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Financial Planning > College Planning > 529 Plans

Saving in 529 Plans Continues to Rise

By Danielle Andrus

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Assets in 529 college savings plans increased slightly in the second quarter of 2013, according to data from Strategic Insight. Total assets topped $183 billion, a 1.8% increase over last quarter and a nearly 17% increase from last year’s second-quarter total.

“From an industry asset level perspective, 529 saving plans continue to reach year-over-year all-time highs,” according to Strategic Insight.

The company released a report Thursday highlighting second-quarter results for college savings plans. Inflows were estimated at nearly $3 billion, up from $2.5 billion for the same period last year. However, inflows have tapered off since their high of $3.3 billion last quarter.

Assets in prepaid plans topped $22 billion in the second quarter, down slightly from earlier this year. Compared to the second quarter of 2012, prepaid plans added $652 million in assets.

Looking at open plans only, assets increased 0.5% in the second quarter, and nearly 5% since last year. There are more than 1 million active accounts, Strategic Insight found, a 0.7% increase since the first quarter.

Out of 20 prepaid plans, 17 provided data for gross sales to assets ratios. Gross contributions were more than 2.5% of assets, according to the report. The ratio of contributions minus distributions to assets was over 1.2%.

Strategic Insight also named the 10 best 529 plans based on their second-quarter assets. The ranking is unchanged from last quarter.
Here are the top plans, listed by fund name and distributor:

  1. College America; American Funds
  2. New York’s CSP-Direct; Vanguard
  3. UNIQUE College Investing Plan; Fidelity
  4. The Vanguard 529 Savings Plan; Vanguard
  5. CollegeBoundfund; AllianceBernstein
  6. NextGen College Investing Program; Merrill Lynch
  7. Utah Educational Savings Plan; State of Utah
  8. ScholarShare College Savings Plan; TIAA-CREF
  9. U.Fund College Investing Plan; Fidelity
  10. BlackRock CollegeAdvantage 529 Plan; BlackRock

American Funds is the top administrator of 529 plans, despite only being offered in Virginia, according to Strategic Insight. In the second quarter, the company managed $39 billion in its College America fund, up 18.4% from last year.

Upromise Investments, which offers plans in 10 states, managed more than $37 billion in the second quarter, up more than 19% since last year. Together, American Funds and Upromise hold more than 40% of the market.

TIAA-CREF offers plans in 11 states, although Strategic Insight estimates it only holds about 9% of the market. The firm managed nearly $17 billion in the second quarter, up 15.5% from last year.

Fidelity managed more than $13 billion in plans in Arizona, Delaware, Massachusetts and New Hampshire. Assets increased nearly 13% since the second quarter of 2012.

Although it ranked only fifth, T. Rowe Price, which manages $8.6 billion in plans in Alaska and Maryland, added the most assets, increasing 19.3% since last year.

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