PA 529 Guaranteed Savings Plan Exceeds Targets, Lowers Future Assumed Rate of Return to Reduce Risk

Fund returns 6.45% in fiscal year 2018-2019, exceeding 6% assumed rate, Treasury to lower assumed rate moving forward to 5.5%

Harrisburg, PA - Pennsylvania Treasurer Joe Torsella announced today that the PA 529 College and Career Savings Program Guaranteed Savings Plan (GSP) earned an annual return rate of 6.45%, net of fees, in fiscal year 2018-2019, exceeding its assumed actuarial return rate of 6%.

“Every dollar saved in the PA 529 College and Career Savings Program represents the education and training of Pennsylvania’s future workforce. Today’s announcement that Treasury beat this target lets families using the GSP know that their savings are being managed with care. Treasury beat its target benchmark while spending just over $3 million in Wall Street fees, a fraction of what many institutional investors spent. I take pride in the investment strategy that Treasury has adopted, which allows us keep costs low and maintain the good health of the GSP.”

Pennsylvania Treasurer, Joe Torsella

Treasury will lower the GSP’s long-term assumed rate of return to 5.5%. The GSP is currently funded at 127%, and the rate reduction will allow the GSP to allocate more assets to lower risk investments, and manage the plan prudently. These allocation changes will help maintain the overall health of the plan’s portfolio.

“To ensure the best results for PA 529 GSP account owners, it is important that Treasury works to re-evaluate the health of the plan. Lowering the assumed rate of return is a prudent decision to assure the GSP will continue to thrive and provide funds for Pennsylvania’s next generation, no matter what path they choose to further their education.”

Pennsylvania Treasurer, Joe Torsella

The PA 529 College and Career Savings Program gives families the tools they need to help save for future education expenses. The Program offers tax benefits for account owners. Contributions to PA 529 plans are deductible from Pennsylvania state income taxes and accounts are exempt from state inheritance tax. Assets in a PA 529 do not count against families when determining state financial aid eligibility. PA 529 accounts can be used at most institutions across the country, whether it be a trade school, community college, or 4-year university.

The PA 529 GSP is a lower-risk investment option which helps families save for tomorrow’s tuition at today’s plan rates, with returns based on college tuition increases. The PA 529 College and Career Savings Program also offers the Investment Plan (IP) which gives account owners 17 investment options with varying levels of risk. Returns for IP accounts are based on market performance.

Pennsylvania families currently have $5.2 billion in assets invested in PA 529 College and Career Savings Program plans. In the program’s more than 25 years, it has paid out more than $962.1 million for qualified education expenses.

For more information about the PA 529 College and Career Savings Program visit and follow all of the department’s news on Facebook and Twitter.

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