scholar’s Edge Year of Enrollment Portfolio or Target Risk Portfolio to the extent that it invests

in the Scholar’s Edge Guaranteed Contract.

3. The Program Management Fee for a Portfolio may be voluntarily reduced at any time on a temporary or permanent basis by

the Program Manager.

4. This total represents the sum of the annualized Estimated Underlying Investment Expenses, Program Management Fee,

Board Administrative Fee, and Distribution and Service Fee. It does not include the Annual Account Maintenance Fee.

5. These Portfolios invest all or a portion of their assets in ETFs. Because ETFs are traded on a securities exchange,

Portfolios that invest in ETFs will pay transaction costs when buying and selling shares of an ETF. These transaction

costs are not listed in the table.

6. The Scholar’s Edge Capital Preservation Portfolio invests in the Scholar’s Edge Guaranteed Contract which does not have

an expense ratio like the Underlying Funds found in the other portfolios. The Scholar’s Edge Guaranteed Contract is a

funding agreement issued by Principal Life that provides a guaranteed interest rate to the Plan for a specified period of time

that is backed by Principal Life’s general account. While the calculation by Principal Life of the current interest rate under

the contract is impacted by various costs and expenses borne by Principal Life, such as losses incurred on the investments

of the general account and lower investment returns due to timing of contract cash flows relative to market conditions, such

costs and expenses cannot be expressed as an expense ratio.

Scholarsedge529.com

Class R Units – Fees and Charges

Limited Availability. Class R Units may not be available to you. Class R Units are designed for use

in fee-based accounts through qualified registered investment advisors or selling agents who buy

through a broker/dealer in advisory accounts. The fees associated with fee-based accounts are

determined separately between you and your Financial Professional and are not a feature of or

affiliated with Scholar’s Edge.

No Sales Charges or Distribution and Service Fee. Class R Units are not subject to an initial sales

charge or a CDSC. Nor are Class R Units subject to a Distribution and Service Fee.

Dealer Compensation. Dealers receive no commissions on amounts invested in Class R Units.

Fee Structure Table. The following table describes the Fees for the Class R Units of each Portfolio

in Scholar’s Edge.

Selling Agent Commissions and Other Fees on the Purchase of Class R Units. Class R Units are not

subject to any sales charges through the Plan. However, selling agents may charge brokerage

commissions and other transaction-related fees directly to their clients for the purchase of Class R

Units. Such commissions and other fees are established by the selling agent and are disclosed by a

selling agent directly to its clients. These commissions and fees are not a feature of or affiliated with

Scholar’s Edge and are not included or reflected in the table below. You should ask your Financial

Professional about whether it charges brokerage commissions or other fees related to the purchase

of Class R Units.

CLASS R UNITS

PORTFOLIO IN ADDITION TO A $20 ANNUAL ACCOUNT MAINTENANCE FEE,

PORTFOLIOS

BEAR THE FOLLOWING ANNUAL ASSET-BASED FEES

Estimated Underlying

Investment Expenses

Program

Management Fee

Board

Administrative Fee

Total Annual

Asset-Based

Fee

Scholar’s Edge Year of Enrollment Portfolios

2042-2043 Portfolio

0.40%

0.20%

0.08%

0.68%

2040–2041 Portfolio

0.40%

0.20%

0.08%

0.68%

2038-2039 Portfolio

0.39%

0.20%

0.08%

0.67%

2036-2037 Portfolio

0.39%

0.20%

0.08%

0.67%

2034-2035 Portfolio

0.39%

0.20%

0.08%

0.67%

2032-2033 Portfolio

0.37%

0.20%

0.08%

0.65%

2030-2031 Portfolio

0.35%

0.20%

0.08%

0.63%

2028-2029 Portfolio

0.34%

0.20%

0.08%

0.62%

2026-2027 Portfolio

0.31%

0.20%

0.08%

0.59%

2024-2025 Portfolio

0.28%

0.20%

0.08%

0.56%

Today Portfolio

0.25%

0.20%

0.08%

0.53%

Scholar’s Edge Target Risk Portfolios

Aggressive Portfolio

0.39%

0.20%

0.08%

0.67%

Moderate Portfolio

0.35%

0.20%

0.08%

0.63%

Conservative Portfolio

0.31%

0.20%

0.08%

0.59%

Fixed Income Portfolio

0.25%

0.20%

0.08%

0.53%

Individual Portfolios

iShares S&P 500 Stock Index Portfolio

0.03%

0.20%

0.08%

0.31%

Scholarsedge529.com

Principal Blue Chip Portfolio

0.57%

0.20%

0.08%

0.85%

Principal Equity Income Portfolio

0.52%

0.20%

0.08%

0.80%

Vanguard Mid-Cap Index Fund Portfolio

0.04%

0.20%

0.08%

0.32%

iShares Small Cap Index Portfolio

0.06%

0.20%

0.08%

0.34%

Principal Diversified International Portfolio

0.78%

0.20%

0.08%

1.06%

JPMorgan Emerging Markets Equity

Portfolio

0.80%

0.20%

0.08%

1.08%

Principal Core Fixed Income Portfolio

0.38%

0.20%

0.08%

0.66%

iShares Core U.S. Aggregate Bond

Portfolio

0.03%

0.20%

0.08%

0.31%

Principal Short-Term Income Portfolio

0.43%

0.20%

0.08%

0.71%

Vanguard Total World Stock Portfolio

0.07%

0.20%

0.08%

0.35%

Vanguard Total International Bond

Portfolio

0.07%

0.20%

0.08%

0.35%

MainStay MacKay High Yield Corporate

Bond Portfolio

0.57%

0.20%

0.08%

0.85%

Scholar's Edge Capital

Preservation Portfolio

0.20%

0.08%

0.28%

Principal Real Estate Securities Portfolio

0.80%

0.20%

0.08%

1.08%

1. The Annual Account Maintenance Fee of $20, which is waived if the Account balance is at least $25,000, if you or your

Beneficiary is a New Mexico Resident, or if you make Recurring Contributions of at least $25 per month or $75 per calendar

quarter.

2. Underlying Investment Expenses are based on expenses of the Underlying Investments as of August 28, 2023, and may increase or

decrease over time. Estimated Underlying Investment Expenses for the Scholar’s Edge Year of Enrollment Portfolios and Scholar’s

Edge Target Risk Portfolios represent a weighted average of the expenses of the Portfolios’ respective Underlying Investments. See

fn. 6 below for information related to the Scholar’s Edge Guaranteed Contract, which is relevant to a Scholar’s Edge Year of

Enrollment Portfolio or Target Risk Portfolio to the extent that it invests in the Scholar’s Edge Guaranteed Contract.

3. The Program Management Fee for a Portfolio may be voluntarily reduced at any time on a temporary or permanent basis by the

Program Manager.

4. This total represents the sum of the annualized Estimated Underlying Investment Expense, Program Management Fee, and Board

Administrative Fee. It does not include the Annual Account Maintenance Fee.

5. These Portfolios invest all or a portion of their assets in ETFs. Because ETFs are traded on a securities exchange, Portfolios that

invest in ETFs will pay transaction costs when buying and selling shares of an ETF. These transaction costs are not listed in the

table.

6. The Scholar’s Edge Capital Preservation Portfolio invests in the Scholar’s Edge Guaranteed Contract which does not have an

expense ratio like the Underlying Funds found in the other portfolios. The Scholar’s Edge Guaranteed Contract is a funding

agreement issued by Principal Life that provides a guaranteed interest rate to the Plan for a specified period of time that is backed

by Principal Life’s general account. While the calculation by Principal Life of the current interest rate under the contract is

impacted by various costs and expenses borne by Principal Life, such as losses incurred on the investments of the general account

and lower investment returns due to timing of contract cash flows relative to market conditions, such costs and expenses cannot

be expressed as an expense ratio.

Approximate Cost for a $10,000 Investment

The following tables compare the approximate cost of investing in Scholar’s Edge over different

periods of time. Your actual cost may be higher or lower. The tables are based on the following

assumptions:

• A $10,000 contribution is invested for the time periods shown.

• A 5% annually compounded rate of return on the amount invested throughout the period.

• The total funds available in the Account are withdrawn at the end of the period shown to

pay for Qualified Expenses (the table does not consider the impact of any potential state

or U.S. federal taxes on the withdrawal).

• Total Annual Asset-Based Fees remain the same as those shown in the Fee Structure

Tables on pages 43, 46, and 48.

Scholarsedge529.com

• Expenses for each Investment Portfolio include the Annual Account Maintenance Fee of

$20.

• The Account Owner pays the applicable maximum initial sales charge (without regard to

possible breakpoints) for Class A Units and any applicable CDSC for Class C Units.

HYPOTHETICAL $10,000 INVESTMENT COST CHART: CLASS A UNITS

Portfolios 1 Year 3 Year 5 Year 10 Year

Scholar’s Edge Year of Enrollment Portfolios

2042-2043 Portfolio $461 $694 $942 $1,638

2040-2041 Portfolio $461 $694 $942 $1,638

2038-2039 Portfolio $461 $693 $941 $1,636

2036-2037 Portfolio $461 $692 $939 $1,631

2034-2035 Portfolio $460 $691 $937 $1,626

2032-2033 Portfolio $458 $685 $927 $,1606

2030-2031 Portfolio $457 $681 $919 $1,589

2028-2029 Portfolio $455 $676 $911 $1,570

2026-2027 Portfolio $453 $668 $898 $1,542

2024-2025 Portfolio $449 $657 $878 $1,499

Today Portfolio

$446

$649

$864

$1,469

Scholar’s Edge Target Risk Portfolios

Aggressive Portfolio $461 $692 $939 $1,631

Moderate Portfolio $457 $681 $919 $1,589

Conservative Portfolio $453 $668 $898 $1,542

Fixed Income Portfolio $446 $646 $860 $1,459

Individual Portfolios

iShares S&P 500 Stock Index Portfolio $425 $583 $751 $1,221

Principal Blue Chip Portfolio $477 $744 $1,027 $1,821

Principal Equity Income Portfolio $473 $732 $1,007 $1,777

Vanguard Mid-Cap Index Fund Portfolio $426 $586 $756 $1,233

iShares Small Cap Index Portfolio $428 $592 $767 $1,256

Principal Diversified International Portfolio $499 $810 $1,140 $2,060

JPMorgan Emerging Markets Equity Portfolio $500 $813 $1,145 $2,071

Principal Core Fixed Income Portfolio $460 $689 $955 $1,621

iShares Core U.S. Aggregate Bond Portfolio $425 $583 $751 $1,221

Principal Short-Term Income Portfolio $463 $698 $950 $1,655

Vanguard Total World Stock Portfolio $429 $595 $772 $1,268

Vanguard Total International Bond Portfolio $429 $595 $772 $1,268

MainStay MacKay High Yield Corporate Bond

Portfolio

$478 $747 $1,033 $1,832

Scholarsedge529.com

Scholar's Edge Capital Preservation Portfolio $422 $574 $735 $1,186

Principal Real Estate Securities Portfolio $501 $816 $1,156 $2,082

HYPOTHETICAL $10,000 INVESTMENT COST CHART: CLASS C UNITS

Portfolios

1 Year

3 Year

5 Year

10 Year

Scholar’s Edge Year of Enrollment Portfolios

2042-2043 Portfolio $290 $587 $1,007 $1,691

2040-2041 Portfolio $290 $587 $1,007 $1,691

2038-2039 Portfolio $290 $586 $1,006 $1,689

2036-2037 Portfolio $290 $585 $1,003 $1,684

2034-2035 Portfolio $289 $584 $1,001 $1,680

2032-2033 Portfolio $287 $578 $992 $1,659

2030-2031 Portfolio $286 $574 $984 $1,642

2028-2029 Portfolio $284 $568 $975 $1,624

2026-2027 Portfolio $282 $561 $962 $1,596

2024-2025 Portfolio $278 $549 942 $1,554

Today Portfolio $275 $541 $929 $1,524

Scholar’s Edge Target Risk Portfolios

Aggressive Portfolio $290 $585 $1,003 $1,684

Moderate Portfolio $286 $574 $984 $1,642

Conservative Portfolio $283 $561 $962 $1,596

Fixed Income Portfolio $274 $538 $924 $1,515

Individual Portfolios

iShares S&P 500 Stock Index Portfolio $253 $474 $815 $1,279

Principal Blue Chip Portfolio $307 $637 $1,092 $1,872

Principal Equity Income Portfolio $303 $625 $1,071 $1,828

Vanguard Mid-Cap Index Fund Portfolio $254 $477 $821 $1,290

iShares Small Cap Index Portfolio $256 $484 $831 $1,313

Principal Diversified International Portfolio $329 $704 $1,204 $2,109

JPMorgan Emerging Markets Equity Portfolio $330 $707 $1,209 $2,119

Principal Core Fixed Income Portfolio $289 $582 $999 $1,674

iShares Core U.S. Aggregate Bond Portfolio $253 $474 $815 $1,279

Principal Short-Term Income Portfolio $292 $592 $1,014 $1,708

Vanguard Total World Stock Portfolio $258 $490 $842 $1,336

Vanguard Total International Bond Portfolio $257 $487 $837 $1,325

MainStay MacKay High Yield Corporate Bond

Portfolio

$308 $641 $1,097 $1,883

Scholarsedge529.com

Scholar’s Edge Capital Preservation Portfolio $200 $309 $532 $989

Principal Real Estate Securities Portfolio $331 $710 $1,214 $2,130

HYPOTHETICAL $10,000 INVESTMENT COST CHART: CLASS R UNITS

Portfolios

1 Year

3 Year

5 Year

10 Year

Scholar’s Edge Year of Enrollment Portfolios

2042-2043 Portfolio $89 $276 $475 $1,034

2040-2041 Portfolio $89 $276 $475 $1,034

2038-2039 Portfolio $89 $275 $474 $1,031

2036-2037 Portfolio $88 $274 $471 $1,027

2034-2035 Portfolio $88 $272 $469 $1,021

2032-2033 Portfolio $86 $267 $459 $1,000

2030-2031 Portfolio $85 $262 $451 $981

2028-2029 Portfolio $83 $256 $442 $962

2026-2027 Portfolio $80 $249 $428 $932

2024-2025 Portfolio $76 $237 $407 $886

Today Portfolio $74 $228 $393 $854

Scholar’s Edge Target Risk Portfolios

Aggressive Portfolio $88 $274 $471 $1,027

Moderate Portfolio $85 $262 $451 $981

Conservative Portfolio $80 $249 $428 $932

Fixed Income Portfolio $73 $225 $388 $844

Individual Portfolios

iShares S&P 500 Stock Index Portfolio $52 $160 $274 $590

Principal Blue Chip Portfolio $106 $328 $564 $1,229

Principal Equity Income Portfolio $102 $315 $542 $1,182

Vanguard Mid-Cap Index Fund Portfolio $53 $163 $279 $602

iShares Small Cap Index Portfolio $55 $169 $290 $627

Principal Diversified International Portfolio $128 $397 $682 $1,483

JPMorgan Emerging Markets Equity Portfolio $129 $400 $688 $1,495

Principal Core Fixed Income Portfolio $87 $271 $466 $1,495

iShares Core U.S. Aggregate Bond Portfolio $52 $160 $274 $590

Principal Short-Term Income Portfolio $90 $280 $483 $1,051

Vanguard Total World Stock Portfolio $56 $172 $296 $640

Vanguard Total International Bond Portfolio $56 $172 $296 $640

MainStay MacKay High Yield Corporate Bond

Portfolio

$107 $331 $570 $1,240

Scholarsedge529.com

Scholar's Edge Capital Preservation Portfolio $49 $150 $257 $553

Principal Real Estate Securities Portfolio $130 $403 $693 $1,506

Scholarsedge529.com

Important Risks You Should Consider

You should carefully consider the information in this section, as well as the other information in the

Plan Description and Participation Agreement before making any decisions about opening an

Account or making any additional contributions. You should consult an attorney or a qualified

financial or tax advisor with any legal, business, or tax questions you may have. In addition, no

investment recommendation or advice you receive from your Financial Professional or any other

person is provided by, or on behalf of, the Plan Officials. The contents of the Plan Description and

Participation Agreement should not be construed as legal, financial, or tax advice.

