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Maryland 529 should refund fees | READER COMMENTARY

For The Baltimore Sun
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A sticker displays the name of a group of 500 Maryland parents who have advocated for legislative action to address their inability to access interest payments with the Maryland 529 Prepaid College Trust. File. (Lia Russell/Baltimore Sun)

A sticker displays the name of a group of 500 Maryland parents who have advocated for legislative action to address their inability to access interest payments with the Maryland 529 Prepaid College Trust. File. (Lia Russell/Baltimore Sun) (Lia Russell/Baltimmore Sun)

There are two major Maryland college savings plans run by an independent state agency, the Maryland Prepaid College Trust and the Maryland College Investment Plan. Much has been written about the difficulties encountered by the Maryland 529 board in administering the trust (”Frustrated parents turn to former Maryland 529 employee for answers on source of calculation error,” March 3). I want to address the fees charged to contract holders in the Maryland College Investment Plan, which materially affect investment returns.

Based on audited financial statements for the year ended June 30, 2022, a total of $4.2 million was charged to Maryland College Investment Plan contract holders for Maryland 529 agency administrative overhead and the administration of the Maryland Prepaid College Trust. In addition, about $3.3 million was paid to the investment management firm for recordkeeping and account holder servicing expenses of the Maryland College Investment Plan. Funds offered in this plan also are net of management and other fees. These fees are based on a percentage of the fiduciary assets in the plan.

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Over a period of years, these fees materially affect funds available for college. They have resulted in an operating surplus of $12.7 million as of last June and should be returned to contract holders in the Maryland College Investment Plan.

— Karl Silex, Baltimore

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