The Markets May 22, 2009

529s Shed 12.4% of Assets in Q408

The combined assets of all Section 529 college savings plans fell 12.4% in the fourth quarter to $104.9 billion.
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At the end of December 2008, prepaid plans accounted for $15.6 billion, while savings plans held another $89.4 billion, according to data gathered by the Investment Company Institute (ICI).

The number of Section 529 plan accounts increased 1.3% to about 11.2 million in the fourth quarter of 2008. There were 2.3 million prepaid plan accounts and 8.9 million savings plan accounts. The average 529 savings plan account size was about $10,000 in December 2008.

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The largest such program nationally was the Virginia Savings Plan, which, as of December 2008, had 1.89 million accounts and $19.7 billion in assets, according to the data.

Meanwhile, the Florida Prepaid program had 1.3 million accounts and $7.2 billion in total assets.

More information and state-by-state data is available here.

The Markets May 22, 2009

Brandeis Suspends Plan Match for a Year

Brandeis University announced plans to suspend its retirement plan match for faculty and staff starting in July because of the faltering economy.
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Quoting an e-mail from Brandeis President Jehuda Reinharz sent to faculty and staff members, the New York Times reported that the university is suspending the match from July 1 through June 30. The suspension will cover $7.4 million of the university’s projected $8.9 million deficit.

Peter B. French, the executive vice president and chief operating officer at Waltham, Massachusetts-based Brandeis, called the decision “the most equitable and least bad of the options” the university had been considering, adding, “I am quite confident that you will soon see more universities take the same action,” the Times reported.

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According to the Times, Brandeis officials said they had concluded that a temporary freeze on retirement contributions would be fairer, and do less harm to the university’s mission and future, than layoffs or across-the-board pay cuts, which some other colleges have undertaken.

The Times quoted Chad Peterson, a spokesman for TIAA-CREF as saying that so far this year 15 higher education institutions and other nonprofits had suspended their retirement plan contributions. The University of Miami said earlier this year that it was considering suspending retirement contributions as part of its strategy for dealing with the economic crisis, but then decided not to do so, at least in the coming fiscal year.

A number of colleges and universities have trimmed the percentage of retirement contributions they would match; Ithaca College, for example, reduced the percentage to 8% from 8.75%.

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