The Plan is an Investment Vehicle. Accounts in the Plan are subject to certain risks. In addition,

certain Portfolios carry more and/or different risks than others. You should weigh these risks with

the understanding that they could arise at any time during the life of your Account. The Portfolios

are subject to the investment risks of their Underlying Investments. The investment risks of the

Underlying Investments are discussed in Appendix A: Additional Underlying Investment

Information beginning on page 96.

Principal and Returns Not Guaranteed. Neither your contributions to an Account nor any investment

return earned on your contributions are guaranteed by the Plan Officials. You could lose money

(including your contributions) or not make any money by investing in Scholar’s Edge.

An investment in Scholar’s Edge is not a bank deposit. Generally, investments in Scholar’s Edge are

not insured or guaranteed by the FDIC or any other government agency or by the Plan Officials.

Relative to investing for retirement, the holding period for those saving for Qualified Expenses is

very short (i.e., 5-20 years versus 30-60 years). Also, the need for liquidity when you wish to make

withdrawals from your Account (to pay for Qualified Expenses) generally is very important. You

should strongly consider the level of risk you wish to assume and your investment time horizon

prior to selecting an Investment Portfolio.

When changes are made to the Plan, such as (but not limited to) when there are changes to the

Portfolios, the Underlying Investments, or a transition to a new program or investment advisor,

there may be periods of time when the Portfolios in which you are invested hold only cash (or more

cash than usual) and are not exposed to the market.

During such time periods, you may not participate (or fully participate) in general market

movements.

Market Uncertainties and Other Events. Due to market uncertainties, the overall market value of

your Account could be highly volatile and could be subject to wide fluctuations in response to

factors, including but not limited to, regulatory or legislative changes, worldwide political

uncertainties, and general economic conditions (such as including inflation and unemployment

rates), acts of God, acts of civil force or military authority, acts of government, accidents,

environmental disasters, natural disasters or events, fires, floods, earthquakes, hurricanes,

explosions, lightning, suspensions of trading, epidemics, pandemics, public health crises,

quarantines, wars, acts of war (whether war is declared or not), terrorism, threats of terrorism,

insurrections, embargoes, cyber-attacks, riots, strikes, lockouts or other labor disturbances,

disruptions of supply chains, civil unrest, revolutions, power or other mechanical failures, loss or

malfunction of utilities or communications services, delays or stoppage of postal or courier services,

Scholarsedge529.com

delays in or stoppages of transportation, and any other events or circumstances beyond our

reasonable control whether similar or dissimilar to any of the foregoing (all enumerated and

described events in this section individually and collectively, “Force Majeure”).

Limited Investment Direction; Liquidity. Investments in a Qualified Tuition Program like Scholar’s

Edge are considered less liquid than other types of investments (e.g., investments in mutual fund

shares) because the circumstances in which you may withdraw money from your Account without a

penalty or adverse tax consequences are significantly more limited. Once you select a Portfolio for a

particular contribution, Section 529 provides that you can move money or transfer from that

Portfolio to another only twice per calendar year for the same Beneficiary. This limitation applies in

the aggregate across all of your accounts for the same Beneficiary under all Qualified Tuition

Programs sponsored by the State of New Mexico. Any additional transfers within that calendar year

will be treated as Non-Qualified Distributions, and they will be subject to U.S. federal and any

applicable state income taxes and the Distribution Tax.

Discretion of the Board; Potential Changes to the Plan. The Board has the sole discretion to

determine which Investment Portfolios will be available in the Plan. For example, the Board may,

without prior notice:

• change the Plan’s Fees;

• add or remove a Portfolio;

• merge or change the composition of investments within the Portfolios;

• close a Portfolio to new investors and/or new contributions; or

• change the Program Manager or other Plan service provider, an Investment Manager,

or the Underlying Investment(s) of a Portfolio.

Depending on the nature of the change, you may be required to participate, or be prohibited from

participating, in the change with respect to Accounts you open before the change.

If we change the Underlying Investments in the Plan, during the transition from one Underlying

Investment to another Underlying Investment, we may sell all the securities in the Portfolio before

purchasing new securities. Therefore, the Portfolio may temporarily not be invested in one of its

asset classes. During a transition period, a Portfolio may temporarily hold a basket of securities if

the Underlying Investment from which it is transitioning chooses to complete the transition by

exchanging one security for another. In this case, the Plan will seek to liquidate the securities

received from the Underlying Investment as promptly as practicable so that the proceeds can be

invested in the replacement Underlying Investment. The transaction costs associated with this type

of liquidation, as well as any market impact on the value of the securities being liquidated, will be

borne by the Portfolio and Accounts invested in the Portfolio. An Underlying Investment from

which a Portfolio redeems may also impose redemption fees. In this case, the Portfolio will bear the

cost of the redemption fees.

Suitability. The Plan Officials make no representation regarding the suitability or appropriateness of

the Plan or any of its Portfolios as an investment. There is no assurance that any Portfolio will be

able to achieve its goals.

Other types of investments may be more appropriate depending upon your financial status, tax

situation, risk tolerance, age, investment goals, savings needs, and the investment time horizons of

you or your Beneficiary.

You should consult your Financial Professional and/or tax advisor to seek advice concerning the

appropriateness of this investment. There are programs and investment options other than the Plan

Scholarsedge529.com

available as education investment alternatives. They may entail tax and other fee or expense

consequences and features different from the Plan including, for example, different investments and

different levels of Account Owner control. You may wish to consider these alternatives prior to

opening an Account.

Meeting College Expenses and Attendance at School Not Guaranteed. Even if you fund your

Account(s) to the Maximum Account Balance, there is no assurance that the money in your Account

will be sufficient to cover all the education expenses your Beneficiary may incur, or that the rate of

return on your investment will match or exceed the rate at which education expenses may rise each

year. In addition, there is no guarantee that the Beneficiary will be accepted to, allowed to continue

as a student by, or graduate from any particular school or institution. There is no guarantee that the

Beneficiary will be treated as a state resident of any state for Qualified Expenses purposes, or will

achieve any particular treatment under any applicable state or U.S. federal financial aid programs.

IRS Regulations Not Final. As of the date of this Plan Description and Participation Agreement, the

IRS has not issued final regulations regarding Qualified Tuition Programs. Scholar’s Edge has not

sought nor has it received a private letter ruling from the IRS regarding the status of Scholar’s Edge

under Section 529. If the IRS again begins issuing such private letter rulings, the Board may, in its

sole discretion, determine to seek such a ruling in the future.

Effect of Future Law Changes. It is possible that future changes in federal or state laws or court or

interpretive rulings could adversely affect the terms and conditions of the Plan, the value of your

Account, or the availability of state tax deductions, even retroactively. Specifically, Scholar’s Edge

is subject to the provisions of and any changes to or revocation of the Enabling Legislation.

In addition, it is the Board’s intention to take advantage of Section 529 and therefore, Scholar’s

Edge is vulnerable to tax law changes or court or interpretive rulings that might alter the tax

considerations described in Important Tax Information – Federal Tax Issues starting on page 79.

Death of Account Owner. If an Account Owner dies, control and ownership of the Account will be

transferred to the Successor Account Owner. If no Successor Account Owner has been named or if

the Successor Account Owner predeceases the Account Owner, control and ownership of the

Account will be transferred to the Beneficiary if the Beneficiary is 18 years or older.

If the Beneficiary is less than 18 years old, control and ownership of the Account will become

subject to the estate and guardianship laws of the state in which the Account Owner resided.

Upon the death of the Account Owner, the Successor Account Owner must submit a completed

Enrollment Form and a certified copy of the death certificate and any other documentation the Plan

reasonably requests. The account will become effective for the Successor Account Owner once this

paperwork has been received in good order and processed.

Tax Considerations; Tax Deduction Recapture. The U.S. federal and state tax consequences

associated with participating in the Plan can be complex.

You, as the Account Owner (not the contributor), must repay all or part, depending on the

circumstances, of the New Mexico state income tax deduction claimed in prior taxable years by any

contributors to your Account. See Important Tax Information – State Tax Issues – Recapture of

Income Tax Deduction on page 82. You should consult a tax advisor regarding the application of tax

laws to your particular circumstances.

Scholarsedge529.com

Cybersecurity Risk. The Plan is highly dependent upon the computer systems of its service

providers and their subcontractors. This makes the Plan susceptible to operational and information

security risks resulting from cyber threats and cyber-attacks which may adversely affect your

Account and cause it to lose value. For instance, cyber threats and cyber-attacks may interfere with

your ability to access your Account, make contributions or exchanges, request and receive

distributions; they may also impact the ability to calculate net asset values and/or impede trading.

Cybersecurity risks include security or privacy incidents, such as human error, unauthorized release,

theft, misuse, corruption, and destruction of Account data maintained online or digitally by the Plan.

Cybersecurity risks also include denial of service, viruses, malware, hacking, bugs, security

vulnerabilities in software, attacks on technology operations, and other disruptions that could

impede the Plan’s ability to maintain routine operations. Although the Plan undertakes efforts to

protect its computer systems from cyber threats and cyber-attacks, including internal processes and

technological defenses that are preventative in nature, and other controls designed to provide a

multi-layered security posture, there are no guarantees that the Plan, the Plan Officials, or your

Account will avoid losses due to cyber-attacks or cyber threats.

Securities Laws. Units held by the Accounts in the Plan are considered municipal fund securities.

The Units will not be registered as securities with the Securities and Exchange Commission (SEC)

or any state securities regulator. In addition, the Portfolios will not be registered as investment

companies under the Investment Company Act of 1940. Neither the SEC nor any state securities

commission has approved or disapproved the Units or passed upon the adequacy of the Plan

Description and Participation Agreement. Any representation to the contrary is illegal.

Relationship to Financial Aid. A Beneficiary may wish to participate in federal, state, or

institutional loans, grants, or other programs for funding higher education. An investment in

Scholar’s Edge may have an adverse impact on the Beneficiary’s eligibility to participate in needs-

based financial aid programs.

In making decisions about eligibility for financial aid programs offered by the U.S. government and

the amount of financial aid required, the U.S. Department of Education takes into consideration a

variety of factors, including, among other things, the assets owned by your Beneficiary and the

assets owned by the Beneficiary’s parents. Since the treatment of Account assets on the Free

Application for Federal Student Aid (FAFSA) may have a material adverse effect on your

Beneficiary’s eligibility to receive valuable benefits under financial aid programs, you or your

Beneficiary should check with your tax advisor regarding the impact of an investment in the Plan on

needs-based financial aid programs.

Scholar’s Edge Accounts are not considered when determining eligibility for state financial aid

programs in New Mexico. If you are not a New Mexico Resident, check with the financial aid office

of an Eligible Educational Institution for more information.

Scholarsedge529.com

Relationship of Your Account to Medicaid Eligibility. It is unclear how local and state government

agencies will treat Qualified Tuition Program assets for the purpose of Medicaid eligibility.

Although there are federal guidelines under Title XIX of the Social Security Act of 1965, each state

administers its Medicaid program and rules could vary greatly from one state to the next. You

should check with an attorney, a tax advisor, or your local Medicaid administrator regarding the

impact of an investment in the Plan on Medicaid eligibility.

General Portfolio Risks. Each Portfolio has its own investment strategy, risk, and performance

characteristics. In choosing the appropriate Portfolio(s) for your Account, you should consider your

investment objectives, risk tolerance, time horizon, and other factors you determine to be important.

A Portfolio’s risk and potential return are functions of its relative weightings of equity (or real

estate), fixed income, and capital preservation investments. Certain Portfolios carry more and/or

different risks than others. In general, the greater a Portfolio’s exposure to equity (or real estate)

investments, the higher its risk (especially short-term volatility) and its potential for superior long-

term performance. The more exposure a Portfolio has to fixed income and capital preservation

investments, the lower its risk and its potential long-term returns. There are also variations in

risk/return levels within asset categories. For example, international stocks typically have higher

risk levels than domestic stocks. Similarly, high yield (or junk) bonds have higher risk levels than

investment grade bonds.

There is no guarantee that the Investment Managers will continue to provide the Underlying Funds

for Scholar’s Edge or manage the Portfolio’s assets, as applicable, or that the Program Manager will

be able to negotiate their continued services in the future.

Appendix A: Additional Underlying Investment Information, beginning on page 96, provides

additional information about the Portfolios’ Underlying Investments. The Appendix includes

information about the Underlying Funds’ investment objectives, principal investment strategies, and

principal risks. The Appendix also includes information about the Scholar’s Edge Guaranteed

Contract.

Investment Portfolios Use for K-12 Tuition. The Investment Portfolios we offer through the Plan

have been designed for you to save for Qualified Expenses as defined in the Code, including higher

education, K-12 Tuition, Apprenticeship Expenses and Student Loan Payments. Specifically, the

Year of Enrollment Portfolios are designed for Account Owners seeking to automatically invest in

progressively more conservative Portfolios as their Beneficiary approaches enrollment age for

higher education. If you wish to save for K-12 Tuition, you may choose an enrollment date that is

earlier than if you were saving for higher education. This means you may have a significantly

shorter time horizon with less potential for growth than an investor saving for higher education. In

addition, if you are saving for K-12 Tuition and wish to invest in the Individual Portfolios and the

Target Risk Portfolios, please note that these Portfolios have static asset allocations. Their

Underlying Investments and their allocations among them generally do not change over time. Please

consult a qualified tax or investment advisor about your personal circumstances.

Scholarsedge529.com

In this section, you will find information about the Portfolios, including a discussion of the

Scholar’s Edge Year of Enrollment Portfolios, the Scholar’s Edge Target Risk Portfolios, and the

Individual Portfolios. You should consider the information in this section carefully before choosing

to invest in Scholar’s Edge. If you have questions about any of the investment-related information

in this section, please call a Client Service Representative at 1.866.529.7283 prior to making an

investment decision.

Here is where you can find specific investment information:

•

Investments Overview p. 59

•

Portfolio Descriptions p. 60

•

Additional Investment Information p. 69

•

Appendix A: Additional Underlying Investment Information p. 96

INVESTMENTS OVERVIEW

Your Account assets are held in the Trust for your exclusive benefit and cannot be transferred or

used by the Plan for any other purpose. Please keep in mind that you will not own shares of or

interests in the Underlying Investments. Instead, you are purchasing Units of Portfolios in the Trust.

Those Portfolios invest in one or more of the Underlying Investments.

You can choose between three investment approaches (Year of Enrollment, Target Risk, or

Individual) at the time your Account is established and each time you make additional contributions.

We offer:

•

Eleven (11) Scholar’s Edge Year of Enrollment Portfolios. These Portfolios automatically

move to progressively more conservative investments as the Portfolios approach their target

enrollment dates. Each Portfolio may invest in multiple Underlying Funds currently

managed by Principal, BlackRock, Vanguard, JPMorgan, and New York Life. As the

Portfolios become more conservative, they also increasingly invest in the Scholar’s Edge

Guaranteed Contract, which is a funding agreement issued by Principal Life.

•

Four (4) Scholar’s Edge Target Risk Portfolios. These Portfolios each have investment

objectives and strategies based on target risk levels. Each Portfolio invests in certain

Underlying Funds currently managed by Principal, BlackRock, Vanguard, or JPMorgan.

Certain of these Portfolios also invest in the Scholar’s Edge Guaranteed Contract issued by

Principal Life. The Scholar’s Edge Target Risk Portfolios’ allocations to the Underlying

Funds remain fixed over time.

Trust

Portfolios

Underlying

Investments

Investment Information

Scholarsedge529.com

• Fifteen (15) Individual Portfolios. Each of these Portfolios, except one, invests in an

Underlying Fund that primarily invests in U.S. equity, international equity, real estate, or

fixed income investments. The Underlying Funds are currently managed by Principal,

BlackRock, Vanguard, JPMorgan, and New York Life. The other Portfolio in this option

invests in the Scholar’s Edge Guaranteed Contract issued by Principal Life.

