Fidelity Investments has reported that assets held in its 529 college savings plan business increased 22%, to $2.4 billion, during the 12 months from September 2006 through the end of August of this year.
During this period, Fidelity opened more than 100,000 529 plan accounts.
Executives at the Boston investment management company attributed the growth to the passage of the Pension Protection Act. This law, which went into effect last year, made permanent the provision that allows account holders take tax-free distributions for qualified education expenses.
Industrywide, 529 college plan assets rose 59%, to $13.5 billion, during the 12 months, according to Fidelity. Fidelity manages 529 programs in New Hampshire, Massachusetts, Delaware, Arizona and California.