January 16-17, 2003

 

ITEM 118-109-R0103                  Montana Family Education Savings Program; Program Enhancements

 

THAT:                                       The Board of Regents of Higher Education authorizes the expansion of investment choice in the Montana Family Education Savings Program through the addition of the PIMCO Inflation Managed Portfolio available through College Savings Bank/Pacific Life Variable Products.

 

EXPLANATION:                        Background 

The Montana Family Education Savings Program (“MFESP”) was established pursuant to the “Family Education Savings Act,” Ch. 540, L. 1997 (the “Act”) and amended in 2001, Ch. 468, L. 2001.  The MFESP was designed to comply with section 529 of the Internal Revenue Code in order to offer participants favorable tax treatment.

 

The Act authorizes the Board of Regents of Higher Education (“BOR”) to implement the program and creates an Oversight Committee under the authority of the BOR to assist in the implementation and administration of the program.  In 1998, the BOR contracted with College Savings Bank (“CSB”) to serve as account depository and program manager of the Montana Family Education Savings Program.  As part of its role as manager, a CSB subsidiary, College Savings Trust, Helena, Montana, holds all accounts in trust for the benefit of the account owner and the state of Montana.

 

In January, 2002, the board authorized the expansion of investment choice in the program through the addition of 14 “best of class” mutual funds available through Pacific Funds along with five portfolio optimization models.  This item would further expand the investment choice available by the addition of the PIMCO Inflation Managed Portfolio also available through Pacific Live Variable Products.