Readers continue to write to us with questions about financing college, including how best to use “529” plans, the tax-advantaged higher-education accounts that invest in mutual funds. We asked experts to help answer this month’s questions. An excerpt from Treasurer Boozer’s interview is below…
I would like to reward employees by starting 529 accounts for their children that will vest after 10 years of the parents’ employment at our company. Is this possible?
Yes. Because a 529 is funded with after-tax money, the main advantage of a workplace payroll-deduction 529 account is convenience for the employee.
In terms of vesting, you are allowed to set any restrictions you wish on a workplace plan as long as you follow the IRS rules regarding 529 accounts, says Alabama State Treasurer Young Boozer III, who chairs the College Savings Plans Network.
“Employers may contribute a match or add additional funds, but the employee will be taxed on these amounts, which are considered income to the employee, unless the employer makes arrangements to pick up the IRS tab,” Adam says. Some states, including Nevada, give tax credits to employers who offer 529 plans and match employee contributions, she says.
Before launching your program, call the 529 plan administered by the state where your company is based to see if there are any other state incentives that could benefit your employees, Boozer says.
When paying my child’s tuition, I first paid the college myself and had our 529 plan reimburse me. Then I read that I should instead have the check sent in my child’s name, so when I made a withdrawal from another one of our 529 plans, I did that. Will this affect our taxes?
You are allowed to have the check made out in either name, so you have done nothing wrong. “Essentially, the tax consequences, if any, are applicable to the payee of the check, as they received the 1099,” Boozer says. If you used the withdrawal for qualified educational expenses—tuition, books, mandatory fees, room and board, computers and related costs—you won’t have to pay any taxes. If the money went toward something else, you’ll have to pay taxes on any gains, plus a 10% penalty (you won’t owe anything on the portion of your withdrawal that represents your contributions to the account).
“One caveat: If at any point you do end up with a taxable 529 distribution, either because you withdrew too much, or withdrew the wrong year, or withdrew funds to cover nonqualified expenses, it is usually beneficial tax-wise to have that withdrawal reported to the student, who’s probably in a lower tax bracket, rather than to the parent,” Adam says.
As I understand it, computers are only allowed as a 529 expense if the computer is listed as a requirement by the college. Is that correct?
No. As of Jan. 1, 2015, you can use 529 money to buy computers and related equipment even if the school doesn’t require it. What’s now covered: the purchase of any computer technology such as laptops, desktops and even iPads, related peripheral equipment such as printers, computer software used primarily for educational purposes, and related services such as internet access if used by the beneficiary of the 529 plan during any of the years the beneficiary is enrolled at an eligible educational institution, Adam says. Adam recommends keeping your receipts in case the IRS asks about them, and matching your 529 withdrawals to the same year you bought the computer equipment.
VIEW FULL STORY: http://www.marketwatch.com/story/does-it-pay-to-start-at-a-community-college-it-depends-2017-04-20
The Office of the Illinois State Treasurer (“Treasurer”) is issuing this Request for Proposals (“RFP”) for Automated Teller Machine (ATM) Services – State Agencies to provide employees and visitors to various State of Illinois Agencies (“Agency” or “Agencies”) convenient access to ATM services on a year-round basis and for special events. Specifically, such ATM services include the installation, branding, cash management, cash delivery, technical support, customer service, and maintenance of ATMs located at multiple Agency facilities. Vendors and financial institutions that submit Proposals (“Respondent”) shall submit their Proposals by 2:00 p.m. CT on May 12, 2017.
The Treasurer seeks a Contractor with an efficient and cost effective ATM services process. The winning Respondent (“Contractor”) must be authorized to do business in Illinois and have a presence in Illinois. In addition, if Respondent is a financial institution, then Respondent must also be an Illinois bank or a national bank with a presence in Illinois and be a member of the Federal Reserve System with access to all services as a member bank, and qualify as a depository of public funds. At the time the Contractor submits its Proposal, or prior to that time, if required by law, the Contractor must have all required licenses, bonding, facilities, equipment and trained personnel necessary to perform the work specified in this RFP.
Finally, the Contractor must have a minimum of five (5) years of experience performing the services being sought by this RFP. The Contractor shall enter into a contract with the Treasurer (“Agreement”) for an initial term of four (4) years. Upon expiration of this term, the Treasurer may elect to extend the Agreement for additional periods of time, not to exceed a total of ten (10) years, including the initial four (4) years.
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TOPEKA – State Sen. Jacob LaTurner will replace Republican Ron Estes as the state treasurer of Kansas.
Gov. Sam Brownback announced the appointment Tuesday morning after Estes sent the governor a letter announcing he would resign on April 25.
“I know Jake to be a fine man, a skilled public servant and a fiercely loyal Kansan,” Brownback said.