The Investment Portfolios we offer through the Plan have been designed for you to save for

Qualified Expenses as defined in the Code, including higher education, K-12 Tuition,

Apprenticeship Expenses and Student Loan Payments. Specifically, the Scholar’s Edge Year of

Enrollment Portfolios are designed for Account Owners seeking to automatically invest in

progressively more conservative Portfolios as they approach their target enrollment dates.

The Portfolios’ Underlying Investments are subject to change. There is no guarantee that the current

Investment Managers will manage any Underlying Fund of any Portfolio in the future, or that any

Portfolio will invest in a funding agreement issued by Principal Life.

PORTFOLIO DESCRIPTIONS

Year of Enrollment Portfolio Profiles

General. The eleven (11) Scholar’s Edge Year of Enrollment Portfolios give you a simplified

approach to investing. We have designed these Portfolios to allow you to select a Portfolio based

upon your Beneficiary’s anticipated year of enrollment in a school. For example, if you expect your

Beneficiary to attend school beginning in the year 2038 or 2039, you may choose to select the 2038-

2039 Portfolio, or you may choose one or more of the other Scholar’s Edge Year of Enrollment

Portfolios if they better suit your risk tolerance, investment time horizon, or savings goals. If you

wish to save for K-12 Tuition, you may consider choosing a Scholar’s Edge Year of Enrollment

Portfolio with an earlier target enrollment date than if you were saving for higher education, as you

may have a significantly shorter investment time horizon with less potential for growth than an

investor saving for higher education.

The asset allocations of these Portfolios, other than the Today Portfolio, are automatically adjusted

semiannually over time to become more conservative as the Portfolios’ target enrollment dates draw

nearer. The asset allocation for the Today Portfolio is not periodically adjusted because the Today

Portfolio has already reached its most conservative phase. About every two (2) years, a new Year of

Enrollment Portfolio is created, and the oldest Year of Enrollment Portfolio is merged into the

Today Portfolio.

Portfolios with higher allocations to fixed income investments (including the Scholar’s Edge

Guaranteed Contract) tend to be less volatile than those with higher allocations to equity

investments (including real estate). Less volatile Portfolios generally will not decline as far when

stock markets go down, but they also generally will not appreciate in value as much when stock

markets go up. There is no assurance that any Portfolio will be able to reach its goal.

Investment Objective, Strategy, and Risks. The following describes the Scholar’s Edge Year of

Enrollment Portfolios’ investment objective, strategy, and risks. The investment risks of the

Scholar’s Edge Year of Enrollment Portfolios are in addition to the general risks of investing in

Scholar’s Edge. See Important Risks You Should Consider starting on page 54.

• Investment Objective. Each Scholar’s Edge Year of Enrollment Portfolio seeks to achieve

total return consisting of long-term growth of capital, income, and preservation of capital

through asset allocations designed for Beneficiaries who are expected to enroll in college or

other qualified education programs during the Portfolios’ target enrollment dates.

Scholarsedge529.com

• Investment Strategy. Each Scholar’s Edge Year of Enrollment Portfolio allocates its assets

among mutual funds and ETFs. The Underlying Funds in which the Portfolios invest provide

access to broad asset classes that include (but are not limited to) U.S. and international

equities, real estate, bonds, and cash. The Portfolios may also invest in the Scholar’s Edge

Guaranteed Contract. The Portfolios’ asset allocations among the Underlying Investments

gradually become less focused on long-term growth of capital and more focused on income,

capital preservation, and volatility control as the Portfolios move closer to their specific target

enrollment dates. After the Portfolios reach their specific target enrollment dates, they are

merged into the Today Portfolio, which has a static asset allocation focused on capital

preservation and volatility control.

• Investment Risks. The Scholar’s Edge Year of Enrollment Portfolios are subject to the

investment risks of their Underlying Investments.



See Appendix A: Additional Underlying Investment Information – Investment

Objectives, Principal Investment Strategies, and Principal Risks of the

Underlying Funds starting on page 97 for information about the investment risks

of the Underlying Funds.

 See Appendix A: Additional Underlying Investment Information – Additional

Information about the Scholar’s Edge Guaranteed Contract starting on page 125

for risk information related to the Scholar’s Edge Guaranteed Contract.

The asset allocation of each Scholar’s Edge Year of Enrollment Portfolio is derived using

quantitative models that have been developed based on a number of factors. Neither the Plan nor the

Plan Officials can offer any assurance that the recommended asset allocation will either maximize

returns or minimize risk or be the appropriate allocation in all circumstances for every investor with

a particular time horizon or risk tolerance.

Target Asset Allocations. The Scholar’s Edge Year of Enrollment Portfolios’ target asset allocations

among certain asset classes will change over their lifespans, progressively becoming more

conservative as they approach their target enrollment dates. A diagram of this glide path is shown

below.

Scholarsedge529.com

The following table shows the Scholar’s Edge Year of Enrollment Portfolios’ target asset

allocations among their Underlying Investments as of the date of this Plan Description and

Participation Agreement. Their current target asset allocations are available at

scholarsedge529.com. The Scholar’s Edge Year of Enrollment Portfolios are rebalanced on an

ongoing basis to ensure that they are allocated as close to their target asset allocations as possible.

Underlying

Investments

(Ticker if

available)

Scholar’s Edge Year of Enrollment Portfolios

2042-

2043

2040-

2041

2038-

2039

2036-

2037

2034-

2035

2032-

2033

2030-

2031

2028-

2029

2026-

2027

2024-

2025

Today

U.S. Equity

iShares S&P

500 Stock Index

ETF (IVV)

26.05%

24.95%

22.65%

23.85%

22.10%

17.80%

15.50%

10.00%

5.00%

3.90%

Principal Blue

Chip R6 Fund

(PGBHX)

13.05%

12.45%

11.35%

11.90%

11.05%

8.95%

7.75%

5.00%

2.50%

1.90%

Principal Equity

Income

Institutional

Fund (PEIIX)

13.05%

12.45%

11.35%

11.90%

11.05%

8.95%

7.75%

5.00%

2.50%

1.90%

Vanguard Mid-

Cap Index Fund

Institutional

(VMCIX)

10.45%

10.00%

9.10%

5.60%

5.20%

4.20%

0.00%

iShares Small

Cap Index ETF

(IJR)

6.95%

6.65%

6.05%

2.80%

2.60%

2.10%

0.00%

International Equity

Principal

Diversified

International R6

Fund (PDIFX)

25.15%

24.30%

22.50%

20.65%

18.80%

15.05%

11.25%

7.05%

2.80%

2.15%

JP Morgan

Emerging

Markets Equity

R6 (JEMWX)

2.80%

2.70%

2.50%

1.30%

1.20%

0.95%

0.75%

0.45%

0.20%

0.15%

Fixed Income

Principal Core

Fixed Income

R6 Fund

(PICNX)

0.00%

3.20%

9.60%

12.80%

17.90%

26.90%

27.35

34.80%

38.40%

32.00%

iShares Core

U.S. Aggregate

Bond (AGG)

0.00%

0.80%

2.40

3.20%

4.50%

6.70%

6.85

8.70%

9.60%

8.00%

Principal Short-

Term Income

Institutional

Fund (PSHIX)

0.00%

0.00

2.00%

2.80%

4.20%

11.40%

14.50%

17.40%

20.00%

Funding Agreement

Scholar’s Edge

Guaranteed

Contract

0.00%

2.00%

2.80%

4.20%

11.40%

14.50%

21.60%

30.00%

Real Estate

Principal Real

Estate Securities

R6 Fund

(PFRSX)

2.50%

2.00%

0.00%

Total Equity

and Real

Estate

100.0%

96.0%

88.0%

80.0%

72.0%

58.00%

43.0

27.50%

13.0%

10.0%

Scholarsedge529.com

Total Fixed

Income and

Funding

Agreement

0.00%

4.00%

12.00%

20.00%

28.00%

42.00%

57.0%

72.50%

87.0%

90.0%

Please note that target allocations above may reflect rounding. Target asset allocations may change

from time to time, and actual asset allocations will change with fluctuations in the value of each

Underlying Investment.

Target Risk Portfolio Profiles

General Description. Like the Scholar’s Edge Year of Enrollment Portfolios, the Target Risk

Portfolios invest in multiple Underlying Funds and may invest in the Scholar’s Edge Guaranteed

Contract. However, unlike the Scholar’s Edge Year of Enrollment Portfolios, the Scholar’s Edge

Target Risk Portfolios do not change their target asset allocations for their Underlying Investments

over time. Instead, each Scholar’s Edge Target Risk Portfolio has an investment objective and

strategy based on a specific target risk level and asset allocation that remains fixed over time.

The order of the Scholar’s Edge Target Risk Portfolios by risk level, from most aggressive to most

conservative, is: Aggressive Portfolio, Moderate Portfolio, Conservative Portfolio, Fixed Income

Portfolio. The risk level of a Portfolio primarily relates to the extent to which it invests in equity and

fixed income investments. If you choose to invest in a Target Risk Portfolio with a significant

weighting in equity investments (including real estate), such as the Aggressive Portfolio, you might

consider moving your assets to the more conservative Target Risk Portfolios with significant

weightings in fixed income investments (including the Scholar’s Edge Guaranteed Contract) as your

Beneficiary approaches school age or as your investment time horizon otherwise shortens. Please

note that there are limitations on your ability to move assets from one Portfolio to another. See

Maintaining Your Account starting on page 31.

Investment Objectives, Strategies, and Risks. The following describes the Scholar’s Edge Target

Risk Portfolios’ investment objectives, strategies, and risks. The investment risks of the Scholar’s

Edge Target Risk Portfolios are in addition to the general risks of investing in Scholar’s Edge. See

Important Risks You Should Consider starting on page 54.

• Aggressive Portfolio. Seeks to provide long-term growth of capital.

• Moderate Portfolio. Seeks to provide growth of capital and total return.

• Conservative Portfolio. Seeks to provide a high level of total return, capital

preservation, and some growth of capital.

• Fixed Income Portfolio. Seeks to provide a high level of current income

consistent with capital preservation.

• Investment Strategies. Each Scholar’s Edge Target Risk Portfolio allocates its assets among

ETFs and mutual funds. The ETFs and mutual funds in which the Portfolios invest provide

access to broad asset classes that include (but are not limited to) U.S. and international

equities, bonds, real estate, and cash. The Portfolios may also invest in the Scholar’s Edge

Guaranteed Contract. The Portfolios’ target asset allocations, which are designed based on

their respective target risk profiles and investment objectives, generally remain static.

• Aggressive Portfolio. A target asset allocation of 88% equity and 12% fixed income

investments.

• Moderate Portfolio. A target asset allocation of 58% equity and 42% fixed income

Scholarsedge529.com

investments.

• Conservative Portfolio. A target asset allocation of 27.5% equity and 72.5% fixed

income investments.

• Fixed Income Portfolio. A target asset allocation of 100% fixed income investments.

• Investment Risks. The Scholar’s Edge Target Risk Portfolios are subject to the investment

risks of their Underlying Investments.

• See Appendix A: Additional Underlying Investment Information – Investment

Objectives, Principal Investment Strategies, and Principal Risks of the Underlying

Funds starting on page 96 for information about the investment risks of the

Underlying Funds.

• See Appendix A: Additional Underlying Investment Information – Additional

Information about the Scholar’s Edge Guaranteed Contract starting on page 124 for

risk information related to the Scholar’s Edge Guaranteed Contract.

Target Asset Allocations. The following table shows the Scholar’s Edge Target Risk Portfolios’

target asset allocations among their Underlying Investments. The Scholar’s Edge Target Risk

Portfolios are rebalanced on an ongoing basis to ensure that they are allocated as close to the target

allocations as possible.

Static Allocation Portfolios

Aggressive

Moderate

Conservative

Fixed Income

Asset Class Fund/ETF

U.S Equity

iShares S&P 500 Stock

Index ETF (IVV)

22.65% 17.80% 10.00% 0.00%

Principal Blue Chip R6

Fund (PGBHX)

11.35% 8.95% 5.00% 0.00%

Principal Equity

Income Inst Fund

(PEIIX)

11.35% 8.95% 5.00% 0.00%

Vanguard Mid-Cap

Index Fund

Institutional Shares

(VMCIX)

9.10% 4.20% 0.00% 0.00%

iShares Small Cap

Index ETF (IJR)

6.05% 2.10% 0.00% 0.00%

International

Equity

Principal Diversified

International R6 Fund

(PDIFX)

22.50% 15.05% 7.05% 0.00%

JPMorgan Emerging

Markets Equity R6

(JEMWX)

2.50% 0.95% 0.45% 0.00%

Fixed

Income

Principal Core Fixed

Income R6 Fund

(PICNX)

9.60% 26.90% 34.80% 40.00%

iShares Core U.S.

Aggregate Bond

(AGG)

2.40% 6.70% 8.70% 10.00%

Scholarsedge529.com

Principal Short-Term

Income Inst Fund

(PSHIX)

0.00% 4.20% 14.50% 20.00%

GIC

Scholar's Edge

Guaranteed Contract

0.00% 4.20% 14.50% 30.00%

Real Estate

Principal Real Estate

Securities R6 Fund

(PFRSX)

2.50% 0.00% 0.00% 0.00%

Total Equity and Real Estate 88.00% 58.00% 27.50% 0.00%

Total Fixed Income and Funding

Agreement

12.00% 42.00% 72.50% 100.00%

Please note that target allocations above may reflect rounding. Target asset allocations may change

from time to time, and actual asset allocations will change with fluctuations in the value of each

Underlying Investment.

Individual Portfolios

General Description. Unlike the Scholar’s Edge Year of Enrollment Portfolios and the Scholar’s

Edge Target Risk Portfolios, each Individual Portfolio invests in a single Underlying Investment. In

addition, unlike the Scholar’s Edge Year of Enrollment Portfolios, each Individual Portfolio’s

Underlying Investment does not change over time.

Each Individual Portfolio provides access to an asset class such as (but not limited to) U.S. and

international equities, bonds, real estate, or cash. One Individual Portfolio invests in the Scholar’s

Edge Guaranteed Contract. Please note that there are limitations on your ability to move assets from

one Portfolio to another. See Maintaining Your Account starting on page 31.

The following table lists each Individual Portfolio and its Underlying Investment.

Individual Portfolios

Asset Class Fund/ETF

U.S. Large Cap iShares S&P 500 Stock Index ETF (IVV)

U.S. Large Cap Principal Blue Chip R6 Fund (PGBHX)

U.S. Large Cap Principal Equity Income Inst Fund (PEIIX)

U.S. Mid Cap Vanguard Mid-Cap Index Fund Institutional Shares (VMCIX)

U.S. Small Cap iShares Small Cap Index ETF (IJR)

Non-U.S. Equity Principal Diversified International R6 Fund (PDIFX)

Emerging Market

Equity

JPMorgan Emerging Markets Equity R6 (JEMWX)

Core Fixed Income

Principal Core Fixed Income R6 Fund (PICNX)

Core Fixed Income

iShares Core U.S. Aggregate Bond (AGG)

Scholarsedge529.com

Short Term Fixed

Income

Principal Short-Term Income Inst Fund (PSHIX)

Global Equity

Vanguard Total World Stock ETF (VT)

Non-U.S. Fixed

Income

Vanguard Total International Bond ETF (BNDX)

U.S. High Yield

MainStay MacKay High Yield Corporate Bond (MHYSX)

GIC

Scholar's Edge Guaranteed Contract

U.S. Real Estate Principal Real Estate Securities R6 Fund (PFRSX)

Investment Objective, Strategy, and Risks. The table below describes the Individual Portfolios’

respective investment objectives, strategies, and risks. Each Individual Portfolio is subject to the

investment risks of its Underlying Investment.

• See Appendix A: Additional Underlying Investment Information – Investment Objectives,

Principal Investment Strategies, and Principal Risks of the Underlying Funds starting on

page 97 for information about the investment risks of the Underlying Funds.

