2010 To Mark Yet Another Impressive Year for the Montana Family Education
Savings Program
College Savings Bank's Program Manager Contract Extended by State and Program to
add new equity provider in 2010
(Princeton, NJ- January 29, 2010) - With account originations up
30%, 2009 capped another milestone year for the Montana Family Education Savings
Program (MFESP). Program Manager, College Savings Bank has been helping Montana
families save for college through this tax-sheltered 529 plan for more than 12-years,
and was recently awarded a contract extension by the Montana Board of Regents through
June of 2013.
The MFESP, Montana's state-sponsored 529 plan, offers Montana residents a
tax-advantaged college savings vehicle that includes tax-free earnings, tax-free
withdrawals when distributions are used to pay qualified higher education expenses, and
a state income tax deduction to gross income per taxpayer, $6,000 for those filing
jointly, based on contributions to the Program.
Through College Savings Bank, the MFESP has consistently featured FDIC insured
savings products that protect principal; such as the CollegeSure CD, InvestorSure CD,
and the 2009 addition of a series of fixed rate CDs. Through those savings vehicles
alone, more than 10,500 families have saved nearly $200 million to help fund a future
college education.
"Over the previous two years, volatility in the stock market has lead many
state-sponsored 529 plans to consider FDIC insured savings products," said Bruce Marks
Director of the MFESP. "Montanans have been afforded that level of safety for their
children's college fund since 1998".
The MFESP also includes equity investments, added to the Program in 2002. Later this
year, the MFESP is planning to make some exciting changes to that equity line up.
Pacific Life Funds (PLF) has decided not to continue in the capacity of Equity Manager
within the MFESP beyond their current contract that expires in June 2011. The Montana
University System Board of Regents, the trustee of the MFESP, has already approved the
addition of a new equity provider. As soon as contracts are signed information will be
made available about the new equity partner.
Current account holders will have several options during this transition:
1. Allow the Board of Regents (the Trustee) to automatically transfer PLF
investments to the new provider into a comparable investment type;
- A Trustee-directed transfer does not count as your once-a-calendar-year
investment change
- PLF has agreed to waive fees in this scenario
2. Move their PLF investments (this does count as your once-a-calendar-year
investment change)
- If account holders move to another MFESP investment (such as into a
College Savings Bank FDIC insured product), PLF has agreed to waive
fees
- If they move to another state's program, PLF will NOT waive
fees
Investments with College Savings Bank are not impacted and all
account holders may continue to make regular college savings plan
investments, however after February of 2010, residents will be required
to purchase PLF equity products directly (i.e. they will not able to
purchase PLF through your broker). All new PLF purchases will also be
moved to our new equity provider later in the year.
"While the Montana Family Education Savings Program will be sad to
say goodbye to what has been an outstanding partnership with Pacific
Life Funds," added Marks "we also look forward to a new partnership
that should prove to be every bit as good - or may be better".
Member FDIC. FDIC deposit insurance temporarily
increased from $100,000 to $250,000 per depositor through December 31,
2013. Before investing in any 529 plan, investors should consider the
benefits of their home state's 529 plan. It may provide taxpayers with
state tax and other benefits that are only available through a home
state's 529 plan. Investors should also consult a financial, tax, or
other advisor to learn how state-based benefits (or limitations) would
apply to specific circumstances. Investors also may wish to contact
their home state's 529 plan[s], or any other 529 college savings plan,
to learn more about those plans' features, benefits and limitations.
Keep in mind that state-based benefits should be one of many
appropriately weighted factors to be considered when making an
investment decision. Early withdrawal tax penalties apply and
non-qualified withdrawals are taxable. For Montana residents,
distributions may also be subject to a Montana recapture tax on the
deductible contribution amount. The College Savings Bank 529 Plan is
not insured by the State of Montana. Neither the principal invested nor
the investment return is guaranteed by the State of Montana. © 2009
College Savings Bank. All rights reserved. InvestorSure is a registered
service mark of College Savings Bank. S&P 500 is a registered
trademark, used with permission, of The McGraw-Hill Companies, Inc.
Read the 529 Plan Disclosure Statements carefully before you invest or
send any money.
This material is not intended to be used, nor can it be used by any
taxpayer, for the purpose of avoiding U.S. federal, state, or local tax
penalties. This material is written to support the promotion or
marketing of the transaction(s) or matter(s) addressed by this
material. College Savings Bank and its affiliates and respective
representatives do not provide tax, accounting, or legal advice. Any
taxpayer should seek advice based on the taxpayer's particular
circumstances from an independent tax advisor.