Fee Reduction Announced for CollegeAdvantage Direct 529 Plan
COLUMBUS, Ohio, June 1, 2015 /PRNewswire/ -- Today, the Ohio Tuition Trust Authority announced that effective June 19, the program fee (OTTA Fee) for all CollegeAdvantage Direct Plan investment options will be reduced from 0.04% (4 basis points) to 0.02% (2 basis points). The reduced fee is a result of program growth and efficiencies realized through administrative service changes implemented in 2013.
The June 19 changes include an exchange of assets to improve five investment options to either more directly reflect a particular asset class or to lower account owner investment costs; the addition of a new investment option; and enhancements to the Ready-Made Age-Based and Ready-Made Risk-Based Portfolios.
"In November 2013, we reduced the OTTA fee from 0.15% to 0.04%. Today, due to our continued growth and commitment to program efficiencies, we are able to further reduce the fee that our account owners pay to OTTA for administration of the plan," said Paul Paeglis, executive director of the Ohio Tuition Trust Authority. "Families who want to save for college need to consider a 529 plan. For Ohioans, CollegeAdvantage 529 is the most tax-advantaged way to save, and we just made it even less expensive to do so."
In addition to the OTTA fee reduction, changes to the investment offerings will also further reduce the average fees of the Direct Plan. In total, this will result in a 13% decrease in the average expenses of the investment options in the CollegeAdvantage Direct 529 Savings Plan. The total average cost of investment options will decrease from 0.31% to 0.27%, which is about one-half of the 0.52% average cost of other direct-sold plans available, according to a fee survey completed by Strategic Insight, an independent firm that reports on the 529 industry.
Customers are being notified about the fee reduction and other investment options changes that will be effective June 19. Details about the upcoming changes are available at www.CollegeAdvantage.com/blog.
The OTTA fee will also be reduced from 0.04% to 0.02% as of July 1, 2015 in the CollegeAdvantage Advisor 529 Savings Plan offered by BlackRock.
About the Ohio Tuition Trust Authority/CollegeAdvantage: CollegeAdvantage is Ohio's 529 college savings program, offered and administered by the Ohio Tuition Trust Authority, a state agency under the Office of the Chancellor of the Ohio Board of Regents. Ohio is the fifth largest state sponsor of 529 plans in the country. CollegeAdvantage is offered as the CollegeAdvantage Direct 529 Savings Plan and the CollegeAdvantage Advisor 529 Saving Plan which is offered and marketed through BlackRock and sold through professional financial advisors. The CollegeAdvantage program, which offers families a tax-advantaged way to save for college, has more than $9.45 billion in assets under management and over 644,000 total accounts as of March 31, 2015. To learn more, visit www.CollegeAdvantage.com or see this "By the Numbers" Infographic or a history of CollegeAdvantage.
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SOURCE Ohio Tuition Trust Authority
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