• See Appendix A: Additional Underlying Investment Information – Additional Information

about the Scholar’s Edge Guaranteed Contract starting on page 125 for risk information

related to the Scholar’s Edge Guaranteed Contract.

The investment risks of the Individual Portfolios are in addition to the general risks of investing in

Scholar’s Edge. See Important Risks You Should Consider starting on page 54.

iShares Core U.S. Aggregate Bond Portfolio

Investment Objective. The iShares Core U.S. Aggregate Bond Portfolio seeks to track the investment

results of an index composed of the total U.S. investment-grade bond market.

Investment Strategy. The Portfolio invests 100% of its assets in the iShares Core U.S. Aggregate Bond

ETF. The iShares Core U.S. Aggregate Bond ETF seeks to track the investment results of the Bloomberg

Barclays U.S. Aggregate Bond Index, which measures the performance of the total U.S. investment-grade

(as determined by Bloomberg Index Services Limited) bond market.

Investment Risks. The Portfolio is subject to the same investment risks as the iShares Core U.S. Aggregate

Bond ETF.

iShares S&P 500 Stock Index Portfolio

Investment Objective. The iShares S&P 500 Stock Index Portfolio seeks to track the investment results of

an index composed of large-capitalization U.S. equities.

Investment Strategy. The Portfolio invests 100% of its assets in the iShares Core S&P 500 ETF. The

iShares Core S&P 500 ETF seeks to track the investment results of the S&P 500 index, which measures

the performance of the large-capitalization sector of the U.S. equity market, as determined by S&P Dow

Jones Indices LLC.

Investment Risks. The Portfolio is subject to the same investment risks as the iShares Core S&P 500 ETF.

iShares Small Cap Index Portfolio

Investment Objective. The iShares Small Cap Index Portfolio seeks to track the investment results of an

index composed of small-capitalization U.S. equities.

Scholarsedge529.com

Investment Strategy. The Portfolio invests 100% of its assets in the iShares Core S&P Small-Cap ETF.

The iShares Core S&P Small-Cap ETF seeks to track the investment results of the S&P Small Cap 600

index, which measures the performance of the small capitalization sector of the U.S. equity market, as

determined by S&P Dow Jones Indices LLC.

Investment Risks. The Portfolio is subject to the same investment risks as the iShares Core S&P Small-

Cap ETF.

JPMorgan Emerging Markets Equity Portfolio

Investment Objective. The JPMorgan Emerging Markets Equity Portfolio seeks to provide high total

return.

Investment Strategy. The Portfolio invests 100% of its assets in the JPMorgan Emerging Markets Equity

Fund. Under normal circumstances, the JPMorgan Emerging Markets Equity Fund invests at least 80% of

the value of its assets in equity securities and equity-related instruments that are tied economically to

emerging markets.

Investment Risks. The Portfolio is subject to the same investment risks as the JPMorgan Emerging

Markets Equity Fund.

MainStay MacKay High Yield Corporate Bond Portfolio

Investment Objective. The MainStay MacKay High Yield Corporate Bond Portfolio seeks maximum

current income through investment in a diversified portfolio of high-yield debt securities. Capital

appreciation is a secondary objective.

Investment Strategy. The Portfolio invests 100% of its assets in the MainStay MacKay High Yield

Corporate Bond Fund. The MainStay MacKay High Yield Corporate Bond Fund, under normal

circumstances, invests at least 80% of its assets (net assets plus any borrowings for investment purposes)

in high-yield corporate debt securities. Securities that are rated below investment grade by independent

rating agencies are commonly referred to as “high-yield securities” or “junk bonds.”

Investment Risks. The Portfolio is subject to the same investment risks as the MainStay MacKay High

Yield Corporate Bond Fund.

Principal Blue Chip Portfolio

Investment Objective. The Principal Blue Chip Portfolio seeks long-term growth of capital.

Investment Strategy. The Portfolio invests 100% of its assets in the Principal Blue Chip Fund. Under

normal circumstances, the Principal Blue Chip Fund invests at least 80% of its net assets, plus any

borrowings for investment purposes, in equity securities of companies with large market capitalizations at

the time of purchase that, in the opinion of Principal Global Investors, LLC (the fund’s investment

advisor), display characteristics of a “blue chip” company.

Investment Risks. The Portfolio is subject to the same investment risks as the Principal Blue Chip Fund.

Principal Equity Income Portfolio

Investment Objective. The Principal Equity Income Portfolio seeks to provide current income and long-

term growth of income and capital.

Investment Strategy. The Portfolio invests 100% of its assets in the Principal Equity Income Fund. Under

normal circumstances, the Principal Equity Income Fund invests at least 80% of its net assets, plus any

borrowings for investment purposes, in dividend-paying equity securities at the time of purchase.

Investment Risks. The Portfolio is subject to the same investment risks as the Principal Equity Income

Fund.

Principal Income Portfolio

Scholarsedge529.com

Investment Objective. The Principal Income Portfolio seeks to provide a high level of current income

consistent with preservation of capital.

Investment Strategy. The Portfolio invests 100% of its assets in the Principal Core Fixed Income Fund.

Under normal circumstances, the Principal Core Fixed Income Fund invests primarily in a diversified pool

of investment-grade fixed-income securities, including corporate securities, U.S. government securities,

asset-backed securities, and mortgage-backed securities (securitized products) (including collateralized

mortgage obligations), and foreign securities.

Investment Risks. The Portfolio is subject to the same investment risks as the Principal Core Fixed Income

Fund.

Principal Real Estate Securities Portfolio

Investment Objective. The Principal Real Estate Securities Portfolio seeks to generate a total return.

Investment Strategy. The Portfolio invests 100% of its assets in the Principal Real Estate Securities Fund.

Under normal circumstances, the Principal Real Estate Securities Fund invests at least 80% of its net

assets, plus any borrowings for investment purposes, in equity securities of companies principally engaged

in the real estate industry at the time of purchase.

Investment Risks. The Portfolio is subject to the same investment risks as the Principal Real Estate

Securities Fund.

Principal Short-Term Income Portfolio

Investment Objective. Principal Short-Term Income Portfolio seeks to provide as high a level of current

income as is consistent with prudent investment management and stability of principal.

Investment Strategy. The Portfolio invests 100% of its assets in the Principal Short-Term Income Fund.

The Principal Short-Term Income Fund invests primarily in high quality short-term bonds and other fixed-

income securities that, at the time of purchase, are rated BBB- or higher by S&P Global Ratings or Baa3

or higher by Moody’s Investors Service, Inc.

Investment Risks. The Portfolio is subject to the same investment risks as the Principal Short-Term

Income Fund.

Principal Diversified International Portfolio

Investment Objective. The Principal Diversified International Portfolio seeks long-term growth of capital.

Investment Strategy. The Portfolio invests 100% of its assets in the Principal Diversified International

Fund. The Principal Diversified International Fund invests primarily in foreign equity securities.

Investment Risks. The Portfolio is subject to the same investment risks as the Principal Diversified

International Fund.

Scholar’s Edge Capital Preservation Portfolio

Investment Objective. The Scholar’s Edge Capital Preservation Portfolio seeks a stable principal while

providing interest.

Investment Strategy. The Portfolio invests 100% of its assets in the Scholar’s Edge Guaranteed Contract

issued to the Plan by Principal Life. Under the contract, principal and a rate of interest are guaranteed to

the Plan by Principal Life. Principal Life guarantees the interest rate under the Contract will be at least

1%.

Investment Risks. The Portfolio is subject to the risk that Principal Life will become unable to make its

payment obligations under the contract.

Vanguard Mid Cap Index Portfolio

Investment Objective. The Vanguard Mid Cap Index Portfolio seeks to track the performance of a

benchmark index that measures the investment return of mid-capitalization stocks.

Scholarsedge529.com

Investment Strategy. The Portfolio invests 100% of its assets in the Vanguard Mid-Cap Index Fund. The

Vanguard Mid-Cap Index Fund employs an indexing investment approach designed to track the

performance of the CRSP US Mid Cap Index, a broadly diversified index of stocks of mid-size U.S.

companies.

Investment Risks. The Portfolio is subject to the same investment risks as the Vanguard Mid-Cap Index

Fund.

Vanguard Total International Bond Portfolio

Investment Objective. The Vanguard Total International Bond Portfolio seeks to track the performance of

a benchmark index that measures the investment return of non-U.S. dollar-denominated investment-grade

bonds.

Investment Strategy. The Portfolio invests 100% of its assets in the Vanguard Total International Bond

ETF. The Vanguard Total International Bond ETF employs an indexing investment approach designed to

track the performance of the Bloomberg Barclays Global Aggregate ex-USD Float Adjusted RIC Capped

Index (USD Hedged). This index provides a broad-based measure of the global, investment-grade, fixed-

rate debt markets.

Investment Risks. The Portfolio is subject to the same investment risks as the Vanguard Total

International Bond ETF.

Vanguard Total World Stock Portfolio

Investment Objective. The Vanguard Total World Stock Portfolio seeks to track the performance of a

benchmark index that measures the investment return of stocks of companies located in developed and

emerging markets around the world.

Investment Strategy. The Portfolio invests 100% of its assets in the Vanguard Total World Stock ETF.

The Vanguard Total World Stock ETF employs an indexing investment approach designed to track the

performance of the FTSE Global All Cap Index, a float-adjusted, market-capitalization-weighted index

designed to measure the market performance of large-, mid-, and small-capitalization stocks of companies

located around the world.

Investment Risks. The Portfolio is subject to the same investment risks as the Vanguard Total World

Stock ETF.

ADDITIONAL INVESTMENT INFORMATION

Systematic Rebalance Option. The Systematic Rebalance Option is designed to offer Account

Owners the ability to design a customized portfolio from the Investment Portfolios that will remain

consistent with their predetermined investment objectives over time. The participant’s chosen asset

allocation among the selected Investment Portfolios will periodically be rebalanced on a quarterly

basis in accordance with the participant’s target allocations on file.

In order to participate, the Account Owner must adhere to the following requirements:

• Select two or more Portfolios from the Investment Portfolios.

o You may choose to combine the Scholar’s Edge Year of Enrollment Portfolios,

Scholar’s Edge Target Risk Portfolios, and Individual Portfolios

• Choose a target allocation to each one of your selected Portfolios, totaling 100%.

• Electing this option at the time of enrollment will not count as one of your two per calendar

year allowable investment changes.

o Adding, stopping, or restarting the Systematic Rebalance Option at any other time

will count as one of your two per calendar year allowable investment changes.

o Changes to the Portfolio selections within your Systematic Rebalance Option

Scholarsedge529.com

instructions will also count as one of your two per calendar year allowable

investment changes. These changes would include adjusting the percentages assigned

to the Portfolios.

o Once you have used your two investment changes in a calendar year, you will not be

entitled to make any further investment changes until the following calendar year,

other than if you change the Beneficiary to a Member of the Family of the current

Beneficiary.

• On a quarterly basis, the Portfolios within your Systematic Rebalance Option instructions will

automatically rebalance back to your most recent target allocations on file.

o You cannot opt out of the quarterly rebalancing process without it counting as one of your

two allowed annual investment changes.

o The automatic rebalance will occur on or about the tenth calendar day following the last

day of each quarter end.

o These automatic rebalances will be confirmed on your Account’s quarterly statement.

•

Future contributions will automatically be invested

in line with the most recent target

allocations that are on file for your Systematic Rebalance Option.

You may direct contributions into a Portfolio that is different from that which is on file.

However, your Account will automatically rebalance in line with your target allocations

at the time the next quarterly rebalancing is affected.

How Your Units Are Valued. The Unit Value of each Portfolio is normally calculated as of the

close of the NYSE each day. If securities held by an Underlying Investment in your Portfolio are

traded in other markets on days when the NYSE is closed, that Portfolio’s value may fluctuate on

days when you do not have access to it to purchase or redeem Units. If events that are expected to

materially affect the value of securities traded in other markets occur between the close of those

markets and the close of business on the NYSE, those securities may be valued at their fair value.

Investment Policy Statement. The Board has adopted an Investment Policy Statement, effective

November 2, 2022, which is available at nmetb.org. The Investment Policy Statement sets forth, in

part:

1. the Board’s judgments, expectations, objectives, and guidelines for the investment of all Plan

assets;

2. an investment structure for managing all Plan assets. This structure includes various asset

classes and investment management styles that span the risk/return spectrum;

3. the criteria and procedures for selecting Investment Portfolios and Investment Managers;

4. guidelines for each Portfolio that controls the level of overall risk and liquidity assumed in

that Portfolio so that all Plan assets are managed in accordance with stated objectives;

5. communications between the Board, the investment consultant to the Board, the Program

Manager, and the Investment Managers;

6. criteria to monitor, evaluate, and compare the performance results achieved by the

Investment Managers on a regular basis; and

7. fiduciary, legal, prudence, and due diligence requirements.

Scholarsedge529.com

The Board, with the recommendation of PGI and the Program Manager, and the advice of the

consultant to the Board, has developed Investment Portfolios and selected the Underlying

Investments for each Portfolio based on the guidelines set forth in the Investment Policy Statement.

Benchmarks. Pursuant to the Investment Policy Statement described above, the Board has

established criteria to monitor, evaluate, and compare the Underlying Investments. The benchmarks

for the Underlying Funds are disclosed in the Underlying Fund prospectuses.

Treatment of Dividends and Capital Gains. The Underlying Investments distribute dividends and

capital gains because they are required to do so under the current provisions of the Code to maintain

their tax status as regulated investment companies. Each Portfolio, which is an offering through the

Trust, is not considered a mutual fund. Therefore, the Portfolios are not required to comply with

these requirements. Any reinvested dividends and capital gains from the Underlying Investments

will become assets of the Portfolios. Although the Underlying Investments may distribute dividends

and or capital gains, the Portfolios, rather than distributing earnings, reflect changes in value from

income and gains and losses from the Underlying Investments solely by increasing or decreasing the

Portfolio’s Unit Value.

Differences between Performance of the Portfolios and Underlying Investments. The performance

of the Portfolios will differ from the performance of the Underlying Investments. Because the

Portfolios have higher expense ratios than the Underlying Investments, over comparable periods of

time, all other things being equal, a Portfolio would have lower performance than its comparable

Underlying Investment. However, the Underlying Investments do not offer the same tax advantages

as the Portfolios. Performance differences also are caused by differences in the trade dates of

Portfolio purchases. When you invest money in a Portfolio, you will receive Portfolio Units as of

the trade date. The Portfolio will use your money to purchase shares or interests in an Underlying

Investment. However, the trade date for the Portfolio’s purchase of Underlying Investment shares or

interests typically will be one (1) business day after the trade date for your purchase of Portfolio

Units. Depending on the amount of cash flow into or out of the Portfolio and whether the

Underlying Investment is going up or down in value, this timing difference will also cause the

Portfolio’s performance to differ from the Underlying Investment’s performance. For more

information on investment performance, see Investment Performance beginning on page 73.

Investment Selection. For each new contribution, you can select from any of the Portfolios when

you make your contribution as long as investments in those different Portfolios are permissible. The

minimum allocation per selected Investment Portfolio is 1% of the contribution amount.

Changing Portfolios. Once your Portfolio is selected for a particular contribution, IRS guidance

provides that you can move money or transfer from one Portfolio to another twice per calendar year

for the same Beneficiary. This limitation applies in the aggregate across all of your accounts for the

same Beneficiary under all Qualified Tuition Programs sponsored by the State of New Mexico. You

may exchange Units in a Portfolio only for Units of the same Unit Class in another Portfolio.

Requesting Additional Information about the Underlying Funds. Additional information about the

investment strategies and risks of each Underlying Fund is available in its current prospectus and

Statement of Additional Information (SAI). You can request a copy of the current prospectus, the

SAI, or the most recent semiannual or annual report, as applicable, of any Underlying Fund by

visiting the following Investment Managers’ websites or calling the numbers referenced below.

