State's college savings plan exceeds $1B in assets

The plan was launched in November 1999 to provide a tax-advantaged way for families to save for higher education expenses. Since the plan’s investment management and program management were converted to Vanguard, Missouri-based American Century Investments and Upromise Investments Inc., in June 2006, assets have increased by 15 percent.

Other changes in 2006 were new investment choices – up to 18 from three – and lower costs. According to a news release from Steelman’s office, the expense ratio for most investment options is 0.62 percent.

Those changes, combined with federal legislation passed last summer that protects the tax benefits of 529 plans, are designed to encourage more families to save.

“I want every child in this state to have the opportunity to go to college,” Steelman said in a news release. “Through MOST, we are providing families in Missouri a great way to help their children realize their potential through higher education and are enabling them to save with low minimum contributions, easy-to-use age-based investment options, and online account access.”

Accounts can be established with as little as $25 per month, and there is no income limit for participation. Contributions to the accounts can come from family or friends.

Account owners who are Missouri taxpayers can individually deduct up to $8,000 per year, and married couples filing jointly who are each account owners can deduct up to $16,000 for contributions to a MOST account.

This story originally appeared in SBJ’s March 22 free e-news Daily Update. Click here to register.