Michigan Education Savings Program named one of nation's top college-savings plans by Morningstar

LANSING – The Michigan Education Savings Program (MESP) was a top performer in Morningstar Inc.’s 2014 Analyst Ratings, ranking among the top eight 529 college-savings in the nation and being identified as likely to outperform its peers over the long term.

MESP is one of only four plans nationwide to earn a Silver medal in the annual ratings released Tuesday by the independent investment research firm. Four plans also received Gold medal ratings, meaning MESP is one of the eight 529 plans throughout the country viewed most favorably by Morningstar analysts.

Michigan Treasurer Kevin Clinton hailed the recognition as good news for state residents and families who entrust their savings with MESP.

“Parents, grandparents and others can take pride and comfort in this third-party validation,” Treasurer Clinton said. “MESP has historically offered and been considered one of the nation’s best college-savings options.”

MESP is managed by TIAA Tuition Financing Inc. on behalf of the Michigan Department of Treasury.

Morningstar said its Analyst Ratings give investors saving for a child’s education a tool to help comprehensively assess a 529 plan. The firm analyzed 64 of the nation’s largest plans that together represent about 95 percent of the more than $214 billion in U.S. 529 plan assets as of Sept. 30.

To determine a plan’s rating, Morningstar analysts considered five factors: the plan’s strategy and investment process; the plan’s risk-adjusted performance; an assessment of the plan’s investment managers; the stewardship practices of the plan’s administration and parent firm; and whether the plan’s investment options are a good value proposition compared with its peers. Analysts then assigned forward-looking ratings of Gold, Silver, Bronze, Neutral or Negative to each plan.

Morningstar says plans that earned a Silver rating have notable advantages in comparison with other plans across several, but perhaps not all, of the five categories – strengths that give analysts a high level of conviction that the plan will help college savers meet their goals.

Morningstar noted that the 529 industry continues to grow as families seek to make ever-increasing college costs more affordable. Total U.S. 529 plan assets were up 18 percent as of Sept. 30 from a year earlier. The plans are named after Section 529 of the Internal Revenue Code, which created these types of savings programs.

The Morningstar Analyst Ratings represent the second recent top-10 finish for MESP in national rankings. Savingforcollege.com ranked MESP as producing the ninth-best performance among 529 plans nationwide during the three-year period ending June 30.

MESP has more than 200,000 accounts with total assets of nearly $4 billion. Detailed information on MESP’s fees and expenses and investment performance is available at MIsaves.com. TIAA-CREF Tuition Financing Inc. notes that past performance is no guarantee of future results.

MESP is one of three Michigan Section 529 plans, all of which offer 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. Limitations apply. See the MESP Disclosure Booklet for details.

To learn more about MESP, visit MIsaves.com or contact us at 877-861-6377.

Consider the investment objectives, risks, charges and expenses before investing in the Michigan Education Savings Program. Please visit www.misaves.com for a Disclosure Booklet containing this and other information. Read it carefully. Investments in the plan are neither insured nor guaranteed and there is the risk of investment loss.

Before investing in a 529 plan, you should consider whether the state you or your designated beneficiary reside in or have taxable income in has a 529 plan that offers favorable state income tax or other benefits that are only available if you invest in that state’s 529 plan.

The tax information contained herein is not intended to be used, and cannot be used, by any taxpayer for the purpose of avoiding tax penalties. Taxpayers should seek advice based on their own particular circumstances from an independent tax advisor. Non-qualified withdrawals are subject to federal and state taxes and the additional 10% federal penalty tax.

TIAA-CREF Tuition Financing, Inc., MESP Program Manager

Michigan Department of Treasury, Administrator