College Savings Foundation Created To Promote 529 Plans

The College Savings Foundations goals include the promotion, protection and enhancement of 529 plans. The foundation wants to build a database that will include analysis and background information on all aspects of 529 plans, including prepaid tuition plans and other programs designed to help finance college tuition.

Eric Nottonson, co-founder of the foundation and vice president of college planning at Fidelity, says the group will serve as a voice for all program providers and managers, including insurers.

Although the foundation is still in its formative stages and does not yet have a legislative arm, one of the issues it will track is the permanence of the federal tax-free status of qualified 529 plan distributions. The concern is that the tax-free status might eventually expire.

"We think it will be the best thing for families to have the uncertainty removed," Nottonson says.

Getting all states to offer the same tax breaks will be another priority, he says.

Charles Toth, director of education savings at Merrill Lynch, one of the leaders in the creation of the industry foundation, says the birth of the foundation "signals the maturity of 529 plan development."

Toth will be the chair of the new foundations board and Nottonson will be the vice chair. Sarah Henriksen of Strong Financial will be the treasurer, and Bill Raynor of AIM Investments will be the secretary.

Reproduced from National Underwriter Edition, March 3, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.