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Fund Spy

Meet the Parents

Who's running your 529 plan?

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College savers use 529 plans to make long-term investments with a critical goal. Given the high financial and emotional stakes involved in choosing and paying for the right college, college savers should feel confident about the organizations overseeing their 529 investments. While a mutual fund's parent is the asset-management company offering the fund, a 529 plan's parent role is split between the plan's program manager and its offering state. Frequently the program manager has heavy input on the plan's investment options and pricing, while the state hires the program manager and signs off on all investment decisions. Some states have a dedicated board that has fiduciary responsibilities over a plan, similar to a mutual fund's board of directors.

The plans vary in the way they split responsibilities between the program manager and the state. In some cases, the program manager takes a leadership role in investment decisions, while in other cases the state takes the reins and only utilizes the program manager for record-keeping and marketing. 

Kailin Liu does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.