Scholarsedge529.com

INVESTMENT

MANAGER

WEBSITE

PHONE

NUMBER

Principal principalam.com 800-787-1621

BlackRock*

ishares.com 800-474-2737

Vanguard

vanguard.com 800-528-4999

JPMorgan

am.jpmorgan.com 800-480-4111

New York Life**

nylinvestments.com 800-624-6782

* Investment Manager of the iShares Underlying Funds.

** Investment Manager of the MainStay MacKay High Yield Corporate Bond Portfolio.

Scholarsedge529.com

The tables below show the average annual total return of an Investment Portfolio (after deducting

fees and expenses).

Portfolio performance information represents past performance, which is not a guarantee of future

results. Investment returns and principal value will fluctuate, so your Units, when sold, may be

worth more or less than their original cost. Current performance may be lower or higher than the

performance data cited. Performance may be substantially affected over time by changes in the

allocations and/or changes in the investments in which each Investment Portfolio invests.

For Portfolio performance data current to the most recent month-end, visit scholarsedge529.com or

call us at 1.866.529.7283.

CLASS A UNITS

Name

Average annual total returns as of

12/31/2023

Inception

date

1 Year

3 Year

Since

Inception

Scholar’s Edge 2042-2043 Portfolio A

08/25/2023

Without Sales Load

9.00%

With Sales Load

5.21%

Scholar’s Edge 2040-2041 Portfolio A

08/27/2021

Without Sales Load

20.39%

-0.34%

With Sales Load

16.16%

-1.83%

Scholar’s Edge 2038-2039 Portfolio A

12/06/2019

Without Sales Load

19.91%

4.95%

8.34%

With Sales Load

15.71%

3.73%

7.40%

Scholar’s Edge 2036-2037 Portfolio A

12/06/2019

Without Sales Load

18.87%

4.58%

7.99%

With Sales Load

14.68%

3.36%

7.05%

Scholar's Edge 2034-2035 Portfolio A

12/06/2019

Without Sales Load

18.15%

4.15%

7.48%

With Sales Load

14.03%

2.92%

6.55%

Scholar's Edge 2032-2033 Portfolio A

12/06/2019

Without Sales Load

17.11%

3.83%

6.94%

With Sales Load

12.98%

2.59%

6.02%

Scholar's Edge 2030-2031 Portfolio A

12/06/2019

Without Sales Load

15.04%

2.89%

6.05%

With Sales Load

11.01%

1.68%

5.13%

Scholar's Edge 2028-2029 Portfolio A

12/06/2019

Without Sales Load

13.00%

2.04%

5.14%

With Sales Load

9.07%

0.83%

4.23%

Scholar's Edge 2026-2027 Portfolio A

12/06/2019

Without Sales Load

10.43%

1.25%

4.04%

With Sales Load

6.53%

0.06%

3.14%

Scholar's Edge 2024-2025 Portfolio A

12/06/2019

Without Sales Load

7.96%

0.18%

2.64%

With Sales Load

4.22%

-1.00%

1.76%

Scholar's Edge Today Portfolio A

12/06/2019

Without Sales Load

6.76%

-0.67%

0.66%

With Sales Load

3.01%

-1.84%

-0.21%

Scholar's Edge Aggressive Portfolio A

12/06/2019

Without Sales Load

18.47%

4.06%

7.34%

Investment Performance

Scholarsedge529.com

With Sales Load

14.31%

2.83%

6.41%

Scholar's Edge Moderate Portfolio A

12/06/2019

Without Sales Load

14.54%

2.14%

5.03%

With Sales Load

10.50%

0.92%

4.12%

Scholar's Edge Conservative Portfolio A

12/06/2019

Without Sales Load

9.81%

0.36%

2.55%

With Sales Load

5.93%

-0.83%

1.67%

Scholar's Edge Fixed Income Portfolio A

12/06/2019

Without Sales Load

5.21%

-1.22%

0.24%

With Sales Load

1.51%

-2.39%

-0.62%

iShares S&P 500 Stock Index Portfolio A

12/06/2019

Without Sales Load

25.16%

9.27%

11.76%

With Sales Load

20.74%

7.97%

10.80%

Principal Blue Chip Portfolio A

12/06/2019

Without Sales Load

39.26%

6.15%

13.15%

With Sales Load

34.39%

4.90%

12.17%

Principal Equity Income Portfolio A

12/06/2019

Without Sales Load

10.55%

6.18%

6.64%

With Sales Load

6.65%

4.94%

5.72%

Vanguard Mid Cap Index Portfolio A

12/06/2019

Without Sales Load

15.42%

4.96%

8.47%

With Sales Load

11.36%

3.71%

7.53%

iShares Small Cap Index Portfolio A

12/06/2019

Without Sales Load

15.32%

6.49%

7.76%

With Sales Load

11.25%

5.23%

6.82%

Principal Diversiﬁed International Portfolio A

12/06/2019

Without Sales Load

17.21%

0.70%

3.67%

With Sales Load

13.09%

-0.48%

2.77%

JPMorgan Emerging Markets Equity Portfolio A

12/06/2019

Without Sales Load

6.91%

-10.93%

-0.25%

With Sales Load

3.13%

-11.99%

-1.11%

Vanguard Total World Stock Portfolio A

12/06/2019

Without Sales Load

20.86%

5.12%

8.22%

With Sales Load

16.67%

3.89%

7.28%

Principal Real Estate Securities Portfolio A

12/06/2019

Without Sales Load

12.79%

5.31%

2.83%

With Sales Load

8.84%

4.06%

1.94%

Principal Core Fixed Income Portfolio A

12/06/2019

Without Sales Load

5.23%

-3.68%

-0.87%

With Sales Load

1.58%

-4.82%

-1.73%

iShares Core U.S. Aggregate Bond Portfolio A

12/06/2019

Without Sales Load

5.25%

-3.71%

-1.46%

With Sales Load

1.62%

-4.84%

-2.31%

Principal Short-Term Income Portfolio A

12/06/2019

Without Sales Load

5.52%

-0.10%

0.80%

With Sales Load

1.77%

-1.29%

-0.07%

Vanguard Total International Bond Portfolio A

12/06/2019

Without Sales Load

8.18%

-2.87%

-1.20%

With Sales Load

4.39%

-4.03%

-2.06%

MainStay MacKay High Yield Corporate Bond Portfolio A

12/06/2019

Without Sales Load

11.39%

2.27%

3.14%

With Sales Load

7.49%

1.08%

2.25%

Scholar's Edge Capital Preservation Portfolio A

12/06/2019

Without Sales Load

4.68%

2.10%

1.75%

With Sales Load

4.68%

0.89%

0.87%

Scholarsedge529.com

CLASS C UNITS

Name

Average annual total returns as of

12/31/2023

Inception

date

1 Year

3 Year

Since

Inception

Scholar’s Edge 2042-2043 Portfolio C

08/25/2023

Without CDSC

8.90%

With CDSC

7.90%

Scholar’s Edge 2040-2041 Portfolio C

08/27/2021

Without CDSC

19.66%

—

-1.12%

With CDSC

18.66%

—

-1.12%

Scholar’s Edge 2038-2039 Portfolio C

12/06/2019

Without CDSC

19.04%

4.20%

7.54%

With CDSC

18.04%

4.20%

7.54%

Scholar’s Edge 2036-2037 Portfolio C

12/06/2019

Without CDSC

17.99%

3.79%

7.16%

With CDSC

16.99%

3.79%

7.16%

Scholar's Edge 2034-2035 Portfolio C

12/06/2019

Without CDSC

17.30%

3.42%

6.70%

With CDSC

16.30%

3.42%

6.70%

Scholar's Edge 2032-2033 Portfolio C

12/06/2019

Without CDSC

16.23%

3.08%

6.16%

With CDSC

15.23%

3.08%

6.16%

Scholar's Edge 2030-2031 Portfolio C

12/06/2019

Without CDSC

14.26%

2.20%

5.31%

With CDSC

13.26%

2.20%

5.31%

Scholar's Edge 2028-2029 Portfolio C

12/06/2019

Without CDSC

12.23%

1.38%

4.43%

With CDSC

11.23%

1.38%

4.43%

Scholar's Edge 2026-2027 Portfolio C

12/06/2019

Without CDSC

9.69%

0.59%

3.34%

With CDSC

8.69%

0.59%

3.34%

Scholar's Edge 2024-2025 Portfolio C

12/06/2019

Without CDSC

7.14%

-0.55%

1.91%

With CDSC

6.14%

-0.55%

1.91%

Scholar's Edge Today Portfolio C

12/06/2019

Without CDSC

6.06%

-1.40%

-0.07%

With CDSC

5.06%

-1.40%

-0.07%

Scholar's Edge Aggressive Portfolio C

12/06/2019

Without CDSC

17.62%

3.29%

6.56%

With CDSC

16.62%

3.29%

6.56%

Scholar's Edge Moderate Portfolio C

12/06/2019

Without CDSC

13.79%

1.44%

4.33%

With CDSC

12.79%

1.44%

4.33%

Scholar's Edge Conservative Portfolio C

12/06/2019

Without CDSC

9.02%

-0.34%

1.82%

With CDSC

8.02%

-0.34%

1.82%

Scholar's Edge Fixed Income Portfolio C

12/06/2019

Without CDSC

4.37%

-1.96%

-0.52%

With CDSC

3.37%

-1.96%

-0.52%

iShares S&P 500 Stock Index Portfolio C

12/06/2019

Without CDSC

24.37%

8.49%

10.95%

With CDSC

23.37%

8.49%

10.95%

Principal Blue Chip Portfolio C

12/06/2019

Without CDSC

38.28%

5.37%

12.32%

With CDSC

37.28%

5.37%

12.32%

Principal Equity Income Portfolio C

12/06/2019

Without CDSC

9.66%

5.40%

5.85%

With CDSC

8.66%

5.40%

5.85%

Scholarsedge529.com

Vanguard Mid Cap Index Portfolio C

12/06/2019

Without CDSC

14.50%

4.15%

7.66%

With CDSC

13.50%

4.15%

7.66%

iShares Small Cap Index Portfolio C

12/06/2019

Without CDSC

14.55%

5.72%

6.96%

With CDSC

13.55%

5.72%

6.96%

Principal Diversiﬁed International Portfolio C

12/06/2019

Without CDSC

16.37%

-0.06%

2.89%

With CDSC

15.37%

-0.06%

2.89%

JPMorgan Emerging Markets Equity Portfolio C

12/06/2019

Without CDSC

6.30%

-11.55%

-0.95%

With CDSC

5.30%

-11.55%

-0.95%

Vanguard Total World Stock Portfolio C

12/06/2019

Without CDSC

20.00%

4.34%

7.42%

With CDSC

19.00%

4.34%

7.42%

Principal Real Estate Securities Portfolio C

12/06/2019

Without CDSC

11.96%

4.52%

2.05%

With CDSC

10.96%

4.52%

2.05%

Principal Core Fixed Income Portfolio C

12/06/2019

Without CDSC

4.46%

-4.39%

-1.61%

With CDSC

3.46%

-4.39%

-1.61%

iShares Core U.S. Aggregate Bond Portfolio C

12/06/2019

Without CDSC

4.46%

-4.43%

-2.19%

With CDSC

3.46%

-4.43%

-2.19%

Principal Short-Term Income Portfolio C

12/06/2019

Without CDSC

4.60%

-0.88%

0.02%

With CDSC

3.60%

-0.88%

0.02%

Vanguard Total International Bond Portfolio C

12/06/2019

Without CDSC

7.33%

-3.59%

-1.95%

With CDSC

6.33%

-3.59%

-1.95%

MainStay MacKay High Yield Corporate Bond Portfolio C

12/06/2019

Without CDSC

10.55%

1.53%

2.37%

With CDSC

9.55%

1.53%

2.37%

Scholar's Edge Capital Preservation Portfolio C

12/06/2019

Without CDSC

4.34%

1.83%

1.37%

With CDSC

3.34%

1.83%

1.37%

Scholarsedge529.com

CLASS R UNITS

Name

Average annual total returns as of

12/31/2023

Inception

date

1 Year

3 Year

Since

Inception

Scholar’s Edge 2042-2043 Portfolio R

08/25/2023

Without Sales Load

9.20%

Scholar’s Edge 2040-2041 Portfolio R

08/27/2021

Without Sales Load

20.77%

—

0.00%

Scholar’s Edge 2038-2039 Portfolio R

12/06/2019

Without Sales Load

20.26%

5.24%

8.64%

Scholar’s Edge 2036-2037 Portfolio R

12/06/2019

Without Sales Load

19.05%

4.79%

8.26%

Scholar's Edge 2034-2035 Portfolio R

12/06/2019

Without Sales Load

18.44%

4.42%

7.76%

Scholar's Edge 2032-2033 Portfolio R

12/06/2019

Without Sales Load

17.42%

4.08%

7.22%

Scholar's Edge 2030-2031 Portfolio R

12/06/2019

Without Sales Load

15.35%

3.17%

6.36%

Scholar's Edge 2028-2029 Portfolio R

12/06/2019

Without Sales Load

13.18%

2.27%

5.54%

Scholar's Edge 2026-2027 Portfolio R

12/06/2019

Without Sales Load

10.73%

1.53%

4.31%

Scholar's Edge 2024-2025 Portfolio R

12/06/2019

Without Sales Load

8.27%

0.48%

2.96%

Scholar's Edge Today Portfolio R

12/06/2019

Without Sales Load

7.11%

-0.38%

0.97%

Scholar's Edge Aggressive Portfolio R

12/06/2019

Without Sales Load

18.75%

4.33%

7.64%

Scholar's Edge Moderate Portfolio R

12/06/2019

Without Sales Load

14.78%

2.41%

5.33%

Scholar's Edge Conservative Portfolio R

12/06/2019

Without Sales Load

10.13%

0.60%

2.83%

Scholar's Edge Fixed Income Portfolio R

12/06/2019

Without Sales Load

5.47%

-0.96%

0.54%

iShares S&P 500 Stock Index Portfolio R

12/06/2019

Without Sales Load

25.51%

9.54%

12.06%

Principal Blue Chip Portfolio R

12/06/2019

Without Sales Load

39.52%

6.41%

13.44%

Principal Equity Income Portfolio R

12/06/2019

Without Sales Load

10.79%

6.43%

6.94%

Vanguard Mid Cap Index Portfolio R

12/06/2019

Without Sales Load

15.63%

5.19%

8.74%

iShares Small Cap Index Portfolio R

12/06/2019

Without Sales Load

15.63%

6.76%

8.03%

Principal Diversiﬁed International Portfolio R

12/06/2019

Without Sales Load

17.49%

0.93%

3.91%

JPMorgan Emerging Markets Equity Portfolio R

12/06/2019

Without Sales Load

7.17%

-10.71%

0.02%

Vanguard Total World Stock Portfolio R

12/06/2019

Without Sales Load

21.20%

5.38%

8.53%

Principal Real Estate Securities Portfolio R

12/06/2019

Without Sales Load

13.09%

5.54%

3.10%

Principal Core Fixed Income Portfolio R

12/06/2019

Without Sales Load

5.51%

-3.44%

-0.60%

iShares Core U.S. Aggregate Bond Portfolio R

12/06/2019

Without Sales Load

5.31%

-3.52%

-1.20%

Principal Short-Term Income Portfolio R

12/06/2019

Without Sales Load

5.75%

0.26%

1.16%

Scholarsedge529.com

Vanguard Total International Bond Portfolio R

12/06/2019

Without Sales Load

8.63%

-2.45%

-0.77%

MainStay MacKay High Yield Corporate Bond Portfolio R

12/06/2019

Without Sales Load

11.60%

2.54%

3.39%

Scholar's Edge Capital Preservation Portfolio R

12/06/2019

Without Sales Load

4.83%

2.38%

2.03%

Scholarsedge529.com

U.S. FEDERAL TAX ISSUES

General. This section describes some of the federal tax considerations you should be aware of when

investing in Scholar’s Edge. However, the discussion is by no means exhaustive and is not meant as

tax advice. The U.S. federal tax consequences associated with an investment in Scholar’s Edge can

be complex. Scholar’s Edge should not be used for the purposes of avoiding U.S. federal tax or tax

penalties. Before you invest you may wish to consult an independent tax advisor regarding the

application of tax laws to your particular circumstances.

