Missouri families wanting to invest in a college fund can do so at a 44 percent reduction in expenses through a state plan. State Treasurer Clint Zweifel says that makes the MOST plan the fifth lowest in the nation.
MOST-Missouri 5-29 is a college savings plan that lets Missouri families plan for their child’s education future at a considerable tax savings, all while gaining interest.
The fund can be cashed out for colleges, universities and trade schools … in or out-of-state. Zweifel says along with the savings, the plan’s flexibility is a main selling point. The fund can be transferred from child to child as well.
New cost savings in the MOST plan are a result of a new five-year public-private partnership with Upromise Investments and Vanguard that’s expected to save investors $18.5 million. The deal also includes a half million dollar financial aid package.
“The cost reductions and the $500,000 financial assistance package are a reflection of the commitment to higher education that parents and students are already making,” Treasurer Zweifel said. “Saving early and saving often is important for families thinking about college. Lower expenses on the MOST 529 Plan means that Missourians keep more of their money invested in the future of their children.”
The direct-sold MOST 529 Plan will feature low-cost Vanguard investments, including three age-based options, eight index-based portfolios, two conservative portfolios and four actively-managed portfolios. Costs will range from 0.29 percent to 0.38 percent for age-based, index-based and conservative options, which previously cost 0.55 percent. Actively managed portfolios will range 0.53 percent to 0.60 percent, which previously ranged 0.87 percent to 1.58 percent. The total asset weighted cost of the direct-sold MOST 529 Plan is now 0.32 percent – fifth lowest in the nation.
Missourians preferring to save through a financial advisor now have expanded world-class investment options through DWS Investments, the United States retail division of the world’s eighth largest asset manager. The advisor-sold MOST 529 Plan will be distributed solely through DWS Investments Distributors, while continuing to provide access to other investments, including American Century, American Funds, BlackRock, Columbia, Franklin Templeton, Invesco, PIMCO and T. Rowe Price. Investors will continue to have access to the Scout International Terror-Free portfolio from UMB Bank. No account owner will see a fee increase and 27 percent will see fees decrease.
Between the direct-sold and advisor-sold MOST 529 Plans, there are 129,000 college savers with more than $1.7 billion going towards higher education.
“Participation in MOST 529 Plans is up 50 percent since I took office in 2009, meaning more Missourians than ever are saving for the higher education of the children in their lives,” Treasurer Zweifel said. “I am passionate about continuing to promote the MOST 529 Plans not only as State Treasurer, but as a father of two girls. With the growth of each MOST 529 Plan, scale has enabled us to realize cost savings that rewards Missouri’s families. This makes higher education more affordable for all Missourians.”
Details for the new five-year $500,000 financial assistance package are expected to be made public in September.
“Just like many Missourians and their families, I combined savings, scholarships and part-time jobs to be the first in my family to graduate from college,” Treasurer Zweifel said. “Missourians have steadfastly saved record amounts and we are rewarding that commitment.”
To open a MOST 529 direct-sold account, visit www.MissouriMost.org or call 1-888-414-MOST. An account can be started for $25.
To open a MOST 529 advisor-sold account, contact your financial advisor, call 1-800-617-5097 or visit www.Most529Advisor.com.
About the Agreement
The cost cutting and financial assistance comes as a result of a competitive bid administered by the Missouri Higher Education Savings Program Board, which governs the direct-sold and advisor-sold MOST 529 Plans and is chaired by Treasurer Zweifel. Treasurer Zweifel provides sponsorship of MOST 529 and all board staff at no cost to investors. On February 7, the board voted unanimously to select a proposal from Upromise Investments to continue as program manager of the direct-sold and advisor-sold MOST 529 Plans. The competitive bid process began August 26, 2010. This is the third program management contract for the MOST 529 Plans. The first was entered into in 1999 and the second in 2006. This agreement will expire June 6, 2016.
