State Treasurers Discuss 529 Disclosure

June 29, 2004 (—A group of five state treasurers met Tuesday with officials to discuss implementing comprehensive disclosure principles for Section 529 college savings plans, a news release said.

The delegation of state treasurers featured Tim Berry of Indiana (President of the National Association of State Treasurers or NAST), Mike Ablowich ofNew Hampshire, Dan Ebersole of Georgia, Randall Edwards ofOregon, and Jay Rising ofMichigan. The group met with with Securities and Exchange Commission (SEC) Chairman William Donaldson, the Chair of the Municipal Securities Rulemaking Board (MSRB) and Greg Jenner, Acting Assistant Secretary for Tax Policy, U.S. Department of Treasury

Diana Cantor, Chair of the College Savings Plans Network was also at the meeting, according to the news release.

The state treasurers gave agency officials clarity on Section 529 plans, asserting that:

  • 529 plans are developed by states who have a vested interest in trying to help those who may not be able to take advantage of tax-advantaged programs for college savings through other venues.  
  • 529 plans have suffered increased scrutiny of fee disclosure and investment suitability questions as a result of the scandal in the mutual fund industry, which is unfair say the state treasurers, because 529 plans offer low-cost direct-sold options to state residents.
  • The CSPN, an affiliate of NAST, created disclosure principles that will standardize the presentation of consumer-oriented information regarding the programs. The treasurers think this would help aid users compare state 529 plans.   The disclosure includes specifying the release of information about fees and costs, information about investment options and managers, investment performance, federal and state tax considerations, risk factors, and limitations or penalties relative to transfers or non-qualified distributions.