NU Online News Service, July 14, 2003, 7:55 p.m. EDT – The Hartford Financial Services Group Inc., Hartford, is marketing a new, multi-manager 529 college savings plan, the Leaders SMART529 plan, for the West Virginia College Prepaid Tuition and Savings Program.
The new West Virginia 529 plan offers one stable-value fund and 15 variable funds. The fund managers are AIM Investments, American Funds, Franklin Templeton Investments, INVESCO Institutional (N.A.) Inc. and MFS Investments.
Investors who want professionals to design their portfolios can choose from a menu of eight pre-selected portfolios, Hartford says.
Hartford also has worked with West Virginia to develop two other 529 plans, the SMART529 and Cornerstone SMART529 plans. The older plans are based entirely on pre-selected investment portfolios.
Section 529 of the Internal Revenue Code gives each state the authority to set up its own 529 college savings plan programs. The code exempts taxpayers from paying federal income taxes on either contributions to or normal distributions from the plans. States can offer breaks on state income taxes to state residents who participate in their plans.
Once a state sets up a 529 program, it can open the program to taxpayers throughout the United States, but the breaks on state income taxes are available only to residents of the sponsoring state.