LaTurner, a 29-year-old Pittsburg Republican, has served in the Senate since 2013 and was chairman of the Senate’s federal and state affairs committee this year.
The conservative Republican has voted against tax increases and Medicaid expansion this session.
LaTurner lists his occupation on the Kansas Legislature’s website as a small business owner. He said during a press conference Tuesday that he does consulting work that deals with customer service
“The treasurer’s office is an exciting place to be,” LaTurner said.
B.J. Harden, the assistant state treasurer, described the office as “the state’s bank.”
The treasurer’s office also oversees the state’s effort to help people find their unclaimed property money, and administers a college education savings program and other financial services, according to the state’s website.
LaTurner said his intention was to run for a full four-year term in 2018 when the office is on the ballot again.
The governor’s appointment of LaTurner opens a spot in the Kansas Senate as lawmakers prepare to return to Topeka on May 1. The Legislature is facing almost $1 billion in projected budget shortfalls through June of 2019.
The Illinois Secure Choice Savings Board (“Board”) authorized the Office of the Illinois State Treasurer (“Treasurer”) to issue this Request for Proposals for Illinois Secure Choice Program Manager (“RFP”) on behalf of the Board for the Illinois Secure Choice Savings Program (“Secure Choice”).
The successful Respondent (“Contractor”) will provide all of the necessary services to run and operate Secure Choice, with the overall goal of providing Illinois workers with access to an easy, safe, and convenient retirement savings tool. The Treasurer and Board are seeking Proposals from vendors, such as record keepers, investment management firms, and financial services firms, with the expertise and ability to launch and manage a new state-run retirement savings program for private sector workers.
The ideal Respondent is one with a strong investment track record; comprehensive risk management skills; experience establishing, developing, and administrating defined contribution retirement programs and Individual Retirement Account (“IRA”) programs; the ability to provide comprehensive record keeping services; the capacity to successfully onboard and enroll a significant number of employers and employees; and expertise in client counseling, portfolio management, and management and evaluation of passive equity and fixed income index funds, asset allocation, glide paths, and defined contribution best practices.
The Contractor shall enter into a contract with the Treasurer and the Board (“Agreement”) for an initial term of seven ( 7) years. The Treasurer and the Board may elect to extend the Agreement for a period of time agreed upon by the parties, not to exceed a total term of ten (10) years, including the initial seven (7) years.
Respondents must submit their Proposals by 2:00 p.m. CT on May 25, 2017.
As a part of Financial Literacy month, the Financial Education & Empowerment Committee has been compiling updates to our Financial Education Census where we have information about each states’ financial education programs. The updated document is now available on our website on the Financial Education section under the Affiliates & Networks tab. We hope you will use this as a resource in advancing financial education in your state!
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The City of Worcester, the second largest City in Massachusetts with an annual budget of $600M, is seeking an experienced professional for the position of Treasurer and Collector to be responsible for the financial management, cash investments, debt service management, issuance of bonds, and administration of all City funds; supervise payroll and accounts payable; oversee collection of all City revenues, taxes, user fees, and parking tickets.
Minimum qualifications: BA/BS in Accounting, Finance, Public Administration, or related field; at least five years of related finance experience of which three years have been in a supervisory role preferably in a municipal finance setting, or an equivalent combination of education and experience; Master’s Degree preferred; CPA desired. Successful candidate must be bondable, have excellent communication skills and knowledge of state and federal regulations regarding municipal finance. Position requires permanent residency in the City of Worcester within one year of appointment. Salary Range is $90K-$139K with an excellent benefit package.
To apply, please visit: www.worcesterma.gov/employment or send resume and cover letter on or before Friday, April 28, 2017 to: City of Worcester, 455 Main Street, Room 109, Worcester, MA 01608. The City of Worcester is an EOE/AA employer. Preference is given to Worcester residents. The City of Worcester does not discriminate in its programs and activities on the basis of age, gender expression/gender identity, genetic information, marital status, color, national origin, language, physical or mental disability, pregnancy, race, religion, sex, sexual orientation, or veteran status, as application. Direct inquiries to: City Hall, Human Resources, Room 109, 508-799-1030, EEOAA@worcesterma.gov
** CLOSING DATE: April 30, 2017
The Maryland State Treasurer’s Office is seeking an Executive to serve as the Director of Treasury Management. This position is responsible for all activities performed by the Banking Services Unit as well as the Investment Unit. The person who will ultimately fill this position will be responsible for translating the agency mission and strategy into daily operations and building the organizational support needed to achieve that mission within the Treasury Management Division. Some of the principal duties include, but are not limited to the following:
• Managing the daily operations of the Banking Services Unit; including reconciliation of the State’s main bank accounts, processing of bank adjustments and posting of transactions in excess of $175 billion to the State’s general ledger annually.
