Treasurer hopefuls plan new initiatives for savings accounts.
Despite accolades for Missouri Saving for Tuition, or MO$T, some state treasurer candidates aren’t satisfied with the 5-year-old program’s performance and want to make changes. MO$T is a state program that manages savings accounts for college education.
“Most funds under MO$T are rated with four stars,” said Will Pundmann, who is running for the Republican nomination and is a former employee of TIAA-CREF, a financial service provider. “I intend to get five-star ratings and improve returns while lowering financial risk by evaluating all the management alternatives.”
Jason Klumb, running for the Democratic nomination, wants to bring the private sector into the program. Klumb proposes that private institutions offer vouchers worth $25 to newly adopted and newborn children in the state. The voucher can be used to open a MO$T savings account.
“The current program allows families to contribute to savings, but my idea gives parents their first savings installment. This gets people in the habit of saving and it’s an incentive to open an account, “ Klumb said.
The treasurer’s office has 71,000 accounts — called 529 college savings plans — set up under MO$T. Yet this figure might be inflating the number of students benefiting from MO$T. A young person saving for college might have multiple accounts set up in his or her name by family members and relatives.
Under Missouri’s college savings program, anyone can deposit up to $8,000 per year on behalf of a designated beneficiary who will use the money for qualified higher education expenses at eligible schools in Missouri or throughout the United States. The deposit amount is deductible from Missouri state taxable income. Investment earnings and withdrawals for education expenses are both exempt from federal and state taxes.
Deputy Treasurer Chuck Miller said he doesn’t know how many individuals have MO$T accounts.
Anita Yeckel, running for the Republican nomination, said that any incentive to get young people into college is useful.
“We need 50 percent more college graduates for the next 10 years to make Missouri competitive in the job market,” Yeckel said.
Miller said MO$T is one of the top 529 plans in the country.
“MO$T has been ranked one of the five best college savings programs in the nation by Money Magazine, USA Today and MSNBC,” Miller said.
TIAA-CREF Tuition Financing, Inc., provides investment advisory services and manages all of the investments under MO$T. The program is up for bid for a new manager in 2005.