Ruling supports Kansas’ assertion about unclaimed bonds
Ruling supports Kansas’ assertion about unclaimed bonds
TOPEKA — A federal judge issued a ruling in support of longstanding claims the state of Kansas should take possession of about $150 million in unredeemed, matured U.S. Savings Bonds to improve prospects of identifying the rightful owner, officials said Friday.
Off and on for more than 15 years, Kansas officials have argued the U.S. Department of Treasury should work with the state to identify and return proceeds from matured bonds bought by people with last known addresses in the state. Kansas’ legal counsel asserted the state owned the bonds, despite not possessing the bond certificates issued decades ago by the Treasury Department.
U.S. Court of Federal Claims Judge Elaine Kaplan’s ruling Tuesday affirmed Kansas’ position on ownership of the so-called “absent” bonds, but stopped short of declaring Kansas could redeem the bonds.
Based on a lawsuit filed in 2015 and endorsed by a handful of other states, Kaplan found the treasury department in breach of contract for refusing to recognize Kansas’ ownership of the bonds.
“The court concludes that the (federal) government’s arguments lack merit, and that the undisputed facts entitle Kansas to summary judgment with respect to its ownership of the absent bonds,” she said in the ruling.
However, the judge noted further court action was necessary because “it is neither necessary nor appropriate for the court to determine at this stage in the proceedings whether Kansas is entitled to redeem the bonds.” In other words, the latest twist in the case only allowed Kansas to secure from the treasury department information necessary to make a request to redeem the bonds…
South Carolina’s Future Scholar 529 College Savings Plan reached a major program milestone by exceeding $3 billion in total assets under management.
June 2017 also marked the best June sales month in the 15-year history of the plan.
“We have worked to make Future Scholar one of the best college savings plans in the nation, and exceeding $3 billion in total assets reflects that effort,” State Treasurer Curtis Loftis said. His office administers the program.
“This milestone also demonstrates that more parents than ever understand the importance of investing for their child’s college education, and they are choosing Future Scholar to reach those college investing goals,” he said.
This year Future Scholar is celebrating its 15-year anniversary. Among the growth highlights:
• Total number of accounts has increased from 9,800 to over 134,000.
• Average account size has risen from $8,233 to $20,222.
• Contributions into the plan from South Carolinians have increased 28 percent over the previous year.
Residents of The T&D Region have taken advantage of the savings plan.
As of June 30, 2017:
• Orangeburg County has $8,488,080 in assets in 543 accounts.
• Calhoun County has $2,321,167 in assets in 99 accounts.
• Bamberg County has $1,608,972 in assets in 61 accounts.
As Congress and the administration continue to work to overhaul the nation’s broken tax code, Senate Finance Committee Chairman Orrin Hatch (R-Utah) today called on tax stakeholders to provide ideas, proposals, and feedback on how to improve the American tax system.
After years of committee hearings, public statements, working groups, and conceptual exercises, Congress is poised to make significant steps toward comprehensive tax reform,” Hatch said in a letter. “Members from both parties have acknowledged the shortcomings of our current tax system and the need for meaningful reforms to encourage economic growth and alleviate many of the burdens imposed on hardworking taxpayers…As we work to achieve those goals, it is essential that Congress has the best possible advice and insight from experts and stakeholders.
NAST has submitted a comment letter to the chairman with the “strong recommendation that Congress maintain the current tax treatment for municipal bonds,” stressing that changes could “inhibit the ability of state and local governments to continue leading in development of and investment in critical infrastructure throughout our country.”
Three quarters of all public infrastructure projects in the United States are built by the states and local governmental entities. Tax-exempt municipal bonds are the primary tool that state and local governments use to finance highways, bridges, transit systems, airports, water and wastewater systems, schools, higher education facilities, and other public infrastructure.
CSPN has submitted a comment letter as well where they strongly encourage him “to consider the importance of post-secondary education to our economy.”
These recommendations include retaining the current federal tax exemption afforded to earnings on 529 accounts and prioritizing tax policies to support saving for college. In addition to adopting current and past legislative initiatives to make saving in a 529 plans even more attractive to moderate income families and remove some of the current disincentives to college savings. These proposals are reflected in legislation introduced by Senators Richard Burr (R-NC) and Bob Casey (D-PA) and in the House of Representatives by Reps. Lynn Jenkins (R-KS) and Ron Kind (D-WI).
SEC Summary and Background:
The Securities and Exchange Commission (“Commission” or “SEC”) has published proposed amendments to the Municipal Securities Disclosure Rule (Rule 15c2-12) under the Securities Exchange Act of 1934 (“Exchange Act”) that would amend the list of event notices that a broker, dealer, or municipal securities dealer (collectively, “dealers”) acting as an underwriter in a primary offering of municipal securities must reasonably determine that an issuer or an obligated person has undertaken, in a written agreement or contract for the benefit of holders of the municipal securities, to provide to the Municipal Securities Rulemaking Board (“MSRB”).