• Managing the State’s $6.7 billion investment portfolio in order to meet the State’s daily liquidity requirements.
• Acting as a liaison between the banks and State agencies. Authorizing and implementing new services offered by the banks to solve problems identified by the agencies in their effort to serve the public.
• Ensuring protection of State funds on deposit through the monitoring of accounts and collateral balances.
• Drafting legislation relative to investments affecting public entities throughout the State.
• Performing monthly interest allocation from the State’s investment portfolio to State agencies
• Overseeing the $4 billion Local Government Investment Pool.
• Monitoring securities lending activities.
• Identifying the needs of the division and manage the professional development of the staff in order to facilitate the goals of the department.
• Independently analyzing the current operations and structure of various programs and systems and improve efficiency in providing services to all State agencies.
The chosen candidate will need to identify and support business transformation and productivity initiatives that improve efficiency and execute operations while leading, inspiring and developing a high quality, talented team capable of supporting the needs of the agency. Candidates must have excellent organizational, communication and people skills. Additionally, must be effective at team-building, and must be able to demonstrate the ability to work as a hands-on manager. The incumbent must possess the highest level of integrity and professional judgment. Candidates should possess a strong financial background.
This is a full-time position with MD State employment benefits which include: paid holidays, vacation, sick and personal days; medical and dental plans; pension plan; 401k/457 plans; employee credit union; direct deposit; paid parking.
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By Tim Gorrell, Executive Director, Ohio Tuition Trust Authority
March 27, 2017
April has been designated Financial Literacy Month to focus on increasing the public’s comprehension of basic monetary concepts. Many banking institutions and credit union offer financial wellness seminars. Additionally, university extension offices may provide financial literacy classes. By doing a little research, people can find many free resources available to improve their understanding of how to best use, as well as save, their money.
For the 529 industry, progress has been made in educating the public about the abundant advantages of these college savings plans and it must continue.
While student loan debt nationally has risen to $1.3 trillion, there has also been a marked increase over the past ten years in saving for college which indicates a measure of thoughtful financial literacy. According to the Sallie Mae report, “How America Saves For College 2016,” 57 percent of parents are now saving for their children’s future college costs, up 9 percent from 2015. Additionally, the average savings amount now stands at $16,380, an increase from $10,040 in 2015. The report also found that families who use 529 college savings plans have saved more than other college savers. A takeaway from the report is people are learning about the added tax benefits and values of 529 college savings plans and are using them.
There is still more for the public to understand about 529 plans, including one that many people don’t recognize – that 529 accounts aren’t just for children. If an adult would like to head back to college to finish their degree, hone their professional skills, or start a new career path, then they should consider opening a 529 college savings account for their own college expenses and tax benefits.
Traditionally, 529s have been used to fund children’s future college costs; however, there are no age restrictions on who can use these college savings accounts and no time limits on when the account must be used. Furthermore, 529 plans were created to be used at any federally accredited educational institution, which includes two-year, four-year, graduate, professional or post-secondary degree programs. For working adults who want to continue their college education to advance their career, they should check with their human resource department to see if tuition reimbursement is a part of the employee benefits. This benefit combined with 529 savings could significantly reduce higher education costs.
All the tax advantages associated with a child’s 529 account would also apply to an adult’s account. The 529 college savings plan will grow with tax-free earnings on contributions. Withdrawals from 529 plans are also tax free, provided the funds are used for qualified higher education expenses, which includes many large costs like tuition, mandatory fees, and computers. Some states also allow deductions to state taxable income based on contributions made to 529 plans.
An additional benefit to 529 plans: If there is money left over in a child’s plan, the account owner can transfer the remaining funds to the parent’s account. No tax penalties will be accessed with the transfer as long as the new beneficiary is a family member, which the parent is. By rolling over these 529 plan assets, the account owner can use the money already set aside for college expenses for their own continuing education.
People want to understand their finances and make informed fiscal decisions. As they learn more about the multiple benefits of 529 accounts, the use of these college savings plans will continue to grow.
About the author:
Tim Gorrell is the executive director of Ohio Tuition Trust Authority. For more than 25 years, Ohio Tuition Trust Authority has sponsored and administered CollegeAdvantage, Ohio’s 529 College Savings Program. CollegeAdvantage now oversees more than 635,000 accounts and over $9.92 billion in assets. Visit CollegeAdvantage.com or call 1-800-AFFORD-IT (233-6734) to learn more.
Ascensus College Savings is the leading provider of program management and administrative services in the 529 College Savings industry, and is currently serving 3.5 million accounts with over $70 billion in assets under administration. We have an unique opportunity for a professional who is willing to take their recently acquired MBA and advance their career to an executive level. This position reports directly to the Chief Operating Officer for the College Savings division, and is responsible for supporting the COO in managing all day-to-day operations of the business. This includes delivering on the annual operating plan to achieve company objectives; supporting and managing the overall budget for operations; vendor contracting and oversight; technology governance; and long-range strategic planning.
