Morningstar, one of the nation’s most esteemed investment plan rating groups, has released its annual report, and the DE529 Education Savings Plan of Delaware has received a notable upgrade, moving from Bronze to Silver status. This recognition underscores the plan’s commitment to excellence and its dedication to helping families save for higher education.
Robust Oversight and Strong Investment Team Cited as Key Factors
Morningstar’s decision to elevate the DE529 Education Savings Plan’s status was primarily attributed to the plan’s robust oversight and the strength of its investment team. The report highlights Delaware’s “Above Average Parent rating” as a result of multiple layers of oversight and active partners involved in the program. The state’s plans management board, consisting of 11 members, along with two subcommittees and an external investment consultant, meticulously reviews any proposed changes to the plan.
Additionally, Delaware experienced an improvement in its People Pillar score, which evaluates the quality of the investment team. Morningstar recognized the investment team as a top-notch group in the 529 savings space, leading to an upgrade from “Above Average” to “High.” The DE529 Education Savings Plan is managed by Fidelity Investments.
Treasurer Colleen Davis expressed her enthusiasm for the plan’s growth, stating, “We have seen tremendous growth in our 529 plan over the past year.” She further emphasized that the ratings upgrade, combined with the consistent oversight provided by the Plans Management Board and Fidelity Investments’ superior plan management, is expected to drive further growth, with the ultimate goal of achieving Gold status in the future.
As of September 30, 2023, a total of 2,149 new DE529 accounts were opened this year, representing a remarkable 41% increase compared to the same period last year. Among the 54 529 plans available nationwide, only two have achieved Gold status, with an additional 15 securing Silver status.
Donna Vieira, the Executive Vice President and Chief Commercial Officer for Sallie Mae, who also serves as the Chair of the Delaware Plans Management Board responsible for overseeing the state’s investment programs, expressed her satisfaction with the Morningstar rating boost. She emphasized the importance of saving for college and the confidence that families can place in the DE529 Education Savings Plan as a secure and sound investment option.
The Support from the General Assembly
Treasurer Davis attributed the growth and the ratings upgrade to the state’s unwavering commitment to the plan. She acknowledged the support from the General Assembly, which approved tax incentives for contributions to DE529 accounts, as a critical factor contributing to the plan’s success. Davis concluded by expressing pride in offering a competitive product that aids individuals in saving for their educational aspirations.
Delaware’s DE529 Education Savings Plan’s advancement to Silver status in Morningstar’s annual report reaffirms its commitment to providing families with a reliable and effective means to save for higher education. The plan’s ongoing growth and dedication to excellence position it as a top choice for those seeking to secure their educational future.
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