The State of Rhode Island is overhauling its 529 college savings plan managed by Alliance as a result of the money managers market-timing scandal
The State of Rhode Island has taken steps to rework the framework of its 529 college savings plan managed by Alliance Capital Management as a result of the mutual fund providers implication in the widespread market-timing scandals, reports Knight Ridder/Tribune Business News.
Paul Taverse, general treasurer of Rhode Islands Investment Commission, confirmed that a number of changes are underway but declined to provide details except to say that the state will have the ability to cancel the contract if Alliance should get into legal trouble again. Alliance manages the states $4.5 billion college savings plan, dubbed the CollegeBoundfund, and JP Morgan Fleming manages a smaller 529 plan also offered through the state.
Last year, as part of its settlement with securities regulators, Alliance conceded to pay $250 million in fines and reduce its fees charged to shareholders by $350 million. Travers said the pending changes in the states plan managed by Alliance are directly related to its involvement in the market-timing scandals.