GALENA – Kansas Treasurer Jake LaTurner is launching his tour of Kansas’ 105 counties to promote many of the programs and services administered by the Treasurer’s Office. The tour will be starting in LaTurner’s hometown of Galena in Cherokee County on Monday, June 12. Treasurer LaTurner and his staff will be in Galena at the Galena City Hall in the Community Room from noon to 1:30 p.m.
“My goal as the State Treasurer is to help Kansans plan and prepare for the future,” said LaTurner. “I’m really excited to be launching my 105 county tour in my hometown of Galena. Throughout the tour we will be promoting four very important and rewarding missions at the Treasurer’s Office: Returning unclaimed property to its rightful owners, helping Kansans save for higher education, empowering individuals living with a disability and their loved ones to save for disability related expenses, and increasing the financial knowledge of all Kansans. I look forward to offering the most vital functions of the Treasurer’s Office directly to Kansans in their hometowns.”
The State Treasurer’s Office is currently safeguarding $350 million in unclaimed property and is charged with returning it to its rightful owners and heirs. Unclaimed property includes inactive savings and checking accounts, uncashed checks, stock shares and bonds, dividend checks, insurance proceeds, mineral royalties and utility deposits. Kansans who can’t make it to the event may call the State Treasurer’s Office at 1-800-432-0386 or log onto www.KansasCash.com to search for unclaimed property. There is no cost to search and claim your rightful property.
Along with assisting Kansans in their search for unclaimed property, Treasurer LaTurner and staff will be talking to Kansans about how the Office can help Kansans plan and save for the future. The Treasurer’s Office administers the Learning Quest 529 Education Savings Accounts, which helps Kansans save for the students in their lives. The funds are invested and then can be utilized for higher education expenses.
Treasurer LaTurner and his staff will also be helping people living with a disability save for their future by signing eligible Kansans up for the brand new ABLE accounts. The Kansas ABLE checking accounts help make paying for qualified expenses safe and easy, and they continue to empower individuals with disabilities to gain financial independence and save the money they earn.
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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.
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.
A One-Stop Shop to Help Plan, Save, and Pay for College
Hartford, CT – A partnership of State agencies today launched CT Dollars & Sense, a new on-line portal that provides one convenient website for Connecticut students and parents to find out how to plan, save and pay for college.
CT Dollars & Sense, www.CTDollarsandSense.com,combines college planning and financial literacy information from five separate agencies: the Connecticut Higher Education Trust (CHET), the Connecticut Higher Education Supplemental Loan Authority (CHESLA), the Office of Higher Education, the Department of Banking, and the Department of Consumer Protection.
Students can get information on scholarships, loans, and college savings plans, and also learn how to budget their money or find internships. In addition, iGrad provides financial literacy information and resources on the site.
The site’s welcome message reads, “Welcome to CT Dollars & Sense, Connecticut’s one-stop shop for helping you plan, save and pay for college. We have the information that you need – whether you’re trying to save, looking for scholarships, considering a loan, or just want to figure out how to put it all together. CT Dollars & Sense – a great resource for Connecticut students and their families.”
State Treasurer Denise L. Nappier, Trustee of CHET, Connecticut’s 529 College Savings Program, stated, “College affordability has become an important issue for families across the state and the country, with a lack of adequate financing causing an increasing number of students to go deeply into debt or, in some cases, drop out. CHET is proud to play a part in making college education more accessible for Connecticut families despite the headwinds of our time. This new website – by offering information on saving for college, student loan options, financial aid, and scholarships, all in one place and in easy to understand language – should prove invaluable to our State’s students and their families.”
CHESLA Executive Director Jeanette W. Weldon added that “this new website is informative and easy to use. Students can learn how to handle their finances and plan for future careers using a lot of fun, interactive content that will help improve their financial literacy.”
Keith Norton, Acting Executive Director of the Office of Higher Education also emphasized that “Financial literacy is a critical skill which our young people must possess as they prepare for both careers and running their own households. CT Dollars & Sense provides students the opportunity to develop a keen understanding of personal financial responsibility while at the same time providing critical information used to determine how best to finance higher education costs.”
CTDollarsandSense.com is accessible on a computer or mobile device. The site is being promoted through school counselors and financial aid offices, and will be regularly updated with new information.
As a father, I understand the coveted gift all parents dream of giving their children: debtless college educations. However, I also understand how short-term financial necessities and unexpected extras can often overshadow long-term saving goals. From diapers to daycare and family vacations to holiday presents, it’s often tempting to put college savings on the back burner. But the truth is, “college savings procrastination” can be quite dangerous.
According to the College Board, the average cost for tuition and fees at four-year public institutions has increased 225 percent over the last 30 years (after adjusting for inflation). These costs will almost certainly continue to rise. Furthermore, student financial aid expert Mark Kantrowitz recently calculated that students in the class of 2016 graduated with a record-breaking average of $37,172 in college-related debt. Fortunately, these striking statistics can be combatted by saving.
Saving for higher education can set your child on the road to a secure future. The earlier you start, the more time you can grow your savings. For example, if you set aside $50 a month between your child’s birth and 18th birthday, you can accrue over $21,000 in a 529 college savings account that returns 7 percent interest per year. Spreading out your savings in smaller increments from the start will save you from heavy hits to your finances in the future….