Renewed contract after competitive bid brings lower fees and more investment choices to Minnesota account owners
New York, September 15, 2014 — TIAA-CREF Tuition Financing Inc. (TFI) announced it has been selected to continue managing Minnesota's 529 College Savings Plan for the next five years. TFI has also lowered its fees and is offering new investment options for account holders.
"TIAA-CREF Tuition Financing Inc. has managed Minnesota's 529 College Savings Plan since it was founded in 2001, and we are pleased to continue to help offer prospective college students and their families an affordable, flexible option to save for higher education," TFI President Michael Noone said.
The Minnesota College Savings Plan has approximately $1.2 billion in assets under management and currently helps more than 33,000 account owners save for college. Since the program began in 2001, there have been nearly $365 million qualified withdrawals paid out to almost 16,000 beneficiaries.
Under the new agreement, TFI has reduced its management fee by more than 54 percent to a uniform 15 basis points. This change puts the Minnesota College Savings Plan among the top 529 plans with the lowest fees.
TFI has also increased the number of investment options in the Minnesota College Savings Plan from seven to 11 to provide account owners with choices that better represent the full risk spectrum, including a conservative option, an aggressive option, a large cap fund option and an equity plus interest option. The plan also features an increase in the number of age bands within the managed allocation option from six to nine to give investors a more controlled, smoother reduction of their investment option's equity allocation. Additionally, the maximum contribution limit for the plan has grown from $235,000 to $350,000.
"We hope the lower fees and new investment options will encourage more families to take advantage of the benefits of Minnesota's 529 College Savings Plan," said Robert Stern, program manager for the Minnesota College Savings Plan. "As college costs continue to rise, families need to start saving as soon as possible, and we're committed to making it easy to start and keep saving."
The Minnesota College Savings Plan is an easy-to-use account that can be opened with as little as $25. Any earnings in the Minnesota College Savings Plan's investments can grow free from state and federal taxes. Withdrawals are free from state and federal taxes if used for qualified expenses at any eligible college, university, trade or career school in the U.S. and some abroad. Parents, grandparents, other relatives and friends who are U.S. citizens or resident aliens and at least 18 years of age may open an account and contribute to a Minnesota College Savings Plan account on behalf of a beneficiary. Minnesota residency is not required.
TIAA-CREF is one of the largest and longest-tenured 529 program managers in the country, offering low-cost, high-value, direct-sold 529 programs since 1998. Through TFI, the firm successfully manages 11 state-sponsored 529 college savings plans, including California, Connecticut, Georgia, Kentucky, Michigan, Minnesota, Mississippi, Oklahoma, Oregon, Vermont and Wisconsin, with total assets under management of $19.5 billion.
For more information about 529 College Savings Plans, visit the TIAA-CREF website.
TIAA-CREF (www.tiaa.org) is a national financial services organization with $613 billion in total assets under management (as of 6.30.14) and is the leading provider of retirement services in the academic, research, medical and cultural fields.
About the Minnesota 529 College Savings Plan
The Minnesota College Savings Plan is administered by the Minnesota Office of Higher Education. TIAA-CREF Tuition Financing, Inc. (TFI) serves as Plan Manager.