Michigan Education Savings Program remains near top of Morningstar's annual 529 ratings

The Michigan Education Savings Program (MESP) was again a top performer in Morningstar Inc.’s annual ratings of 529 college-savings plans, retaining its “Silver” rating for the fourth consecutive year.

Of the 63 plans the independent investment research firm analyzed nationwide, MESP was one of only 11 to earn a Gold or Silver rating. Morningstar judges those plans as most likely to outperform their peers on a risk-adjusted basis over the long haul.

“It’s always gratifying to earn third-party validation that you’re among the best in the nation, especially from a firm as respected as Morningstar,” said Robin Lott, MESP administrator for the Michigan Department of Treasury. “Our account owners can take comfort that MESP is considered a top college-savings option.”

MESP, managed by TIAA-CREF Tuition Financing Inc. on behalf of the Michigan Department of Treasury, has earned a Silver rating from Morningstar each year since 2012. In this year’s ratings, four plans received Gold ratings and eight were rated Silver.

Morningstar says that it rates college-savings plans based on five key pillars:

· Process: Did the plan hire an experienced asset allocator to design a thoughtful, well-diversified glide path for the age-based portfolios? What suite of investment options is offered?

· People: What is Morningstar’s assessment of the underlying money managers’ talent, tenure, and resources?

· Parent: Is the program manager a good caretaker of college savers’ capital? Is the state managing the plan professionally?

· Performance: Have the plan’s options earned their keep with solid risk-adjusted returns over relevant time periods? How is the plan expected to perform going forward?

· Price: Are the investment options a good value?

The firm also takes into consideration any unique benefits that plans offer to college savers, including local tax breaks, grants and scholarships.

MESP, which is sold directly to families that are saving for college, offers nine investment options for account owners. The plan, which is marking its 15th anniversary in November, has more than 220,000 accounts with total assets exceeding $4 billion.

MESP is one of three Michigan Section 529 plans, named after the section of the Internal Revenue Code that allowed for their creation. Each plan offers Michigan taxpayers a state income tax deduction on contributions and potential tax-free growth on earnings if account proceeds are used to pay for qualified higher education expenses.

MESP can be used at any eligible college, university or trade school in the nation and some abroad for a variety of qualified higher education expenses, including tuition, fees, certain room and board costs, books, supplies and equipment required for enrollment.

More information about MESP is available at MIsaves.com or 877-861-6377.