Michigan Education Savings Program's 2014 performance ranked third in the nation

LANSING – The Michigan Education Savings Program (MESP) produced the third-best investment performance among all direct-sold 529 college savings plans nationwide in 2014, according to SavingForCollege.com.

MESP also achieved the eighth-best three-year performance and seventh-ranked five-year performance, the website determined.

“While it’s always gratifying to stack up well against your peers, the ultimate satisfaction comes from knowing that the plan’s investment performance benefited thousands of families who trust in the plan to help them save for college,” state Treasurer Kevin Clinton said.

SavingForCollege.com is an independent company that aims to help consumers and professional advisers better understand the challenge of paying higher education costs. It describes its rankings as potential resources for investors when selecting which 529 plans are right for them.

The 2014 rankings were based on evaluations of 54 plans. Forty-nine plans were ranked for three-year performance, and the five-year rankings consisted of 42 plans. Direct-sold 529 plans (named after Section 529 of the Internal Revenue Code, which created these types of savings plans) are those that investors can enroll in without using a broker.

Robin Lott, MESP executive director, noted that the SavingforCollege.com rankings represent the second time the plan has received national recognition in recent months. In Morningstar Inc.’s 2014 Analyst Ratings, MESP was ranked among the top eight 529 college savings in the nation and was identified as likely to outperform its peers over the long term.

“The Department of Treasury certainly takes pride in the third-party validation of MESP’s performance, and we hope Michigan residents will consider taking advantage of this important program as well,” Lott said.

SavingForCollege.com prepares its rankings by comparing a subset of portfolios from each 529 savings plan. It selects portfolios based on their mix of stocks, bonds and money market funds, which allows for an apples-to-apples comparison in seven asset-allocation categories ranging from 100 percent equity to 100 percent short-term instruments. The plan’s overall ranking is determined by the average of its percentile ranking in the seven categories.

The full rankings are available here: http://www.savingforcollege.com/articles/2014-1-year-top-performing-direct-plans-q4-331.

TIAA-CREF Tuition Financing Inc. notes that past performance is no guarantee of future results.

MESP is administered by the Michigan Department of Treasury, which chose TIAA-CREF Tuition Financing Inc. to manage the plan in November 2000. Since then, MESP has helped more than 200,000 account holders invest more than $4 billion toward college. TIAA-CREF Tuition Financing Inc. is one of the nation’s largest 529 program managers and currently manages 11 state programs, including Michigan’s.

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 any earnings if account proceeds are used to pay for qualified expenses. MESP can be used at any eligible college, university or trade school in the nation for a variety of qualified expenses, including tuition, mandatory equipment, fees, certain room and board costs and books. 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