Some states may impose taxes and/or penalties on investments in or withdrawals from a Qualified

Tuition Program offered by other states. These penalties and taxes may, in certain cases, have the

effect of offsetting some or all of the U.S. federal tax benefits discussed below.

Risk of Tax Law Changes. The IRS has issued only proposed regulations and certain other guidance

under Section 529. Final regulations, if issued, may differ from the proposed regulations, may apply

retroactively, and therefore could affect the U.S. federal tax considerations of investing in Scholar’s

Edge or require changes in the terms of Scholar’s Edge. In addition, other administrative guidance

or court decisions may be issued that could affect the U.S. federal tax treatment described herein.

U.S. Federal Tax-Deferred or Tax-Free Earnings. Any earnings on contributions are tax-deferred,

which means your Account assets grow free of current U.S. federal income tax and are tax-free,

meaning such earnings are not subject to U.S. federal income tax, if withdrawn to pay for Qualified

Expenses, as described below.

U.S. Federal Gift/Estate Tax. If your contributions, together with any other gifts to the Beneficiary

(over and above those made to your Account), do not exceed the U.S. Federal exemption, no gift

tax will be imposed for that year. Gifts of up to $90,000 by an individual can be made during 2024

($180,000 for married couples making a proper election on their U.S. federal income tax return) to a

Beneficiary and you may elect to apply the contribution against the annual exclusion equally over a

five-year period. This allows you to move assets into tax-deferred investments and out of your

estate more quickly. If you die with assets still remaining in your Account, the Account’s value will

generally not be included in your estate for U.S. federal estate tax purposes, unless you elect the

five-year averaging and die before the end of the fifth year, in which case the contributions allocable

to the remaining years in the 5-year period would be includible in your estate. If your Beneficiary

dies, and assets remain in your Account, the value of your Account may be included in the

Beneficiary’s estate for U.S. federal tax purposes. Further rules regarding gifts and the generation-

skipping transfer tax may apply in the case of distributions, changes of Beneficiaries, and other

situations. The state law treatment of gift and estate taxes varies so you should check with your tax

advisor for the specific effect of U.S. federal and state (if any) gift tax and generation-skipping

transfer tax on your situation.

Transfers and Rollovers. Where a distribution is placed in another Account or another Qualified

Tuition Program account within sixty (60) days of the distribution date, you may avoid incurring

U.S. Federal Taxes: The U.S. federal taxation of your Scholar’s Edge Account can be complex.

Make sure you understand the U.S. federal tax benefits and obligations before you invest.

Important Tax Information

Scholarsedge529.com

U.S. federal income tax or a Distribution Tax if the transfer is for the same Beneficiary or for a

Member of the Family of the Beneficiary. You can transfer assets for the same Beneficiary from

another Qualified Tuition Program to your Account without adverse tax consequences only if no

other such rollovers have occurred within the prior twelve (12) months. Changes in your

Beneficiary could potentially cause gift and/or generation-skipping transfer tax consequences to you

and your Beneficiary. Because gift and generation-skipping transfer tax issues are complex, you

should consult with your tax advisor.

ABLE Rollover Distributions.

Where a distribution is placed in a Qualified ABLE Program account within 60 days of the

distribution date, you may avoid incurring U.S. federal income tax or a Distribution Tax if the

transfer is for the same Beneficiary or for a Member of the Family of the Beneficiary. Any

distribution must be made before January 1, 2026, and cannot exceed the annual Qualified ABLE

Program contribution limit (currently $18,000).

Changes in your Beneficiary could potentially cause gift and/or generation-skipping transfer tax

consequences to you and your Beneficiary. Because gift and generation-skipping transfer tax issues

are complex, you should consult with your tax advisor.

Rollovers to Roth IRAs. Starting on January 1, 2024, certain limited transfers from an Account

directly to a Roth IRA (as described in Section 408A of the Code) maintained for the benefit of the

Beneficiary of the Account will also be treated as a rollover distribution for U.S. federal tax

purposes. In order for a rollover from an Account to a Roth IRA to be treated as a rollover

distribution, the Account must have been maintained for a period of no less than 15 years, ending on

the date of the rollover transfer. Additionally, the rollover must be paid directly from the Plan to the

Roth IRA and is limited to the amount of the aggregate contributions (and earnings on such

contributions) made to the Account prior to the five-year period ending on the date of the rollover.

The aggregate amount of this type of rollover distribution may not exceed the lifetime limit of

$35,000 per beneficiary, and is subject to the annual limit on the rollover is the IRA contribution

limit for the year, less any other IRA contributions. The provisions of the Code permitting such

rollovers were recently enacted, and additional requirements may be imposed under regulations

promulgated by the IRS. You are responsible for determining the eligibility of a rollover to Roth

IRA including tracking and documenting the length of time your Account has been opened and the

amount of assets in your Account eligible to be rolled into a Roth IRA. Account Owners and

Beneficiaries should each consult with a qualified tax advisor regarding how these rules apply to

their circumstances.

Direct Transfers Between Plans for the Same Beneficiary. Under Section 529, you can transfer

assets directly between any 529 plan sponsored by the State of New Mexico twice per calendar year

for the same Beneficiary. Such a direct transfer is considered an investment exchange for U.S.

federal and state tax purposes and is therefore subject to the restrictions described in Maintaining

Your Account – Changing Investment Portfolios on page 32.

Indirect Transfers. For U.S. federal and state tax purposes, an indirect transfer involving the

distribution of money from The Education Plan to Scholar’s Edge, or vice versa, would be treated

as a Non-Qualified Distribution (and not as an investment exchange), even though it is subsequently

contributed to the new account for the same Beneficiary.

Coverdell Education Savings Accounts (ESA). Generally, contributions may be made to both an

ESA (defined in Section 530 of the Code) and a Qualified Tuition Program in the same year on

behalf of the same Beneficiary. However, the same educational expenses cannot be claimed for a

Scholarsedge529.com

tax-exempt distribution from both the ESA and the Qualified Tuition Program.

Education Tax Credits. You and your Beneficiary, if eligible, can take advantage of American

Opportunity and Lifetime Learning Tax Credits without affecting your participation in Scholar’s

Edge or its benefits. American Opportunity and Lifetime Learning Credits can be claimed in the

same year that a tax-exempt distribution is taken from a Qualified Tuition Program provided the

distribution is not used for the same educational expenses.

All Distributions. Distributions may be comprised of: (1) principal, which is not taxable when

distributed, and (2) earnings, if any, which may be subject to U.S. federal income tax. We determine

the earnings portion based on IRS rules and report to the IRS and the recipient. However, we do not

report whether the distribution is a Qualified Distribution or a Non-Qualified Distribution. You are

responsible for preparing and filing the appropriate forms when completing your U.S. federal

income tax return and for paying any applicable tax directly to the IRS.

Qualified Expense Distributions. If you take a distribution from your Account to pay for Qualified

Expenses, your Beneficiary generally does not have to include as income any earnings distributed

for the applicable taxable year if the total distributions for that year are less than or equal to the total

distributions for Qualified Expenses for that year minus any tax-free Educational Assistance and

expenses considered in determining any American Opportunity or Lifetime Learning Credits

claimed for that taxable year.

You, or your Beneficiary, as applicable, are responsible for determining the amount of the earnings

portion of any distribution from your Account that may be taxable and are responsible for reporting

any earnings that must be included in taxable income. You should consult with your tax advisor for

further information.

Other Distributions. For U.S. federal income tax purposes, you or the Beneficiary may be subject to

U.S. federal and state income tax on the earnings portion of a distribution in the event of the death

or Disability of a Beneficiary, the receipt by the Beneficiary of a scholarship, grant, or other tax-free

Educational Assistance, attendance at certain specified military academies, use of American

Opportunity or Lifetime Learning Credits, or a Refunded Distribution. The distributions discussed

in this paragraph generally are not subject to the Distribution Tax.

Non-Qualified Distributions. You, or the Beneficiary, as applicable, are subject to U.S. federal and

state income tax and the Distribution Tax on the earnings portion of any distribution that is not

exempt from tax as described above. You will also be subject to a recapture of the New Mexico state

income tax deduction with respect to any Non- Qualified Distribution and certain other withdrawals

as discussed in State Tax Issues - Recapture of Income Tax Deduction on page 82.

Determination of Taxable Earnings. The earnings portion of a distribution will generally be

calculated on an Account-by-Account basis. An Account Owner may only open one Account for the

same Beneficiary. If you do not select a specific Investment Option(s) from which to take a

distribution, the distribution will be taken proportionally from all the Investment Options in the

Account. If you request that a distribution be taken from one or more specific Investment Option(s),

the earnings, for tax reporting purposes, will be calculated based on the earnings of all the

Investment Options in your Account.

Scholarsedge529.com

STATE TAX ISSUES

General. This section describes some of the state tax considerations you should be aware of when

investing in Scholar’s Edge. However, the discussion is by no means exhaustive and is not meant as

tax advice. The New Mexico state tax consequences associated with an investment in Scholar’s

Edge can be complex.

Scholar’s Edge should not be used for the purposes of avoiding state tax or tax penalties. Before you

invest, you may wish to consult an independent tax advisor regarding the application of tax laws to

your particular circumstances.

Income Tax Deduction for New Mexico Taxpayers. If you are an individual New Mexico taxpayer

(resident or non-resident), filing a single or joint return, you may deduct contributions to The

Education Plan and Scholar’s Edge for New Mexico individual income tax purposes. In certain

circumstances, the amounts deducted may be recaptured in subsequent years as discussed below.

The contributor does not need to be the Account Owner of an Account to be eligible for the

deduction.

Recapture of Income Tax Deduction. In certain circumstances, the amounts deducted may be

recaptured in subsequent years. For example, ABLE Rollover Distribution amounts previously

deducted for New Mexico income tax purposes may be recaptured if they are made after January 1,

2026, and/or exceed the annual contribution limit. Account Owners are advised to seek tax advice

from an independent tax advisor before using an account to pay for these and other expenses.

New Mexico Tax-Free Distributions for Qualified Expenses. Because New Mexico adjusted gross

income is generally derived from U.S. federal adjusted gross income, you or the Beneficiary, if a

New Mexico taxpayer, will be subject to New Mexico adjusted gross income tax in the same

manner as U.S. federal income tax. As a result, you or the Beneficiary are generally not subject to

New Mexico adjusted gross income tax on the earnings portion of any distributions for Qualified

Expenses. Since different states have different tax provisions, if you or your Beneficiary, as

applicable, are not a New Mexico taxpayer, you should consult your own state’s tax laws or your

tax advisor for more information on your state’s taxation of distributions for Qualified Expenses.

New Mexico Taxation of Non-Qualified and Other Distributions. Because New Mexico adjusted

gross income is generally derived from U.S. federal adjusted gross income, you or the Beneficiary,

as applicable, will be subject to New Mexico adjusted gross income tax on the earnings portion of

any Non-Qualified Distribution, or other distributions that are also included in your U.S. federal

adjusted gross income for a taxable year.

Refunded Distributions. Where a distribution is made to pay Qualified Expenses and the distribution

or a portion of the distribution is refunded by the Eligible Educational Institution, you may avoid

incurring New Mexico income tax or the recapture of the New Mexico state income tax deduction

claimed by contributors in prior taxable years if:

• You recontribute the refund to a Qualified Tuition Program account for which the Beneficiary

is the same Beneficiary as the Beneficiary who received the refund; and

• The recontribution is made within 60 days of the date of the refund from the Eligible

Educational Institution.

Scholarsedge529.com

Non-New Mexico Taxpayers. If you or your Beneficiary are not a New Mexico taxpayer, consider

before investing whether your or the Beneficiary’s home state offers a Qualified Tuition Program

that provides its taxpayers with favorable state tax and other benefits such as financial aid,

scholarship funds, and protection from creditors, that may only be available through investment in

the home state’s Qualified Tuition Program, and which are not available through an investment in

Scholar’s Edge. You may wish to contact your home state’s Qualified Tuition Program(s), or any

other Qualified Tuition Program, to learn more about those plans’ features, benefits, and limitations.

State-based benefits should be one of many factors to be considered when making an investment

decision. Since different states have different tax provisions, this Plan Description and Participation

Agreement contains limited information about the state tax consequences of investing in Scholar’s

Edge. If you or your Beneficiary, as applicable, are not a New Mexico taxpayer, you should consult

your tax advisor for information on your own state’s tax laws, including the taxation of distributions

for Qualified Expenses, and to learn how state-based benefits (or any limitations) would apply to

your specific circumstances.

Scholarsedge529.com

General Information

Identification Verification. Certain information is necessary to properly verify your identity. If we

do not receive all of the required information, there could be a delay in opening your Account. If,

after making reasonable efforts, we are unable to verify your identity, we may take any action

permitted by law, without prior notice to you, including rejecting contribution and transfer requests,

suspending Account services, or closing your Account and issuing a refund at the Unit Value

calculated the day your Account is closed. Any refund made under these circumstances may be

considered a Non-Qualified Distribution. The risk of market loss, tax implications, and any other

expenses, as a result of the liquidation, will be solely your responsibility.

Documents in Good Order. To process any transaction in the Plan, all necessary documents must be

in good order, which means executed when required and properly, fully, and accurately completed.

Purpose of Qualified Tuition Programs. Qualified Tuition Programs are intended to be used only to

save for Qualified Expenses. Qualified Tuition Programs are not intended to be used, nor should

they be used, by any taxpayer for the purpose of evading U.S. federal or state taxes or tax penalties.

You may wish to seek tax advice from an independent tax advisor based on your own particular

circumstances.

Your Account. When you complete your enrollment, you acknowledge that you agree to be bound

by the terms and conditions of this Plan Description and Participation Agreement and the

Enrollment Form. The Plan Description and Participation Agreement and your completion of the

Enrollment Form, when executed by you, is considered the entire agreement between you and the

Trust with respect to your Account. By signing the Enrollment Form, as applicable, you are

requesting that we open an Account for the benefit of your Beneficiary. Your Account, the Plan

Description and Participation Agreement and your signed Enrollment Form are subject to the

Enabling Legislation and any rules we may adopt under the Enabling Legislation. Your Account

assets will be held, subject to the Enabling Legislation and the Code, the Plan Description and

Participation Agreement, and your signed Enrollment Form, for the exclusive benefit of you and

your Beneficiary.

Changes to Your Account. The Plan Officials are not responsible for the accuracy of the

documentation you submit to us to make changes to your Account, whether submitted online or in

paper form. If received in good order, notices, changes, options, and elections relating to your

Account will take effect within a reasonable amount of time after we have received the appropriate

documentation in good order, unless the Board agrees otherwise.

Accuracy of Information in Plan Description and Participation Agreement. The information in this

Plan Description and Participation Agreement is believed to be accurate as of the cover date, but it

is subject to change without notice. No one is authorized to provide information that is different

from the information in the most current form of this Plan Description and Participation Agreement,

as supplemented from time to time.

Changes to the Plan Description and Participation Agreement. The Board may amend the terms of

the Plan Description and Participation Agreement from time to time to comply with changes in the

law or regulations or if the Board determines it is in the Plan’s best interest to do so. However, the

Board will not retroactively modify existing terms and conditions applicable to an Account in a

Scholarsedge529.com

manner adverse to you or your Beneficiary, except to the extent necessary to assure compliance

with applicable state and U.S. federal laws or regulations or to preserve the favorable tax treatment

to you, your Beneficiary, the Board, Scholar’s Edge, or the Trust.

Keep Legal Documents for Your Records. You should retain this Plan Description and Participation

Agreement for your records. We may make modifications to Scholar’s Edge in the future. If so, an

addendum (Supplement) to the Plan Description and Participation Agreement may be sent to your

address of record or notice sent to you by email if you choose to receive documents electronically.

In these cases, the new Supplement and/ or Plan Description and Participation Agreement will

supersede all prior versions.

