LANSING, Mich., Oct. 17, 2013 /PRNewswire-iReach/ -- The total value of funds invested in the Michigan Education Savings Program (MESP) has surpassed $3.5 billion, resulting in a 25 percent drop in what already were among the lowest management fees of all direct-sold 529 college savings programs in the country.
The milestone is good news for the 114,000 families who are saving for college through MESP, said Michael Noone, president of TIAA-CREF Tuition Financing, Inc., which manages the program on behalf of the Michigan Department of Treasury.
"Each decline in fees allows more of investors' funds to go toward college savings goals and less to administrative costs," he said. "MESP will continue to strive to be a low-cost, flexible 529 college savings plan to help families and students reach their education vision."
As a result of the decrease, the program's total annual management and administrative fees now range from .18 to .28 percent, depending on the investment choices in individual MESP accounts. That translates to between $1.80 and $2.80 for every $1,000 invested.
The state of Michigan's contract with TIAA-CREF Tuition Financing, Inc., calls for management fees to further drop once MESP's total assets reach $4 billion.
MESP is already nationally recognized for its low fees. A study released in July by Savingforcollege.com cited the program as having among the lowest expenses of all 55 direct-sold 529 plans in the nation.
According to the website's 529 Fee Study, MESP was among only six widely available state-sponsored 529 plans with at least one stock- or bond-based option with 10-year costs totaling under $300 on a $10,000 initial investment.
Savingforcollege.com also ranks MESP high in investment performance. The website said that, as of June 30, 2013, MESP produced the sixth-best one-year investment performance among all 529 college savings plans nationwide. MESP also achieved the 10th-best three-year performance and ninth-best five-year performance, the website determined.
Savingforcollege.com is an independent company that aims to help consumers and professional advisers better understand the challenge of paying higher education costs. It describes its rankings as potential resources for investors when selecting which 529 plans are right for them.
Information on the MESP's fees and expenses and investment performance is available at MIsaves.com. TIAA-CREF Tuition Financing, Inc., notes that past performance is no guarantee of future results.
MESP is one of three Michigan Section 529 plans, all of which offer Michigan taxpayers a state income tax deduction on contributions and potential tax-free growth on any earnings if account proceeds are used to pay for qualified expenses. MESP can be used at any eligible college, university or trade school in the nation for a variety of qualified expenses, including tuition, mandatory equipment, fees, certain room and board costs and books. Limitations apply. See the MESP Disclosure Booklet for details.
To learn more about MESP, visit MIsaves.com or contact us at 877-861-6377.
Consider the investment objectives, risks, charges and expenses before investing in the Michigan Education Savings Program. Please visit www.misaves.com for a Disclosure Booklet containing this and other information. Read it carefully. Investments in the plan are neither insured nor guaranteed and there is the risk of investment loss.
Before investing in a 529 plan, you should consider whether the state you or your designated beneficiary reside in or have taxable income in has a 529 plan that offers favorable state income tax or other benefits that are only available if you invest in that state's 529 plan.
The tax information contained herein is not intended to be used, and cannot be used, by any taxpayer for the purpose of avoiding tax penalties. Taxpayers should seek advice based on their own particular circumstances from an independent tax advisor. Non-qualified withdrawals are subject to federal and state taxes and the additional 10% federal penalty tax.
TIAA-CREF Tuition Financing, Inc., MESP Program Manager
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SOURCE Michigan Education Savings Program