About the MOST 529 Plans
State Treasurer Clint Zweifel chairs the Missouri Higher Education Savings Program Board which governs the direct-sold and advisor-sold MOST 529 Plans. He sponsors the tax-advantaged program that enables families to save for a child’s higher education. MOST 529 is an affordable, low-cost, tax-deferred way to save for higher education expenses. Investments in the plans can be used towards many qualified higher education expenses, including tuition, certain room and board expenses, books and mandatory fees at most four-year colleges and universities, many two-year institutions and vocational schools and some schools abroad. In addition, savings in MOST 529 can be used towards associate’s, bachelor’s and advanced degrees. Account owners may deduct up to $8,000 in contributions each year in computing their state income tax and married couples filing jointly may deduct up to $16,000 annually. Contributions to MOST 529 in a tax year are deductible from Missouri state income tax up to certain limits, but may be subject to recapture in subsequent years if an account owner makes a nonqualified withdrawal. As of March 31, 2011, more than 128,000 people have invested more than $1.6 billion in MOST 529, an all-time high.
About Upromise Investments
Upromise Investments is a leading administrator of 529 college savings plans, dedicated to meeting the needs of its clients, their plans and all families saving for college across the country. The company provides a range of service models, from recordkeeping and administration to full-service program management. It currently provides program management and administration services across 32 direct-sold, advisor-sold and prepaid plans in 16 states, with over $34 billion in assets as of March 31, 2011.
Headquartered in Newton, Mass., Upromise Investments is a registered broker-dealer, a member of FINRA, and is registered with the MSRB.
Vanguard, headquartered in Valley Forge, Penn., is one of the world’s largest investment management companies and a leading provider of 529 college savings plans. Vanguard manages more than $1.7 trillion in U.S. mutual fund assets, including more than $35 billion in 529 plan assets invested in 31 plans in 29 states. Vanguard offers more than 170 funds to U.S. investors and more than 50 additional funds in non-U.S. markets.
About DWS Investments
DWS Investments is the United States retail brand of Deutsche Bank’s global asset management division. DWS is the leading mutual fund brand in Germany and one of the most respected in Europe and Asia. With access to the expertise of a powerful global network in 16 countries, DWS Investments strives to make innovative investment strategies and solutions, traditionally reserved for institutions and high net worth individuals, available to the U.S. retail investor.
DWS Investments manages more than $129 billion in retail and retirement assets in more than 146 mutual funds and variable insurance portfolios across all major asset categories in the U.S. as of March 31. Organizations under the DWS brand manage approximately $354 billion globally as of March 31.
DWS Investments is part of Deutsche Bank’s Asset Management division and, within the U.S., represents the retail asset management activities of Deutsche Bank Trust Company Americas, Deutsche Investment Management Americas Inc. and DWS Trust Company.
The Fine Print
If you are not a Missouri taxpayer, consider before investing whether your or the designated beneficiary’s home state offers any state tax or other benefits that are only available for investments in such state’s qualified tuition program.
The Missouri Higher Education Savings Program (the “Program Trust”) is a trust created by the State of Missouri. When you invest in MOST-Missouri’s 529 College Savings Plan (the “Plan”) or MOST – Missouri’s 529 Advisor Plan (the “MOST 529 Advisor Plan”), you are purchasing portfolio units issued by the Program Trust. Portfolio units are municipal securities.
The Plan and the MOST 529 Advisor Plan have been implemented and are administered by the Missouri Higher Education Savings Program Board (the “Board”). Upromise Investments, Inc., and Upromise Investment Advisors, LLC, serve as the Program Manager and Recordkeeping and Servicing Agent, respectively, with overall responsibility for the day-to-day operations, including effecting transactions. The Vanguard Group, Inc., serves as Investment Manager for the Plan. Vanguard Marketing Corporation, an affiliate of The Vanguard Group, Inc., markets and distributes the Plan. The Plan’s portfolios, although they invest in mutual funds, are not mutual funds. DWS Investments Distributors, Inc. is responsible for marketing and distribution of the MOST 529 Advisor Plan. American Century Investment Services, Inc.; American Funds; BlackRock Institutional Trust Company, N.A.; Columbia Management Group, LLC, and its affiliates; DWS Investments; Franklin Templeton Investments; Invesco Advisers Inc.; Pacific Investment Management Company LLC (PIMCO); Scout Investment Advisors, Inc.; and T. Rowe Price provides the underlying investments for the MOST 529 Advisor Plan.
Participants assume all investment risks, including the potential for loss of principal, as well as responsibility for any federal and state tax consequences.
Not FDIC-Insured. No Bank, State, or Federal Guarantee. May Lose Value.