If you own a 529 plan, expect continued fee cuts from the PA Treasury

11 April 2024- Treasurer Stacy Garrity today announced that fees for PA 529 Investment Plan (IP) accounts have been reduced for the third time in less than a year. The lower fees went into effect for account owners last week.

“Cutting fees for the PA 529 Investment Plan helps children follow their dreams. Nearly 185,000 families are saving with the PA 529 IP and making it as affordable as possible is a huge priority for me. One reason Morningstar gave this plan a Gold Rating, ranking it as one of the top two plans in the country, is our commitment to making it as cost-effective as possible. I will never stop working for the benefit of PA 529 account owners.”
 Pennsylvania State Treasurer Stacy Garrity

Effective April 5, 2024, the operational support fee for PA 529 IP accounts decreased by 0.5 basis points (0.005 percent). This follows previous fee cuts of 1.25 basis points in July 2023 and 0.5 basis points in August 2023. Combined, these fee reductions will save PA 529 IP account owners nearly $262,000 over the next 12 months.

Treasurer Garrity approved the reduction in operational support fees in cooperation with Ascensus and Vanguard, Treasury’s partners in administering the PA 529 program.

The Morningstar Gold Rated PA 529 IP allows families to choose from a variety of investment options including Target Enrollment portfolios. Earnings for PA 529 IP accounts are tied to financial market performance. Morningstar recognized Treasury’s “[e]ffective and unrelenting advocacy on behalf of investors,” its “enhanced outreach and accessibility efforts,” and the reduction of plan fees, positioning the PA 529 IP as less expensive than “roughly 80% of competitors.”

PA 529 College and Career Savings Program accounts are designed to help Pennsylvania families steadily and strategically save for a wide variety of qualifying technical, collegiate, apprenticeship and K-12 educational expenses. Both the PA 529 IP and PA 529 Guaranteed Savings Plan (GSP) have significant state and federal tax advantages, and assets saved in PA 529 accounts do not affect eligibility for state financial aid.

The PA 529 GSP allows families to save at today’s tuition rates to meet tomorrow’s tuition costs. Account earnings are based on college tuition inflation rates, and families can choose the tuition credit rate they wish to save ranging from community colleges to Ivy League universities. Treasurer Garrity waived asset-based fees for the GSP in 2022 and again in 2023.

There are nearly 300,000 PA 529 accounts, including nearly 185,000 PA 529 IP accounts and more than 112,000 PA 529 GSP accounts. Across both plans, families have more than $7.5 billion saved for future education expenses such as tuition, fees, books, supplies, room and board, and more.

To learn more about saving with PA 529, visit pa529.com or call 800-440-4000.