On August 17, President Bush signed the Pension Protection Act of 2006. This law makes all qualified distributions from 529 college savings plans exempt from federal income tax—before and after 2010. Under previous law, qualified withdrawals after 2010 were subject to federal income tax at the beneficiary's rate.

For more information about this legislative update or NJBEST 529 College Savings Plan, please call 1-877/4NJBEST.

Tax benefits may be conditioned on meeting certain requirements. Federal tax, a 10% penalty and state tax apply to nonqualified withdrawals of earnings. Generation-skipping tax may apply to substantial transfers to a beneficiary at least two generations below the contributor. See the Investor Handbook for more complete information.

Investors should carefully consider plan investment goals, risks, charges and expenses before investing. To obtain an Investor Handbook, which contains this and other information, call Franklin Templeton Distributors, Inc., the manager and underwriter for the plan, at 1-877/4NJBEST or visit www.NJBEST.com. You should read the Investor Handbook carefully before investing and consider whether your or the beneficiary's home state offers any state tax or other benefits that are available for investments only in its qualified tuition program.

Footnotes
1.	Offered and administered by the New Jersey Higher Education Student Assistance Authority (HESAA); managed and distributed by Franklin Templeton Distributors, Inc., an affiliate of Franklin Resources, Inc., which operates as Franklin Templeton Investments. No federal or state guarantee. Principal value may be lost, and investing in the plan does not guarantee admission to college or sufficient funds for college. Please refer to the Investor Handbook for more complete information.