Oregon College Savings Plan reduces administrative fee

SALEM, Ore. (KTVZ) – Driven by a record-setting year of contributions and a strong fiscal position, the Oregon College Savings Plan has reduced its administrative fee by 20 percent. With the lower fee (from 0.25 to 0.20), Oregon families saving for college through OCSP can now expect to see a greater percentage of their contributions going toward future higher education expenses, officials said Tuesday.

Lower fees and a standout target enrollment investment series were key factors in solidifying OCSP’s silver standing in Morningstar Inc.’s 2022 rankings of national college savings plans. Of the 14 plans singled out by Morningstar this year with a top-tier rating, OCSP is among the 12 plans ranked as silver. The continued focus on developing a high-quality and high-performing plan for savers, in combination with steady industry recognition, demonstrates that OCSP is delivering for its participants.

Plans are recognized based on Morningstar’s confidence that their investment options will collectively outperform other plans and whether they exhibit a combination of attractive features, including: a well-researched asset-allocation approach, a robust process for selecting underlying investments, strong oversight from the state and investment manager, and low fees.

“Ensuring that higher education is accessible and affordable for all families remains our top priority. Lowering fees is an important step in making it easier for all Oregonians to be able to save for their higher education,” said State Treasurer Tobias Read. “We are encouraged by this recognition from Morningstar, which acknowledges our work to enhance our savings options and lead in this space.”

This latest fee reduction comes on the heels of an earlier decrease made possible by the transition to a new plan administrator in 2018. The move to Sumday Administration, now doing business as Vestwell State Savings, allowed OCSP to lower underlying fund fees for savers and offer an innovative program management fee structure.

As expected, this new fee structure, and the growth in assets under management, enabled this further fee reduction in 2022. Current OCSP savers now pay a low annual administrative fee of 0.20 percent of their total savings, and an annual investment fee (ranging from 0.02 percent to 0.45 percent of their total savings) based on the investment portfolios they’ve selected. Fees cover program essentials, with no other recurring expenses when accounts are managed online.

OCSP is acknowledged by Morningstar to have one of the most progressive investment structures in the industry, with a set of target investment options that allow savers to tailor investments and risk exposure based on the year the beneficiary is expected to enroll in higher education. This feature responds to the reality that not everybody moves directly to post-secondary education after high school.

In addition to enhancing investment options, OCSP has focused on reducing barriers and improving and expanding options that make it easier to save. In January 2020, Oregon officially became the first state in the nation to offer a refundable tax credit for higher education savings, allowing more families to benefit from saving for college.

The Education Savings Credit replaced the previous tax deduction and provides the same maximum credit to all Oregonians who are saving for college, community college, trade school, or other post-secondary education through OCSP. Designed to reach communities across both the state and the income spectrum, the tax credit is tiered, with low- to moderate- income families receiving a higher percentage match.

OCSP set a record last year, bringing in $297 million in contributions to more than 131,000 accounts across the state, ending the year with more than $2.9 billion in assets under management.

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The Oregon College Savings Plan is a state-sponsored savings program that comes with special tax advantages and can be opened by just about anyone—parents, family, friends, even future students. The money saved in the Oregon College Savings Plan grows tax-free and can be used for qualified expenses at any accredited, post-secondary institution or trade school. To learn more and to open an account, please visit www.oregoncollegesavings.com or call 866-772-8464.

The Oregon Treasury Savings Network, part of the Oregon State Treasury, was launched in January 2001 to administer the Oregon College Savings Plan. It has since expanded to administer the Oregon ABLE Savings Plan and national ABLE for ALL Savings Plan, and the first state-run retirement program, OregonSaves.