Finance and Administration Cabinet
The Kentucky Education Savings Plan Trust
FRANKFORT, Ky. – The Kentucky Higher Education Assistance Authority (KHEAA) and TIAA-CREF Tuition Financing, Inc. (TFI) are announcing new enhancements to the Kentucky Education Savings Plan Trust (KESPT) which includes an expanded investment portfolio, a new fee structure and additional website features.
Effective September 2, 2008, KESPT, Kentucky’s official 529 college savings plan, will add two new investment options for a total of five to choose from. Account owners will be able to diversify their current portfolios among the two new options—the Active Equity Option and the Fixed-Income Option—as well as the existing Managed Allocation Option, 100% Equity Option and Guaranteed Option.
“We are pleased to provide a stronger, more competitive plan for Kentucky families,” said Edward J. Cunningham, Executive Director/CEO of KHEAA. “It’s important for us to provide a smart and flexible way for families to help save money so their children can afford a college education.”
The Active Equity Option is an aggressive option which mainly invests in equity mutual funds that seek capital appreciation and a favorable long-term return. The Fixed-Income Option takes a more moderate approach by using a combination of mutual funds that invest in conventional and inflation-linked bonds, seeking to preserve capital and provide a moderate rate of return.
“With these new options added to KESPT, our account owners will be able to better diversify their portfolio based on their personal investment strategy, risk levels and economic conditions,” said Craig Parkin, KESPT Program Director. “Also, portfolio changes can now be made online with our new enhanced website feature which allows account owners with secure access to transfer funds among their investment options.” Other website changes include enhanced security features for account owners, an event calendar and a soon-to-be launched web presentation explaining the features and benefits of the plan.
KESPT also has a new fee structure and has lowered the annual asset management fee on the Managed Allocation Option from .80 percent to .70 percent. The range for the choice of investment options will vary from .70 to .91 percent depending on the investment option. The Guaranteed Option will continue to be offered with no program manager fee. KESPT continues to be a low-cost option and does not apply broker or applications fees.