NU Online News Service, Sept. 3, 2:05 p.m. – MetLife Inc., New York, is helping North Carolina add a guaranteed fund option to its National College Savings Program.
North Carolina has organized the program under Section 529 of the Internal Revenue Code, which lets parents and other 529 plan participants deduct contributions from their taxable income.
The new Protected Stock Fund requires contributors to start by contributing $1,000 for at least five years. The fund will invest the principal.
MetLife will guarantee the principal, plus the greater of 3% annualized interest or 70% of the “price return” of the S&P 500 Index at the end of the five-year period.
The price return is the return of the index without dividends.
MetLife will make its guarantee to the National College Savings Program, which will pass the returns on to the plan participants, MetLife says.
Once the guarantee period expires, participants can reinvest in the Protected Stock Fund, put the assets in another North Carolina savings fund or withdraw the assets to pay for college expenses.