The Markets February 15, 2012

Prepaid Tuition Plans Are 93% Funded

 

The College Savings Plans Network (CSPN) reported that as of the close of the most recent fiscal year, Section 529 prepaid tuition plans are, on average, approximately 93% funded.

 

 

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This is a slight increase over the past fiscal year, typically ending June 30, when the national average of funded prepaid 529 plans was 91%.  

This average is based on data aggregated by CSPN from 19 of 20 prepaid 529 tuition plans, including those that are both open and closed to new enrollments. According to CSPN, 11 prepaid tuition plans are currently open for new enrollments, and all are nearly fully funded at a national average of 97%. In total, $22.4 billion has been saved in more than 1.6 million prepaid tuition accounts administered by 20 states.  

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“This new data shows that prepaid tuition plans continue to be a solid choice for families with young children to save for college,” said Betty Lochner, director of Washington’s GET Program and vice chair of College Savings Plans Network. “On average, prepaid tuition plans have recovered well from the recession, and they’re continuing to absorb recent increases in college tuition. In fact, their 93% average funded status far exceeds the 76% average funded status that’s currently estimated for our country’s public pension funds.”  

CSPN releases proprietary data on 529 college savings plans semiannually. 

More information is available at http://www.CollegeSavings.org.

 

Products February 15, 2012

Putnam Added to ML Advisor Alliance

Putnam Investments has been added to the Merrill Lynch Advisor Alliance platform.
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Through this alliance, Putnam’s defined contribution plan products and services will be made available to Merrill Lynch financial advisers and their small- and middle-market clients, primarily those with $5 million to $50 million in defined contribution plan assets.

“We were looking for distribution leverage,” said Edmund F. Murphy III, head of Defined Contribution for Putnam Investments, to PLANADVISER. “Merrill Lynch has more than 5,000 advisers with at least one retirement plan [client] and several hundred that have retirement as a core focus of their practices.”

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The company was added to the platform last week and officially began taking proposals Thursday night. As of Wednesday morning, it had already received seven, Murphy noted. While Putnam has goals at the top level, it does not yet have a good sense of what the partnership will yield, he said. However, the company has expended its internal sales desk to support this effort.

Through Putnam’s participation in Advisor Alliance, Merrill Lynch advisers will have access to Putnam’s Lifetime Income Analysis Tool participant experience and plan-management tools for plan sponsors, including the proprietary Lifetime Income Score, communication and education programs, and a multi-manager investment menu. At the beginning, the service offering will be the same as that offered outside the Advisor Alliance network, Murphy said, though there might be opportunities to customize the product as time goes on.

Murphy said he sees this alliance as a true partnership between Merrill Lynch and Putnam. “Merrill Lynch will be a great source of input and insight for us as we continue to build out our platform,” he said.

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