Fee reduction provides more than $178,000 in savings across PA 529 IP accounts
Harrisburg, PA - Pennsylvania Treasurer Joe Torsella announced today another fee reduction for the PA 529 College and Career Savings Program Investment Plan (IP). The IP has some of the lowest fees when compared to similar 529 plans in other states.
“Many families are facing more uncertainties right now than ever before, including the astronomical and ever-rising cost of higher education. This latest fee reduction demonstrates Treasury’s commitment to making sure Pennsylvania families have access to the best and most affordable higher education investment options. Lowering fees is just one way we at Treasury can help protect families’ hard-earned dollars they commit to their children’s futures.”
Pennsylvania State Treasurer, Joe Torsella
PA 529 IP account owners will see a fee drop of one-half a basis point (0.005%) that will result in more than $178,000 in savings across the IP. Treasury’s ability to reduce fees for PA 529 IP account owners is driven by the continued increase in contributions by Pennsylvania families into the IP as well as overall growth in assets. Pennsylvania families currently have more than $3.5 billion dollars invested in the IP for future education expenses.
The IP offers 17 investment options through Vanguard, which allows families to choose the level of risk they are most comfortable with to help them meet their savings goals. IP returns are dependent upon market performance. This year, the IP was received a rare Morningstar Silver RatingTM as part of Morningstar’s review of the Top 529 College Savings Plans of 2020. This is the IP’s second upgrade in two years after last year’s Morningstar Bronze RatingTM. Nationwide, only fourteen plans rated as Silver (11) or Gold (3).
The PA 529 College and Career Savings Program also offers the Guaranteed Savings Plan (GSP) — which helps families save for future tuition rates at today’s prices. Families can start investing in higher education savings with PA 529 plans with as little as $10 and make contributions at any time.
Pennsylvania families currently have $5.6 billion in assets invested in the IP and GSP plans combined.
The PA 529 College and Career Savings Program has paid out more than $4.1 billion for qualified postsecondary education expenses over the plan’s more than 25 years. PA 529 accounts offer tax benefits — contributions are deductible from PA state income taxes and account balances are exempt from state inheritance tax. PA 529 balances do not count against students and their families when determining state financial aid eligibility.
Treasury also sponsors the Keystone Scholars Program and the PA ABLE Program. Keystone Scholars provides Pennsylvania babies born after December 31, 2018 with a $100 starter deposit to be used for higher education expenses. PA ABLE provides a way for individuals with qualified disabilities and their families and friends to save for disability-related expenses in a tax-free way, while maintaining government benefits.