State Street Corp.’s college savings unit has been chosen by Oregon to develop a multimanager 529 college savings platform.

Schoolhouse Capital has just announced that it will launch a 529 product in June through the Oregon 529 College Savings Network.

The Boston company said it wants to develop a "best of breed" solution similar to the one it created in New Mexico, where it has managed 529 plans since 2000. In January 2002 Schoolhouse began working with Prudential Financial, the Evergreen Investment Services unit of Wachovia Corp., and SunAmerica Capital Services to distribute the Arrive Education Savings Plan through the state of New Mexico. The product includes mutual funds from all four distribution partners.

Oregon offers 529 plans managed by Strong Financial Corp., MFS Investments and Franklin Templeton Investments. It is one of eight states with more than one 529 plan administrator.

To comply with state and IRS rules, Schoolhouse will manage across all of the plans.

"Looking at the market, there is a need for diversification," said Sandy Forcier, Schoolhouse's director of marketing. "They look at Schoolhouse, and they believe that we can bring something different to the table, not only in terms of bringing in additional plans but the flexibility going forward to bring in other programs and consolidating."

If, for example, an investor’s cumulative investments in three of the plans exceed Oregon's $250,000 limit, it would be up to Schoolhouse to notify the plan administrators.

Forcier said Schoolhouse would not directly compete with MFS, Strong or Franklin Templeton because it will sell its Oregon 529 plans through advisers while the other providers’ products are sold directly to investors.

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