PEEC releases final revised guidance for Sec. 529 plans

The AICPA Professional Ethics Executive Committee (PEEC) approved revisions to the “Section 529 Plans” interpretation (ET §1.240.070) of the Code of Professional Conduct’s “Independence Rule.”

The revisions affect members in public practice and will be effective May 31, 2025.

Commenters on PEEC’s 2021–2023 strategy and work plan had concerns about monitoring challenges and independence threats related to an account owner’s financial interest in Sec. 529 savings plans. PEEC looked at how Sec. 529 plans operate today and determined that the interpretation should be updated.

After research and consultation, PEEC determined that the account owner’s interest in the savings plan’s underlying investments constitutes an indirect financial interest, rather than a direct one. In addition to that change, the revisions introduce specific safeguards related to the materiality of these holdings. The changes aim to maintain practitioner independence and provide clearer guidelines for managing Sec. 529 plans.

Learn more about PEEC’s rationale and process for the revisions by reading the committee’s meeting minutes and the exposure draft (free account registration required).

— Kelly D. Mullins is the communications manager for the AICPA Professional Ethics Division. To comment on this article or to suggest an idea for another article, contact Neil Amato at Neil.Amato@aicpa-cima.com.