SOURCE: The Ohio Tuition Trust Authority

The Ohio Tuition Trust Authority

October 16, 2012 13:37 ET

Ohio's 529 Plan Honored by Morningstar

COLUMBUS, OH--(Marketwire - Oct 16, 2012) - For the ninth straight year, Ohio's CollegeAdvantage 529 direct plan has received high honors from Morningstar, Inc. In awarding CollegeAdvantage a Silver rating, Morningstar, a leading provider of independent investment research of 529 college savings plans, highlighted Ohio's mix of managers and investment styles as a nice variety of options for college savers at a fair price.

"Once again, Morningstar has recognized Ohio's plan as a solid value for Ohioans who are saving and planning for their children's future college education. Our diverse variety of investment options, program flexibility and low cost make CollegeAdvantage the premier college savings program it is today," said Paul Paeglis, Executive Director of the Ohio Tuition Trust Authority.

In the past, 529 plans were rated based on the quality of the portfolio of investments options, investment options' performance, skill of the options' managers, stewardship practices of the 529 plan's program manager and costs associated with the plan. Plans received a rating of Top, Above Average, Average, Below Average or Bottom. This year Morningstar used a Five Pillar system, similar to the way it ranks mutual funds.

  • People: Are the managers and researcher directing the plan's investments skilled and well-supported?
  • Process: Are the age-based options based on solid research and implanted well? Are the strategies sensible and past successes likely to be repeated?
  • Parent: Is the program manager a good caretaker of college saver's capital? Is the state managing the plan professionally?
  • Performance: Has the plan delivered strong risk-adjusted performance, and will it continue?
  • Price: Are the investment options a good value, and do state tax benefits defray costs?

The new rating system groups 529 plans as Gold, Silver, Bronze, Neutral or Negative. CollegeAdvantage's Silver rating, according to Morningstar, indicates a plan with many industry best practices.

Morningstar reviewed a total of 64 college savings plans, with 27 plans rated as likely to outperform their peers on a risk-adjusted basis. Of those 27 plans, four were rated as Gold, four were rated as Silver and 19 were rated as Bronze. Over half of all plans (33), including Ohio's BlackRock CollegeAdvantage 529 advisor plan, were given a Neutral rating. College savers who choose a Neutral-rated plan should expect market-like returns, which is a reasonable outcome according to Morningstar. The BlackRock plan is available exclusively through financial advisors for families looking for professional investment advice and service.

The CollegeAdvantage direct plan offers a wide variety of investment options managed by The Vanguard Group, Fifth Third Bank, PIMCO, OppenheimerFunds and GE Asset Management. CollegeAdvantage provides state and federal tax advantages to help families save. Ohioans who enroll in and contribute to CollegeAdvantage can take advantage of an annual Ohio income tax deduction of up to $2,000 per beneficiary in contributions. Withdrawals used for qualified higher education expenses are exempt from both federal and Ohio income tax. CollegeAdvantage funds can be used to cover tuition, room and board, books and other college expenses at any accredited college in the country.

Families can open a CollegeAdvantage direct plan by going to www.collegeadvantage.com or by calling 1-800-AFFORD-IT (233-6734) and requesting an enrollment kit. For more information about CollegeAdvantage or the Ohio Tuition Trust Authority, please visit www.collegeadvantage.com, become a fan of CollegeAdvantage on Facebook or follow @Ohio529Plan on Twitter.

About the Ohio Tuition Trust Authority
The Ohio Tuition Trust Authority is a state agency within the office of the Chancellor of the Ohio Board of Regents and was created by the Ohio General Assembly in 1989. The Tuition Trust offers the CollegeAdvantage 529 Savings Plan to provide families with a tax-advantaged way to save for college. The CollegeAdvantage program has over $7 billion in total assets as of September 30, 2012.

Contact Information

  • Contact:
    Judy Cunningham
    PR Manager
    Ohio Tuition Trust Authority
    614-752-9350
    Email Contact