During a recent board meeting that was held virtually, changes were made to the MOST 529 program which will save Missourians millions of dollars in program management fees.
According to Missouri State Treasurer Scott Fitzpatrick, board members voted to approve a contract amendment with program manager Ascensus. The contract amendment extends the contract period while guaranteeing program management fee reductions—taking the fees from the current level of 19 Basis Points (bp) to 16bp immediately, and 14bp over five years, a reduction of over 26%. This reduction is expected to save plan participants over $8 million.
The amendment also guarantees that any subsequent decreases in fees on specific investment options over time will be passed on to plan participants instead of being retained as part of the program management fee.
“After nearly a year of negotiations, I am pleased to announce having reached this agreement,” Treasurer Fitzpatrick said. “My team and I worked hard to improve the MOST 529 Education plan in a way that saves Missourians money, making it even more competitive than it was in the 529 space. This agreement means that plan participants will keep more of their investment earnings in their 529 account, making it a little bit easier for Missourians to save for education.”
MOST, Missouri’s 529 Education Plan, is a tax-advantaged savings plan for education expenses. Money in MOST accounts can be used to pay for K-12 tuition, and trade, college, and graduate school tuition and expenses. Contributions are eligible for state tax deductions, which can save families up to $864 a year, and assets in MOST 529 accounts grow tax free.
The contract amendment will go into effect July 1. The current contract was signed in 2015 by former Treasurer Clint Zweifel. Today’s board meeting was held virtually via Zoom.
More information about MOST 529 can be found at MissouriMost.org.