Please note that we periodically match and update the addresses of record against a change of

address database maintained by the U.S. Postal Service to reduce the possibility that items sent by

First Class Mail, such as Account statements, will be undeliverable.

Changes to State Statutes; Adoption of Rules. The New Mexico Legislature may, from time to time,

pass legislation, which may directly or indirectly affect the terms and conditions of Scholar’s Edge

and the Plan Description and Participation Agreement. Also, the Board may adopt rules pursuant to

the provisions of the Enabling Legislation, which may directly or indirectly affect the terms and

conditions of Scholar’s Edge and the Plan Description and Participation Agreement.

Guide to Interpretation. The Plan is intended to qualify for the tax benefits of Section 529.

Notwithstanding anything in the Plan Description and Participation Agreement to the contrary, the

terms and conditions applicable to your Account will be interpreted and/or amended to comply with

the requirements of Section 529 and applicable regulations.

Continuing Disclosure. Certain financial information and operating data relating to the Trust will be

filed by or on behalf of the Trust in electronic form with the Electronic Municipal Market Access

system (EMMA) maintained by the Municipal Securities Rulemaking Board (MSRB) pursuant to

Rule 15c2-12 as promulgated by the SEC under the Securities Exchange Act of 1934. Notices of

certain enumerated events will be filed by or on behalf of the Trust with the MSRB.

Independent Registered Public Accounting Firm. The State requires an independent registered

public accounting firm to audit the Plan’s financial statements annually. The independent registered

public accounting firm is selected by the Board.

Custodial Arrangements. The Bank of New York Mellon (Mellon) is the Plan’s custodian. As

custodian, Mellon is responsible for holding the Plan’s assets, including Underlying Fund shares

owned by the Trust and monies contributed to Accounts by Account Owners.

Creditor Protection under U.S. Laws. U.S. Federal bankruptcy law excludes from property of the

debtor’s bankruptcy estate certain assets that have been contributed to an account in a Qualified

Tuition Program. However, bankruptcy protection in this respect is limited and has certain

conditions. Additional provisions of New Mexico state law, including NMSA 21-21K-6.A, may

also apply. For the Qualified Tuition Program account to be excluded from the debtor’s estate, the

Beneficiary must be a child, stepchild, grandchild, or step-grandchild (including a legally adopted

child or a foster child) of the individual who files for bankruptcy protection. In addition,

contributions made to all Qualified Tuition Program accounts for the same Beneficiary are protected

from becoming property of the debtor’s estate as follows:

Scholarsedge529.com

• contributions made to all Qualified Tuition Program accounts for the same beneficiary more

than seven hundred twenty (720) days before a U.S. federal bankruptcy filing are completely

protected;

• contributions made to all Qualified Tuition Program accounts for the same beneficiary more

than three hundred and sixty-five (365) days but less than seven hundred and twenty (720)

days before a U.S. federal bankruptcy filing are protected up to seven thousand five hundred

seventy five dollars ($7,575.00), an amount currently revised every three (3) years by the

Judicial Conference of the United States; and contributions made to all Qualified Tuition

Program accounts for the same beneficiary less than three hundred sixty-five (365) days before

a U.S. federal bankruptcy filing are not protected against creditor claims in U.S. federal

bankruptcy proceedings.

U.S. Federal bankruptcy law permits a debtor to exempt certain specified assets from liability even

though the assets are property of the debtor’s estate. Under U.S. federal bankruptcy law, assets held

in a 529 plan account that are property of the debtor’s estate are not exempt from debt for domestic

support obligations. This information is not meant to constitute individual tax or bankruptcy advice,

and you should consult with your own advisors concerning your individual circumstances.

Representation. All factual determinations regarding your or your Beneficiary’s residency, Disabled

status, and any other factual determinations regarding your Account will be made by the Board or

its designee based on the facts and circumstances of each case.

Accounts Not Insured; Returns not Guaranteed. Your Accounts are not insured by the State and

neither the principal deposited, nor the investment return is guaranteed by the State of New Mexico

or Plan Officials. Opening an Account does not guarantee that your Beneficiary will be admitted to

an Eligible Educational Institution or be allowed to continue enrollment at or graduate from an

Eligible Educational Institution after admission. Opening an Account does not establish New

Mexico residence for your Beneficiary. Neither the State of New Mexico nor Plan Officials

guarantee that amounts saved in your Account will be sufficient to cover the Qualified Expenses of a

Beneficiary. All obligations under your Account and the Plan Description and Participation

Agreement are legally binding contractual obligations of the Trust only.

Scholarsedge529.com

Scholar’s Edge Privacy Policy

As an Account Owner of the Plan, you are entitled to know how we protect your personal

information and how we limit its disclosure. You can access a copy of the most recent Scholar’s

Edge Privacy Policy on the Plan’s website at scholarsedge529.com.

Information Sources

We obtain non-public personal information about our Account Owners and Beneficiaries when you

provide it to us, or we obtain it with your authorization. This includes information that we receive

from applications or other forms you submit, when you access your Account online, and when there

are transactions associated with your Account.

Protection of Information

We do not disclose non-public personal information about current or former Account Owners and

Beneficiaries to anyone, except as permitted by law. Permitted disclosures include, for instance,

providing information to Scholar’s Edge employees and to related service providers who need to

know the information to assist Scholar’s Edge in providing services to you. In all such situations,

Scholar’s Edge stresses the confidential nature of the information being shared.

Other Security Measures

The security of your personal and financial information is very important. We maintain physical,

electronic, and procedural safeguards to protect your personal Account information. Our employees

and agents have access to that information only so that they may offer you products or provide

services, for example, when responding to your Account questions.

How You Can Help

You can also do your part to keep your Account information private and to prevent unauthorized

transactions. If you obtain a user ID and password for your Account, do not allow it to be used

by anyone else. Also, take special precautions when accessing your Account on a computer used

by others.

Ascensus Privacy Policy

Under the terms of the contract between Ascensus and Scholar’s Edge, Ascensus is required to treat

all personal information confidentially. Ascensus is prohibited from using or disclosing such

information, except as may be necessary to perform its obligations under the terms of its contract with

Scholar’s Edge or if required by applicable law, by court order or by other order.

Scholarsedge529.com

Plan Governance

Scholar’s Edge. Scholar’s Edge is a Qualified Tuition Program that is operated under the Trust

established pursuant to the Enabling Legislation.

The Enabling Legislation authorizes the Board to establish and administer Qualified Tuition

Programs and gives the Board power to develop and implement Scholar’s Edge through the

establishment of rules, guidelines, procedures, or policies. In addition, the Board is provided

discretion with regard to the formation of Scholar’s Edge, including the establishment of minimum

Account contributions and retention of professional services necessary to assist in the administration

of Scholar’s Edge. Scholar’s Edge is administered by the Board of the Trust, an instrumentality of

the State.

The Board and Declaration of Trust. The Plan is sponsored by the State of New Mexico and is

administered by the Board. The Board, which serves as Trustee of the Trust, has the authority to

appoint a Program Manager and other service providers to the Plan, adopt rules and regulations to

implement and administer the Plan and the Trust, and establish investment policies for the Trust.

The Plan is implemented in part pursuant to a declaration of trust (the Declaration of Trust) adopted

by the Board. The Declaration of Trust governs the terms of the Trust and the respective obligations

of the Program Manager and its affiliated service providers and the Board. The Trust assets are

maintained separately from other plans within the New Mexico 529 Program and assets of the State

of New Mexico.

The Enabling Legislation established the Education Trust Board of New Mexico, for the purpose of

administering the Act. The Education Trust Board is comprised of five members. One of these

members sits on the Board by virtue of the position he or she holds in New Mexico State

Government—the Secretary of the New Mexico Department of Higher Education (or the

Secretary’s designee). The Governor of the State of New Mexico (two members), the Speaker of the

New Mexico House of Representatives, and the President Pro Tempore of the New Mexico Senate

appoint the remaining members, respectively.

The Board reserves the right at any time, and without consent of or notice to Account Owners or

Beneficiaries, among other things, to:

• Refuse, change, discontinue or temporarily suspend accepting contributions, rollovers or

transfers and processing withdrawal requests;

• Delay sending out the proceeds of a withdrawal request for up to five business days;

• Change the Plan’s Fees and expenses;

• Change the maximum account balance limit;

• Add, subtract, terminate, or merge Portfolios, the asset allocation of the Portfolios, or the

Underlying Investment(s) in which any Portfolio invests;

• Terminate an Account and/or assess a penalty against the Account if the Board determines

that the Account Owner or the Beneficiary has provided false or misleading information to

the Board, the Program Manager, the Plan’s other service providers, or an Eligible

Educational Institution;

• Terminate the Management Agreement and the Principal Services Agreement and replace the

Program Manager and the Plan’s other service providers;

Scholarsedge529.com

• Amend the Declaration of Trust, the Participation Agreement, this Plan Description and

Participation Agreement and the Enrollment Application; and

• Suspend or terminate the Trust without any action on the part of the Account Owners or

Beneficiaries by giving written notice of such action to Account Owners, so long as after the

action the assets in the Account are still held for the exclusive benefit of the Account Owner

and the Beneficiaries.

Program Manager to Scholar’s Edge. Ascensus College Savings Recordkeeping Services, LLC, the

Program Manager, and its affiliates, have overall responsibility for the day-to-day operations of the

Plan, including recordkeeping and administrative services.

Investment Advisor to Scholar’s Edge. Principal Global Investors, LLC, a registered investment

advisor with the SEC, serves as the investment advisor to the Plan. PGI is responsible for, among

other responsibilities, providing recommendations to the Board for the Underlying Investments in

which the Portfolios invest, monitoring and rebalancing the asset allocations of the Portfolios,

monitoring the Portfolios’ compliance with the Board’s Investment Policy Statement and applicable

law. PGI is the Investment Manager of the Principal Underlying Funds. PGI is also affiliated with

Principal Life, the life insurance company that issued the Scholar’s Edge Guaranteed Contract. PGI,

Principal Life, and their affiliates receive additional revenues from their affiliated Underlying

Investments in the Plan. PGI may consider such revenues when recommending Underlying

Investments and Portfolio asset allocations to the Board. PGI may also consider revenues that it or

its affiliates receive or may receive from unaffiliated Underlying Investments when making such

recommendations. Under the Principal Services Agreement, it is expected that no less than 75% of

the assets under management in Scholar’s Edge will be invested in Underlying Investments

managed by PGI. PGI has a fiduciary duty to the Board to make recommendations that are in the

best interest of Scholar’s Edge.

Distributor to Scholar’s Edge. Principal Funds Distributor, Inc. serves as the distributor of the Plan.

PFD is registered as a broker-dealer under the Securities Exchange Act of 1934 and is a member of

FINRA and the MSRB. PFD is responsible for, among other responsibilities, marketing Scholar’s

Edge, entering into selling agreements with Dealers who will offer and sell interests in Scholar’s

Edge, and providing other distribution-related services to the Board, the Plan, the Program Manager,

PGI, Underlying Funds, and the Investment Managers.

Program Manager Address.

1001 E 101

Terrace, Suite 220

Kansas City, MO 64131

All general correspondence, however, should be addressed to:

Scholar’s Edge, P.O. Box 219798, Kansas City, MO 64121-9798

PGI and PFD Address. 801 Grand Avenue, Des Moines, IA 50392

Scholarsedge529.com

Participation Agreement

In this section, we ask you to indemnify the Plan Officials, make certain representations to us and

acknowledge your responsibilities. By opening an Account, the Account Owner agrees to be bound

by the terms of this Participation Agreement.

Indemnity

As an Account Owner, I agree to and acknowledge the following indemnity:

1. I am opening an Account in the Trust based upon my statements, agreements, representations,

warranties, and covenants as set forth in the Plan Description and Participation Agreement and

Enrollment Form.

2. I, by executing the Enrollment Form, as applicable, agree to indemnify and hold harmless the

Plan Officials from and against any and all loss, damage, liability, penalty, tax, or expense,

including costs of reasonable attorneys’ fees, which they incur by reason of, or in connection

with, any misstatement or misrepresentation that is made by me or my Beneficiary, any breach

by me of the acknowledgements, representations, or warranties in the Plan Description and

Participation Agreement and Enrollment Form, or any failure by me to fulfill any covenants or

agreements in the Plan Description and Participation Agreement or Enrollment Form.

Representations, Warranties and Acknowledgements

I, as Account Owner, represent and warrant to, and acknowledge and agree with, the Board

regarding the matters set forth in the Plan Description and Participation Agreement and Enrollment

Form including that:

1. I have received, read, and understand the terms and conditions of the Plan Description and

Participation Agreement, Enrollment Form and any additional information provided to me by the

Plan Officials with respect to the Trust or the Plan.

2. I certify that I am a natural person, at least 18 years of age, and a citizen or a resident of the

United States of America, who resides in the United States of America or, that I have the

requisite authority to enter into this participation agreement and to open an Account for the

Beneficiary. I also certify that the person named as Beneficiary of the Account is a citizen or a

resident of the United States of America.

3. I understand that the Plan is intended to be used only to save for Qualified Expenses.

4. I understand that any contributions credited to my Account will be deemed by the Plan Officials

to have been received from me and that contributions by third parties may result in adverse tax

or other consequences to me or those third parties.

5. If I am establishing an Account as a Custodian for a minor under UGMA/UTMA, I understand

and agree that I assume responsibility for any adverse consequences resulting from the

establishment, maintenance, or termination of the Account.

Scholarsedge529.com

6. If I am establishing an Account as a trustee for a trust, I represent that: (i) the trustee is the

Account Owner; (ii) the individual signing the Enrollment Form, as applicable, is duly authorized

to act as trustee for the trust; (iii) the Plan Description and Participation Agreement may not

discuss tax consequences and other aspects of the Plan of particular relevance to the trust and

individuals having an interest in the trust; and (iv) the trustee, for the benefit of the trust, has

consulted with and relied on a professional advisor, as deemed appropriate by the trustee, before

becoming an Account Owner.

7. I understand that Plan assets may be allocated among equity funds, fixed income funds, capital

preservation funds, funding agreements, and other investments.

8. In making my decision to open an Account and completing my enrollment, I have not relied

upon any representations or other information, whether written or oral, other than as set forth in

the Plan Description and Participation Agreement, and I have considered the availability of

alternative education savings and investment programs, including other Qualified Tuition

Programs.

9. I understand the I am solely responsible for determining which Qualified Tuition Program is best

suited to my needs and objectives. I understand that Scholar’s Edge and the Investment

Portfolios offered by the Plan may not be for all investors as a means of saving and investing for

education costs. I have determined that an investment in Scholar’s Edge is a suitable investment

for me as a means of saving for the Qualified Expenses of my Beneficiary.

10. I have been given an opportunity to obtain any additional information needed to complete my

enrollment and/or verify the accuracy of any information I have furnished. I certify that all of the

information that I provided in the Enrollment Form, as applicable, and any other documentation

subsequently furnished in connection with the opening or maintenance of, or any withdrawals

from, my Account is and shall be accurate and complete, and I agree to notify the Board or the

Program Manager promptly of any material changes in this information.

11. The value of my Account depends upon the performance of the Portfolios. I understand that at

any time the value of my Account may be more or less than the amounts contributed to the

Account. I understand that all contributions to my Account are subject to investment risks,

including the risk of loss of all or part of the contributions and any return or interest earned. I

understand that the value of the Account may not be adequate to fund actual Qualified Expenses.

12. I understand that although I own Units in a Portfolio, I do not have a direct beneficial interest in

the Underlying Investments and other investment products approved by the Board from time to

time, and therefore, I do not have the rights of an owner or shareholder of those Underlying

Investments. I further understand that I received no advice or investment recommendation from,

or on behalf of, the Plan Officials.

13. After I make my initial contribution to a specific Investment Portfolio, I will be allowed to direct

the further investment of that contribution no more than two (2) times per calendar year. I

understand that Units in a Portfolio may be exchanged only for Units of the same Unit Class in

another Portfolio.

14. I cannot use my Account as collateral for any loan. I understand that any attempt to use my

Account as collateral for a loan would be void. I also understand that the Trust will not lend any

assets to my Beneficiary or to me.

