New upgraded rating puts PA 529 Investment Plan in elite group of “Best in Class” 529 plans
Harrisburg, PA - Pennsylvania Treasurer Joe Torsella announced today that the PA 529 College and Career Savings Program Investment Plan (IP) has received a rare Morningstar Silver RatingTM as part of Morningstar’s review of the Top 529 College Savings Plans of 2020. This is the IP’s second upgrade in two years after last year’s Morningstar Bronze RatingTM. Nationwide, only fourteen plans rated as Silver (11) or Gold (3).
“PA 529 plans offer smart, simple and affordable postsecondary education savings options for Pennsylvanian families. I am so proud to announce this upgraded rating from Morningstar, which reflects the dedication and diligence of the Treasury team to continue to improve this important savings tool for Pennsylvanians. Our work does not stop here. We will continue to make every improvement possible to help more families save their hard earned money for their child’s future higher education goals. Each child’s success improves not only their own lives and the lives of their families, but the well-being of the whole Commonwealth”
Pennsylvania State Treasurer, Joe Torsella
Morningstar’s rating system ranks plans based on four pillars including Process, People, Parent, and Price. Morningstar recognized the IP’s thoughtful design and low fees. It also commended the plan’s diligent stewardship including its strong investment management and its ability to maintain checks and balances ensuring investment integrity. The IP recently reduced fees by one-half basis point (0.005%) and continues to have some of the lowest fees when compared to similar 529 plans in other states.
Morningstar also recognized and praised the PA 529’s addition of Keystone Scholars, the first legislated, universal at-birth children’s savings program in the nation. Keystone Scholars offers babies born in Pennsylvania, and those subsequently adopted, from 2019 onward with $100 starter deposits.
The IP provides Pennsylvania families with 17 different investment options through Vanguard, offering varying degrees of risk including three age-based portfolios. Returns for IP accounts are based on market performance. Pennsylvania families currently have more than $3.6 billion dollars invested in the IP for future education expenses. Along with the IP, the PA 529 College and Career Savings Program offers the Guaranteed Savings Plan (GSP). The GSP lets families save money for tomorrow’s tuition at today’s prices, with returns based on tuition inflation.
Both PA 529 plans offer tax benefits. Contributions are deductible from PA state income tax and balances are exempt from state inheritance tax. PA 529 assets are not counted when determining state financial aid. Families can start saving with IP or GSP plans with as little as $10 and can contribute at any time.