Montana 529 Plan F.A.Q.

The information represented in this F.A.Q. is not meant for, nor should it be used as, the basis for any investment decisions. We suggest you contact College Savings Bank or Vanguard, or speak with an investment professional before investing in a 529 plan.

Frequently Asked Questions about Montana's 529 College Savings Plan

What is a 529 plan?
Why should I invest in a 529 plan?
Does Montana have a 529 plan?
Who manages the MFESP?
What are my investment options with MFESP?
Does the MFESP offer any type of index fund?
What are the advantages of MFESP?
Am I only allowed to invest in MFESP?
What are the fees associated with MFESP?
Does the MFESP charge any type of account maintenance fee?
What options do I have for purchasing shares in MFESP?
How can I contribute to my account?
As an employer, how do I make payroll deductions available for my employees?


What is a 529 plan?

A 529 plan is a tax advantaged college savings vehicle, named after section 529 of the internal revenue code. With a 529 plan, contributions into an account are allowed to grow tax free, while at the same time allowing for tax free disbursements when the funds are used to pay for schooling at any accredited institution world wide. 529 plans are sponsored by a state’s government and are usually managed by a program administrator. Most states offer tax incentives for resident investors who contribute to 529 plans.

Why should I invest in a 529 plan?

As college costs continue to rise, a 529 college savings plan is one of the best mechanisms available to families to pay for college. By combining a well thought-out investment strategy with the tax advantages offered by many states, a 529 college savings account is an outstanding way to cover the cost of college.

Does Montana have a 529 plan?

Yes, Montana has its own 529 plan which is collectively called the Montana Family Education Savings Plan, or MFESP. The MFESP offers savings options from both the MFESP Bank Plan and the MFESP Investment Plan.

Who manages the MFESP?

The Montana Board of Regents of Higher Education (the program trustee) has contracted with College Savings Bank to serve as the program manager of Montana 's 529 plan. Upromise Investments, Inc. and Upromise Investment Advisors, LLC (together, Upromise Investments) will provide distribution, recordkeeping, and administrative services for the Investment Plan.

What are my investment options with MFESP?

MFESP offers you two ways to save for your child’s education. You can choose from the MFESP Bank Plan or the MFESP Investment Plan. The MFESP Bank Plan features an FDIC-insured savings account and certificates of deposit (CDs) from College Savings Bank. The Investment Plan, which features investments from The Vanguard Group, Inc. (Vanguard), a leader in low-cost mutual funds. You can also choose to use both to save for your child’s future.

Does the MFESP offer any type of index fund?

Yes. The MFESP Bank Plan offers the InvestorSure® CD. The InvestorSure CD is a variable rate certificate of deposit indexed to the Standard and Poors' 500 Composite Stock Price Index (S&P 500). The InvestorSure CD does not risk principal and is FDIC-insured up to $250,000 per depositor.

The MFESP Investment Plan offers five portfolios featuring underlying funds managed by Vanguard. Portfolio models range from Conservative to Aggressive and can be purchased directly from the MFESP Investment Plan. For more information please visit mfesp.com.

What are the advantages of MFESP?

There are several reasons to invest in Montana's 529 plan:

  • If you are a Montana resident you may deduct up to $3,000 ($6,000 if married and filing jointly) annually from your Montana adjusted gross income.
  • By investing with the MFESP you can maintain a college savings plan with little or no fees.
  • MFESP has been recognized as an “excellent program” by industry experts such as Savingforcollege.com which recently awarded the Montana 529 plan a 3.5 and 4 out of 5 cap rating.

Am I only allowed to invest in MFESP?

Montana residents may invest in any state 529 plan they choose.

What are the fees associated with MFESP?

There are some fees generally associated with the MFESP:

MFESP Product Cost/Fees
CollegeSure CD 0%
InvestorSure CD 0%
Fixed Rate CD 0%
Vanguard LifeStrategy® Growth Portfolio 0.89%
Vanguard LifeStrategy® Moderate Growth Portfolio 0.88%
Vanguard LifeStrategy® Conservative Growth Portfolio 0.87%
Total Stock Market Index Portfolio 0.82%
Total International Stock Index Portfolio 0.88%

Does the MFESP charge any type of account maintenance fee?

MFESP Investment Plan accounts are charged a $25 annual maintenance fee. However, the fee is waived for any account owner who is a Montana resident, anyone who uses an automatic investment plan (AIP) or payroll deduction, or for any account with a balance of $25,000 or more. College Savings Bank does not charge an annual fee.

What options do I have for purchasing shares in MFESP?

Investors have the option of purchasing the Bank Plan shares either with the assistance of an investment professional (advisor sold), or by contacting the MFESP Bank Plan directly to open an account (direct sold). The MFESP Investment Plan shares are direct sold only, so investors will need to contact the Investment Plan directly. Both MFESP options can be contacted by calling 1-800-888-2723 or by visiting www.mfesp.com.

How can I contribute to my account?

Contributions to your 529 account may be made by the following means:

  1. Payment by check, the first of which must include a minimum initial investment of $250.00 for MFESP Bank Plan and $25.00 for MFESP Investment Plan.
  2. Payment through automatic withdrawal from a bank account. This is a preauthorized agreement between you and the program manager to automatically withdraw a set amount per month from your bank account and deposit it into your 529 account. Payment by this means waives the initial investment.
  3. Payment through payroll deduction is also available, if such a service is offered by your employer. Check with your employer to see if payroll deduction services are offered. Payment by this means waives the initial investment.


As an employer, how do I make payroll deductions available for my employees?

Employers interested in offering payroll deductions should contact College Savings Bank at 1-800-888-2723.
 

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