PFPC Inc. has captured business for five additional 529 college savings plans: North Carolina, Oregon, Wisconsin, South Dakota and Montana. That roster adds to the half-dozen plans the Wilmington, Del.-based firm already services.
Collectively, 167,000 shareholders have only $900 million in assets housed within those plans, averaging to less than $5,500 per shareholder. Nevertheless, PFPC cited a study that estimates growth in total 529 assets to $51 billion by 2006.
Because of modest account sizes and complex rules governing taxation and withdrawals, administration of the accounts can be onerous to many of the plan administrators, who prefer to focus on distribution.
Michael DeNofrio, an executive VP of PFPC shareholder services and transfer agency, likened the 529 plan market today to the 401(k) in the early 90s. "These college savings plans today are similar to 401(k) retirement plans a decade ago - an innovative and useful investment product that is taking off," he said in a statement.