Wisconsin Introduces Changes to 529 Plan

With the introduction of a new conservative investment alternative and a reduction of fees, the state hopes to make their plan more competitive with other national 529 plans.   

The addition, the Stable Value   Portfolio from Strong Capital Management, Inc.,the manager of EdVest, is slated for a December roll out. This addition is being added as a fixedinvestment option.

A fixed investment option is one that stays static throughout the life of the 529 plan, as opposed to an age-based option, which changes (becomes more conservative usually) the closer a child comes to college age.

The expense ratio has also been reduced.    Effective immediately, the new expenses will now range from 0.90%, for the soon-to-be-introducedStable Value Portfolio, to 1.15% forthe other investment options.

In addition, a reduction in the enrollment fee to $10 from $20 and an adjustment in the pricing of plans opened through a financial advisor (currently one-third of all EdVest plans) aims to make Wisconsin’s plan more competitive with other national plans.

These modifications are all in addition to changes implemented earlier this year, which extended tax deductions for contributions made by grandparents. Now, both parents and   grandparents can take a state income tax deduction up to $3,000 per year.