The MarketsAugust 20, 2009

New Jersey 529 Plan Lowers Fees, Adds Conservative Funds

<p>New Jersey's Higher Education Student Assistance Authority reached an agreement to reduce administrative fees and offer more conservative investments for the NJBEST 529 college savings plan.</p>

Reported by Rebecca Moore

The Star-Ledger in Newark reported that by December, the program’s annual management fee, which pays for the services of Franklin Templeton Investments, will be reduced by 50%, saving $800,000. In addition, the plan will offer two new age-based investment options: Conservative Age-Based Portfolios and Moderate Age-Based Portfolios, the authority said.

The existing age-based portfolios will be renamed Growth Age-Based Portfolios, according to the news report.

Franklin Templeton agreed to absorb nearly $200,000 in costs to implement the changes.

The plan has been criticized by Morningstar for charging high fees and for having age-based portfolios that are too risky for students close to attending college (see “Ohio 529 Plans: Both the Best and the Worse”).