Though still in the beginning stages of formation, 529 plans are getting a boost from those who administer them by a new industry group called the College Saving Foundation (CSF).

Formed by eight financial services firms, the intent of CSF is to "inform, educate and disseminate" 529 materials and trend data for consumers and advisers.

The founding members are:

  • AIM Investments
  • Fidelity Investments
  • Franklin Templeton
  • Manulife Financial
  • Merrill Lynch
  • Morgan Stanley
  • Strong Financial
  • T. Rowe Price

"We’re looking to form a group of people within the industry who really think college saving is important and want to focus on furthering those objectives," said Sarah Henriksen, director of education planning at Strong Capital Management and treasurer of the coalition. "All of the members of the CSF also participate in groups like the ICI or the SIA, but obviously there they’ve got so many different concerns related to financial services that 529s are not really a priority. What this hopes to accomplish is just a real focused effort on things helping the American families send their kids to college."

At Wednesday’s second board meeting, the group decided that two primary goals exist. One is government affairs, where the group will concentrate at the federal level to improve technical issues. Two examples Henricksen gave included clarifying final IRS regulations to make 529 plans administratively feasible for program managers and finding ways to help the states expand on up-front tax deductions for the plans.

The second priority is further developing the foundation as a definite source of information about the industry. CSF plans to gather trend statistics and demographic data through the states and plan administrators to get a sense of who is using 529 plans.

Estimated combined assets of 529 prepaid tuition plans and 529 college savings plans totaled $28 billion at the end of 2002, according to Financial Research Corp. Investors contributed more than $10 billion in new investments to 529 plans in 2002.

The group will meet quarterly.



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