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Daily Court Reporter - News Ohio 529 plan celebrates 5-Cap Rating

 

Ohio 529 plan celebrates 5-Cap Rating

Families who want to research 529 college saving plans usually visit Savingforcollege.com — an industry-trusted informational website, which provides detailed analysis and articles on 529 plans, financial aid, and scholarships, as well as tools to estimate college expenses.

Savingforcollege.com also ranks the nation’s 529 programs based on how well they service both in-state and out-of-state residents with its 5-Cap Rating rankings. Ohio’s Direct 529 Plan, CollegeAdvantage, has earned the top 5-Cap Rating for both in-state and out-of-state residents. This makes Ohio 529 one of three programs nationwide to achieve this honor for both in-state and out-of-state residents.

In order to achieve the top 5-Cap Rating, a 529 plan must “offer outstanding flexibility, attractive investments, and additional economic benefits (such as generous state tax incentives) that for some people, at least, will provide a substantial boost to their savings. There are few, if any, weaknesses noted in the program.”

The rating is based on five criteria:

The performance of the 529 plan,

The costs of running the college-savings plan including expense ratios, administration and managerial fees,

Special features such as a spectrum of age-based and risk-based portfolios as well as FDIC-insured options, participation in programs like Upromise and Ugift, and contribution restrictions,

Reliability signals such as plan disclosure statements, the ease of making account changes, and the caliber of outside program managers,

Extra advantages like tax benefits for any account owner as well as additional tax breaks for state residents.

SavingForCollege.com also recently analyzed the long-term investment performance of the nation’s 529 plans and ranked them. For the third quarter of 2018, CollegeAdvantage Direct 529 Plan ranked first in the nation for five-year performance and eighth across the nation for the best performance in three-year category.

Other honors for Ohio’s 529 Plan

Morningstar, a trusted investment research and management company, reviews the nation’s 529 college savings programs annually. Once the analysis is complete, Morningstar then complies a ranking of the 529 plans in a report typically released each October.

Ohio’s 529 Plan is happy to announce that the CollegeAdvantage Direct 529 Plan retained its silver rating. In addition, BlackRock CollegeAdvantage, Ohio’s Advisor 529 Plan retained its bronze ranking. This makes Ohio one of six states that have both their Direct and Advisor 529 Plans placed ranked as medal class investment options by Morningstar. The high ranking for both CollegeAdvantage 529 Plans highlights the strength of these two college savings plans as well as the industry’s regard for Ohio’s 529 Plan as one of the best in the nation.

According to Leo Acheson, an analysist for Morningstar, “Ohio's 529 CollegeAdvantage 529 Savings Plan appeals to residents and nonresidents alike, thanks to compelling investment options and below-average fees. In 2018, Ohio doubled its tax deduction to $4,000 for single and joint filers, further improving the draw for Ohioans. The plan also offers a wide variety of investment choices, which may appeal to out-of-state college savers … The plan retains its Morningstar Analyst Rating of Silver.”

Other honors include a Kiplinger report, which recognizes Ohio’s 529 Plan as having best age-based portfolio for conservative investors. Kiplinger drew special attention to two of Ohio’s 529 Plan individual investment options: Vanguard Wellington and Vanguard High-Yield Corporate.

Additionally, Business Insider ranked CollegeAdvantage as the third best college savings plan in the nation. Bezinga, a website that offers financial insight, has named Ohio’s 529 Plan, CollegeAdvantage, as best for performance of the nation’s college savings plans.

Finally, money expert and New York Times best-selling author Clark Howard has placed Ohio’s 529 Plan on his Dean’s List as one of the very best 529 plans nationwide. Only 529 plans that have management fees less than 0.20% annually were named to the Dean’s List.

What are some of the reasons that Ohio’s 529 Plan ranks so well? CollegeAdvantage helps families across the nation save money for their children’s future college costs with tax-advantaged benefits including tax-free earnings and tax-free withdrawals when requested to cover qualified higher education expenses. Additionally, if CollegeAdvantage account owner is an Ohio resident, then they can deduct 529 contributions from their Ohio taxable income, up to $4,000 per year, per beneficiary, with unlimited carry forward. This means that $4,000 per year is not a contribution cap. The taxpayer can continue to subtract $4,000 per year, per beneficiary, from their Ohio taxable income until all the 529 contributions have been deducted.

To help you build a 529 plan to best fit your family’s needs, Ohio 529 Plan offers calculators and tools, which include a college savings planner, cost of waiting tool, tax benefit tool, and a risk tolerance questionnaire.

Ready to start with Ohio’s 529 Plan? It’s easy to open an account here. Already have an account and would like to make modifications? Log in to a 529 account to update information, perform account maintenance, or automate your deposits. Someday your child is going to college. Someday starts today with Ohio’s 529 Plan, CollegeAdvantage.

About the Ohio Tuition Trust

Established in 1989, the Ohio Tuition Trust Authority is a state agency within the Ohio Department of Higher Education. The Ohio Tuition Trust Authority sponsors and administers CollegeAdvantage, Ohio's 529 college savings program.

Ohio’s CollegeAdvantage program provides families across the nation flexible options and educational resources to invest in our trusted tax-advantaged 529 plans for education expenses after high school.

An 11-member board oversees the investments of the Ohio Tuition Trust Authority. The Governor of the State of Ohio appoints six members, with the advice and consent of the senate, who have significant experience in finance, accounting, or investment management.

The Speaker of the House of Representatives of the State of Ohio and the President of the Senate of the State of Ohio each appoint one member of the respective legislative body from each political party.

The Chancellor of the Ohio Department of Higher Education also serves as an ex-officio, voting member of the board.

Date Published: February 15, 2019

 

Ohio Tuition Trust Authority

 

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