NU Online News Service, Aug. 2, 2:15 p.m. – Pacific Life Insurance Company, Newport Beach, Calif., is now selling the Pacific Funds 529 College Savings Plan, a new Section 529 college savings plan, through registered representatives.
Section 529 of the federal Internal Revenue Code lets each state set up its own college savings program. Participants who follow the program rules carefully may be able to avoid ever having to pay federal income taxes on contributions or withdrawals.
U.S. residents who participate in programs set up by their own states may also be able to get out of paying state income taxes, but residents who participate in programs set up by other states can still take advantage of the federal income tax breaks.
Pacific Life established a relationship with the Montana 529 program, the Montana Family Education Savings Program, on Wednesday, by acquiring College Savings Bank, Princeton, N.J.
College Savings Bank has a contract to help run the Montana college savings program.
The new Pacific Life program based on the Montana program has a maximum contribution limit of $187,000 and lets account owners choose from a menu of 14 investment funds, Pacific Life says.
Parents and grandparents can start accounts with lump-sum contributions or monthly payments of as little as $50 per month, Pacific Life says.