Scholarsedge529.com

15. I understand that, if I so elect, the Program Manager has the right to provide the Financial

Professional I have identified to the Program with access to financial and other information

regarding my Account. Access may be limited or restricted by the Plan or its representatives if

needed to safeguard the account. You will be notified of any such restrictions.

16. I understand that, unless otherwise provided in a written agreement between me and my

Financial Professional, or between me and the Board or the Program Manager, no part of my

participation in the Plan will be considered the provision of an investment advisory service.

17. Except as described in this Plan Description and Participation Agreement, I will not assign or

transfer any interest in my Account. I understand that, except as provided under New Mexico

law, any attempt to assign or transfer that interest is void.

18. I acknowledge that the Plan intends to qualify for favorable U.S. federal tax treatment under the

Code. Because this qualification is vital to the Plan, the Board may modify the Plan or amend

this Plan Description and Participation Agreement at any time if the Board decides that the

change is needed to meet the requirements of the Code or the regulations administered by the

IRS pursuant to the Code, State law, or applicable rules or regulations adopted by the Board or

to ensure the proper administration of the Plan.

19. The Plan Officials, individually and collectively, do not guarantee that my Beneficiary: will be

accepted as a student by a particular elementary or secondary school, any institution of higher

education or other institution of post-secondary education; if accepted, will be permitted to

continue as a student; will be treated as a state resident of any state for Qualified Expenses

purposes; will graduate from any elementary or secondary school, any institution of higher

education or other institution of post- secondary education; or will achieve any particular

treatment under any applicable state or U.S. federal financial aid programs; or guarantee any rate

of return or benefit for contributions made to my Account.

20. The Plan Officials, individually and collectively, are not liable for:

a. A failure of Scholar’s Edge to qualify or to remain a Qualified Tuition Program under

the Code including any subsequent loss of favorable tax treatment under state or U.S.

federal law;

b. Any loss of funds contributed to my Account or for the denial to me or my Beneficiary

of a perceived tax or other benefit under Scholar’s Edge, the Declaration of Trust, or

the Enrollment Form; or any loss, failure or delay in performance of each of their

obligations related to your Account or any diminution in the value of your Account

arising out of or caused, directly or indirectly, by circumstances beyond its reasonable

control in the event of Force Majeure (See “Market Uncertainties and Other Events”

in the Section entitled “Important Risks You Should Consider” for the definition of

“Force Majeure”).

21. My statements, representations, warranties, and covenants will survive the termination

of my Account.

22. Waiver and Release: You agree that any claim by you or the Beneficiary against any

Plan Official may be made solely against the assets in your Account and that all

obligations hereunder are legally binding contractual obligations of the Plan, you agree

to the condition of and in consideration for the acceptance of this Agreement by the

Scholarsedge529.com

Program Manager on behalf of the Plan, you agree to waive and release all Plan

Officials from any and all liabilities arising in connections with rights or obligations

arising out of this Participation Agreement or the Account.

Claims; Disputes. All decisions and interpretations by the Plan Officials in connection with the

operation of the Plan will be final and binding upon you, the Beneficiary, and any other person

affected. Any claim by you or your Beneficiary against the Plan Officials, individually or

collectively, with respect to your Account will be made solely against the assets in your Account.

The obligations of The Scholar’s Edge 529 Plan under your agreement with the Trust are monies

received from you and earnings and/or losses from your Account investments, and neither you nor

your Beneficiary will have recourse against the Plan Officials, collectively or individually, in

connection with any right or obligations arising out of an Account. Assets in your Account are not

an obligation of the State.

Any controversies that may arise between you or the Beneficiary and Board involving any

transaction in your Account, or the construction, performance, or breach of this Participation

Agreement, may be determined by arbitration or court proceedings, as determined by the Board in

its sole discretion. If there is a dispute between you or the Beneficiary and the Board that is

adjudicated in the courts, you hereby submit (on behalf of yourself and the Beneficiary) to exclusive

jurisdiction in the courts of New Mexico for all legal proceedings arising out of or relating to this

Participation Agreement. In any such proceeding, you (on behalf of yourself and the Beneficiary)

and the Board each waive your rights to trial by jury. If there is a dispute between you or the

Beneficiary and the Board that the Board determines, in its sole discretion, has to be arbitrated, you

agree (on behalf of yourself and the Beneficiary) that the arbitration will be conducted in New

Mexico pursuant to the then current rules for such proceedings as provided under the Uniform New

Mexico Arbitration Act.

Lawsuits Involving Your Account. Except as to controversies arising between you or the

Beneficiary and the Board, the Board may apply to a court at any time for judicial settlement of any

matter involving your Account. If the Board does so, they must give you or your Beneficiary the

opportunity to participate in the court proceeding, but they also can involve other persons. Any

expense incurred by the Plan Officials in legal proceedings involving your Account, including

attorney’s fees and expenses, are chargeable to your Account and payable by you or your

Beneficiary if not paid from your Account.

Severability. In the event that any clause or portion of the Plan Description and Participation

Agreement or the Enrollment Form, including your representations, warranties, certifications, and

acknowledgements, is found to be invalid or unenforceable by a valid court order, that clause or

portion will be severed from the Plan Description and Participation Agreement or the Enrollment

Form, as applicable, and the remainder of the Plan Description and Participation Agreement or

Enrollment Form, as applicable, will continue in full force and effect as if that clause or portion had

never been included.

Precedence. Except as otherwise expressly provided in the Declaration of Trust, in the event of

inconsistencies between the Plan Description and Participation Agreement, the Management

Agreement, Principal Services Agreement, Board policy or any rules adopted by the Board, and the

Code or New Mexico statutes, the provisions of the New Mexico statutes or the Code, as applicable,

will govern. To the extent permitted by New Mexico law, the Code will govern in the event of any

Scholarsedge529.com

inconsistencies between New Mexico statutes and the Code.

New Mexico Law. The Plan is created under the laws of the state of New Mexico. It is governed by,

construed, and administered in accordance with the laws of the State. The venue for disputes and all

other matters relating to the Plan will only be in the State.

Binding Nature. The Plan Description and Participation Agreement and your agreement to

participate in the Plan are binding upon the parties and their respective heirs, successors,

beneficiaries, and permitted assigns. By signing an Enrollment Form, you agree that all of your

representations and obligations are for the benefit of the Plan Officials, all of whom can rely upon

and enforce your representations and obligations contained in the Plan Description and Participation

Agreement and the Enrollment Form.

Arbitration In connection with any arbitration, I understand that:

I am giving up important rights under state law, including the right to sue in court and the

right to a trial by jury, except as provided by the rules of the arbitration forum in which the

claim is filed;

Arbitration awards are generally final and binding, and my ability to have a court reverse or

modify an arbitration award is very limited;

My ability to obtain documents, witness statements, and other discovery is generally more

limited in arbitration than in court proceedings;

The potential cost of arbitration may be more or less than the cost of litigation;

The arbitrators generally do not have to explain the reason(s) for their award and the Board

does not guarantee that it will join any request I may make for such an explanation;

The arbitrators selected to hear the case may or may not be affiliated with the securities

industry;

In limited circumstances, a claim that is ineligible for arbitration may be brought in court;

and

The rules of the arbitration forum are incorporated by reference into this Plan Description

and Participation Agreement and are available by contacting a Client Service Representative

at 1.877.337. 5268.

To the extent permitted by applicable law the terms and conditions of the agreement between you

and the Trust and New Mexico law will be applied by the arbitrator(s), when applicable, without

regard to conflict of laws principles.

You may have other rights under FINRA’s Code of Arbitration Procedure.

Neither the Board nor I can bring a putative or certified class action to arbitration, or seek to enforce

any pre-dispute arbitration agreement against any person who has initiated in court a putative class

action; who is a member of a putative class who has opted out of the class with respect to any

claims encompassed by the putative class action until: (i) the class certification is denied; or (ii) the

class is decertified; or (iii) the person is excluded from the class by the court. A failure to enforce

Scholarsedge529.com

this arbitration provision does not constitute a waiver of any of the Plan Official’s rights under the

Plan Description and Participation Agreement or the Enrollment Form or your Account except to

the extent set forth in this Arbitration Section.

Scholarsedge529.com

Each Portfolio, except the Scholar’s Edge Capital Preservation Portfolio, invests in one or more

Underlying Funds. The Scholar’s Edge Capital Preservation Portfolio invests, and the Scholar’s

Edge Year of Enrollment Portfolios and certain Scholar’s Edge Target Risk Portfolios also invest, in

the Scholar’s Edge Guaranteed Contract. See Investment Information – Portfolio Descriptions

starting on page 60 for the Portfolios’ Underlying Investment(s).

This appendix provides additional information about the Portfolios’ Underlying Investments,

including information regarding Underlying Fund share classes; Underlying Fund investment

objectives, strategies, and risks; and the Scholar’s Edge Guaranteed Contract. The information in

this appendix is current as of the date of this Plan Description and Participation Agreement.

Here is where you can find specific Underlying Investment information in this appendix:

• U

nderlying Fund Share Classes p. 96

• I

nvestment Objectives, Principal Investment Strategies, and Principal Risks of the

Underlying Funds p. 97

• E

xplanation of Investment Risks for the Underlying Funds p. 108

• A

dditional Information about the Scholar’s Edge Guaranteed Contract p. 125

If you have questions about any of the investment-related information in this section, please call a

Client Service Representative at 1.866.529.7283 prior to making an investment decision. If you

have questions about any of the Underlying Funds, you may also contact the Investment Managers

directly.

UNDERLYING FUND SHARE CLASSES

The following table shows the shares classes of the Underlying Funds in which the Portfolios invest.

Underlying Fund (Ticker)

Class

iShares Core S&P 500 ETF (IVV)

N/A*

iShares Core S&P Small-Cap ETF (IJR)

N/A*

iShares Core U.S. Aggregate Bond ETF (AGG)

N/A*

JPMorgan Emerging Markets Equity Fund

(JEMWX)

MainStay MacKay High Yield Corporate Bond

Fund (MHYSX)

Principal Blue Chip Fund (PGBHX)

Principal Equity Income Fund (PEIIX)

Institutional

Principal Core Fixed Income Fund (PICNX)

Principal Real Estate Securities Fund (PFRSX)

Principal Short-Term Income Fund (PSHIX)

Institutional

Principal Diversified International Fund

(PDIFX)

Appendix A: Additional Underlying

Investment Information

Scholarsedge529.com

Vanguard Mid-Cap Index Fund (VMCIX)

Institutional

Plus

Vanguard Total International Bond ETF (BNDX)

N/A*

Vanguard Total World Stock ETF (VT)

N/A*

*The Underlying Fund is an ETF, which does not offer multiple share classes.

INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT STRATEGIES, AND PRINCIPAL

RISKS OF THE UNDERLYING FUNDS

The information below is a summary of the investment objectives, principal investment strategies,

and principal risks of the Underlying Funds based on the Underlying Funds’ current prospectuses as

of the date of this Plan Description and Participation Agreement. Each Underlying Fund’s current

prospectus and statement of additional information contains information not summarized here and

identifies additional principal risks to which the Underlying Fund may be subject.

iShares Core S&P 500 ETF (IVV)

Investment Objective. The iShares Core S&P 500 ETF seeks to track the investment results of an

index composed of large-capitalization U.S. equities.

Principal Investment Strategies. The fund seeks to track the investment results of the S&P 500,

which measures the performance of the large-capitalization sector of the U.S. equity market, as

determined by S&P Dow Jones Indices LLC. As of March 31, 2022, the underlying index included

approximately 82% of the market capitalization of all publicly traded U.S. equity securities. The

securities in the underlying index are weighted based on the float-adjusted market value of their

outstanding shares. The underlying index consists of securities from a broad range of industries. As

of March 31, 2022, a significant portion of the underlying index is represented by securities of

companies in the technology industry or sector. The components of the underlying index are likely

to change over time.

The fund’s advisor uses a “passive” or indexing approach to try to achieve the fund’s investment

objective. Unlike many investment companies, the fund does not try to “beat” the index it tracks and

does not seek temporary defensive positions when markets decline or appear overvalued.

Indexing may eliminate the chance that the fund will substantially outperform the underlying index

but also may reduce some of the risks of active management, such as poor security selection.

Indexing seeks to achieve lower costs and better after-tax performance by aiming to keep portfolio

turnover low in comparison to actively managed investment companies.

The fund’s advisor uses a representative sampling indexing strategy to manage the fund.

“Representative sampling” is an indexing strategy that involves investing in a representative sample

of securities that collectively has an investment profile similar to that of an applicable underlying

index. The securities selected are expected to have, in the aggregate, investment characteristics

(based on factors such as market capitalization and industry weightings), fundamental

characteristics (such as return variability and yield) and liquidity measures similar to those of an

applicable underlying index. The fund may or may not hold all of the securities in the underlying

index.

The fund generally will invest at least 80% of its assets in the component securities of its underlying

index and in investments that have economic characteristics that are substantially identical to the

component securities of its underlying index (i.e., depositary receipts representing securities of the

underlying index) and may invest up to 20% of its assets in certain futures, options and swap

Scholarsedge529.com

contracts, cash and cash equivalents, including shares of money market funds advised by The fund’s

advisor or its affiliates, as well as in securities not included in the underlying index, but which the

fund’s advisor believes will help the fund track the underlying index. Cash and cash equivalent

investments associated with a derivative position will be treated as part of that position for the

purposes of calculating the percentage of investments included in the underlying index. The fund

seeks to track the investment results of the underlying index before fees and expenses of the fund.

The fund may lend securities representing up to one-third of the value of the fund’s total assets

(including the value of any collateral received).

The underlying index is a product of the index provider, which is independent of the fund and the

fund’s advisor. The index provider determines the composition and relative weightings of the

securities in the underlying index and publishes information regarding the market value of the

underlying index.

Industry Concentration Policy. The fund will concentrate its investments (i.e., hold 25% or more of

its total assets) in a particular industry or group of industries to approximately the same extent that

the underlying index is concentrated. For purposes of this limitation, securities of the U.S.

government (including its agencies and instrumentalities) and repurchase agreements collateralized

by U.S. government securities are not considered to be issued by members of any industry.

Principal Investment Risks. Asset Class Risk; Authorized Participant Concentration Risk;

Concentration Risk; Cybersecurity Risk; Equity Securities Risk; Index-Related Risk; Infectious

Illness Risk; Issuer Risk; Large-Capitalization Companies Risk; Management Risk; Market Risk;

Market Trading Risk; Operational Risk; Passive Investment Risk; Risk of Investing in the U.S.;

Securities Lending Risk; Technology Sector Risk; and Tracking Error Risk.

iShares Core S&P Small-Cap ETF (IJR)

Investment Objective. The iShares Core S&P Small-Cap ETF seeks to track the investment results

of an index composed of small-capitalization U.S. equities.

Principal Investment Strategies. The fund seeks to track the investment results of the S&P Small

Cap 600, which measures the performance of the small capitalization sector of the U.S. equity

market, as determined by S&P Dow Jones Indices LLC. As of March 31, 2022, the underlying

index included approximately 2% of the market capitalization of all publicly traded U.S. equity

securities. The securities in the underlying index are weighted based on the float-adjusted market

value of their outstanding shares, and have, as of March 31, 2022, a market capitalization between

$186.13 million and $7.98 billion at the time of inclusion in the underlying index, which may

fluctuate depending on the overall level of the equity markets. The securities are selected by the

index provider based on certain factors including the index provider’s liquidity measures. The

underlying index consists of securities from a broad range of industries. As of March 31, 2022, a

significant portion of the underlying index is represented by securities of companies in the

financials industry or sector. The components of the underlying index are likely to change over

time.

The fund’s advisor uses a “passive” or indexing approach to try to achieve the fund’s investment

objective. Unlike many investment companies, the fund does not try to “beat” the index it tracks and

does not seek temporary defensive positions when markets decline or appear overvalued.

Indexing may eliminate the chance that the fund will substantially outperform the underlying index