This highly visible role has direct involvement in the implementation of key decisions and must be able to communicate with all areas of the company, including members of the senior leadership team. The ability to apply critical thinking and analysis in support of maintaining superior operational performance is a core requirement of the role, particularly in a rapidly growing environment.
Job Functions and Responsibilities
• Support COO in managing the internal operations of the College Savings business; devise strategies and formulate policies to ensure that operating goals and objectives of the organization are met.
• Under the direction of the COO, manage the aggregate budget for operations, supporting operational leaders on their individual cost center needs and goals.
• Support operational managers on organizational planning and annual staffing plans, as well as the allocation of critical resources against strategic objectives.
• Identification, evaluation, and prioritization of potential IT investments in ways that drive business value.
• Lead or support the successful negotiation of vendor contracts for critical outsourced functions of the business.
• Partner with and build relationships among key stakeholders, including technology, client services, investment operations, finance, business development, legal, compliance, relationship management and marketing colleagues.
• Build presentation decks in support of strategic initiatives, including the creation and maintenance of an annual product roadmap for the proprietary 529 College Savings platform.
• Maintain professional and technical knowledge by attending educational workshops; reviewing professional publications; establishing personal networks etc.
• Identify, track, and monitor key performance metrics and recommend operational changes to improve performance.
• Work with Risk Management team to track internal or vendor incidents impacting business performance, and track to resolution.
• Responsible for protecting, securing, and proper handling of all confidential data held by Ascensus to ensure against unauthorized access, improper transmission, and/or unapproved disclosure of information that could result in harm to Ascensus or our clients.
• The I-Client philosophy and the Core Values of People Matter, Quality First and Integrity Always® should be visible in your actions on a day to day basis showing your support of our organizational culture
Experience, Skills, Knowledge Requirements:
• Bachelor’s and MBA (or relevant advanced degree) required.
• 8- 10 years’ experience in financial services industry with 10 + years’ experience in operations management roles
• Proven leadership experience, with solid decision making skills
• Experience building presentation decks for clients and executive management
• Demonstrated experience and knowledge of the legislative/regulatory environment in the financial industry
• Excellent written and verbal communication skills; must be able to build and maintain strong relationships with a variety of internal and external counterparts
• Ability to negotiate and experience influencing senior stakeholders
• Ability to assimilate to new experiences, learn quickly and absorb a steep growth curve
• Must be results oriented and move fast to meet client needs
• Some travel may be necessary as business need arises
• FINRA Series 6 or 7 and Series 24 or 26 licenses preferred
Ascensus is a place to have a career, not just a job. As the largest US independent retirement and college savings services provider, we put our focus on people. Our culture is guided by sound principles, is committed to high standards, operates with transparency, and welcomes diversity. When you join our team, you get to go to work every day knowing that you help over 6 million Americans save for retirement and college.
To apply, visit
We are proud to be an EEO employer M/F/D/V.
Updated: 9:50 AM ET | Originally published: Mar 22, 2017
There are 13 million college savings accounts in this country, and more than half received at least one deposit in 2016. Those are decent numbers, and growing—but they cover just a tiny fraction of the country’s college-bound population.
A current bill in the House of Representatives aims to change that. Supporters of H.R. 529 say it could address both a lack of awareness of the plans—by encouraging employers to add 529 plans to their benefits package—as well as inflexible spending rules, by offering more ways to use 529 funds without getting hit with a penalty.
The bill, co-sponsored by Rep. Lynn Jenkins (R-Kan.) and Rep. Ron Kind (D-Wis.), would let companies contribute up to a $100 match to employee 529 plans without counting it as taxable compensation, and would offer a tax credit to small businesses to help offset the costs of setting up a payroll deduction system. (The bill also provides for similar payroll matches for ABLE account contributions.)
Savers also would be able to use money from a 529 account, penalty-free, for paying off student loans or making charitable contributions. Currently, 529 account holders must pay a 10% penalty on earnings if they use the money for anything but approved college costs.
Although 529 plans have been around for 20 years, growth has been relatively slow for a variety of reasons. One key challenge: Surveys regularly find that many parents have never heard of 529 plans or don’t understand how they work.
Leaders of the College Savings Plans Network, a coalition of state-run college savings programs, hope that 529 plans can follow the path of 401(k) accounts to become a widely offered employee benefit. “When companies got into payroll deductions and matching contributions, there was a huge growth in people participating,” says Young Boozer, the Alabama state treasurer and chairman of the College Savings Plans Network.
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