NU Online News Service, July 24, 2003, 2:36 p.m. EDT – The Hartford Financial Services Group Inc., Hartford, has started marketing a new, multi-manager 529 college savings plan, the Cornerstone SMART529 plan, through Edward Jones Inc., St. Louis, a retail brokerage with 8,000 investment representatives.
The West Virginia College Prepaid Tuition and Savings Program is the program’s official parent.
The Cornerstone 529 plan offers 22 investment fund options. The fund managers are The American Funds Group, Federated Investment Management Company, Franklin Templeton Investments, Goldman Sachs & Company, Hartford Investment Management Company, INVESCO Institutional (N.A.) Inc., Lord Abbett, MFS Investments, Putnam Investments, Van Kampen Investments and Wellington Management Company L.L.P.
Investors who want professionals to design their portfolios can choose from a menu of eight off-the-shelf portfolios, Hartford says.
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 usually available only to residents of the sponsoring state.