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Michigan Education Savings Plan Receives Top Honor in Morningstar's Annual 529 Ratings
Nov. 12, 2020
The Michigan Education Savings Program (MESP) received one of the top honors in Morningstar Inc.’s annual ratings of 529 college savings plans nationwide, earning the rare “Gold” rating.
Of the 61 plans the independent investment research firm analyzed nationwide, MESP was one of only three to earn a Gold rating. Morningstar judges those plans around four pillars: Process, People, Parent and Price.
"This is a great win for all Michiganders," said Diane Brewer, MESP administrator for the Michigan Department of Treasury. “It’s always gratifying to earn third-party validation that you're among the best in the nation, especially from a firm as respected as Morningstar. Our account owners can take comfort that MESP is considered a top college-savings option nationwide."
Across the four key pillars, Morningstar looked for the following in each of the 529 savings plans it evaluated: a well-researched asset-allocation approach; a robust process for selecting underlying investments; an appropriate set of options to meet investor needs; strong oversight from the state and investment manager; and low fees.
Gold-rated plans embody most or all these attributes.
Morningstar says the MESP Gold rating recognizes the state’s long track record of first-rate investment oversight, well-designed interface for portfolio management and very low fees.
MESP, managed by TIAA-CREF Tuition Financing Inc. on behalf of the Michigan Department of Treasury, has earned a Silver rating from Morningstar each year since 2012.
MESP, which is sold directly to families that are saving for college, offers 18 investment options for account owners. The plan, which is marking its 20th anniversary in November, has more than 274,907 accounts with total assets exceeding $6.57 billion.
MESP is one of three Michigan Section 529 plans named after the section of the Internal Revenue Code that allowed for their creation. Each plan offers Michigan taxpayers a state income tax deduction on contributions and potential tax-free growth on earnings if account proceeds are used to pay for qualified higher education expenses.
MESP can be used at any eligible college, university or trade school in the nation and some abroad for a variety of qualified higher education expenses, including tuition, fees, certain room and board costs, books, supplies and equipment required for enrollment.
More information about MESP is available at MISaves.com or 877-861-6377.