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NE State Farm College Savings Plan |
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State Provider: Nebraska; Net Assets ($mil):
$154.5 as of
10-31-09 |
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Nebraska's State Farm College Savings Plan overhauled its underlying mutual funds in late 2008, and the timing couldn't have been worse. In November 2008, this advisor-sold plan replaced all its previous AIM mutual funds with Oppenheimer investment products. During that fateful month, Oppenheimer's domestic fixed-income products started to show signs of serious trouble. Unfortunately, this plan had a good deal of exposure to some of Oppenheimer's worst offenders--particularly Oppenheimer Core Bond, which sustained steep losses in 2008 due to management's big bets on illiquid securities. The plan also had exposure to Oppenheimer Limited-Term Government (run by the same management team), which didn't fall as hard in absolute terms but lagged virtually every peer in Morningstar's short government category. As a result, those troubled funds have hurt some of the plan's options. The plan's age-based "1-3 Years to College" portfolio and the plan's "College Now" portfolio have fallen more than 16% and 13%, respectively, from November 2008 through the end of February 2009. To date, the state has done nothing to correct the problem and is holding firm with these poor fixed-income products. The plan does have a few good points, such as state income tax deductions (up to $5,000 of contributions can be deducted) for in-state residents and a respectable lineup of Oppenheimer equity funds, but these don't outweigh the issues surrounding this plan. We'd steer clear until the state addresses the fixed-income investment options in this plan. (Information as of 04/06/2009) |
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| Availability: Sales Channel |
Resident: Broker
Non-Resident: Broker
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| Annual State Tax Deduction |
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Up to $2,500 (S),
5,000 (J)
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| Max Investment/Beneficiary |
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$360,000 |
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(includes appreciation)
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| Mos. to Qualified Withdrawal |
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Public, Private & International
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Age-Based Portfolios
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| Static Portfolios |
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| US Stock
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Bond |
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| Total International Funds: 0 |
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| Underlying Funds’ Ratings |
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| Overall Morningstar Rating |
# Equity
Funds |
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# Bond
Funds |
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| Ratings as of
10-31-09 |
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| Range |
0.25 |
| 529 Plan Avg |
0.8 |
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| Portfolio Expense Ratio Range |
| Fee to Change Beneficiary |
| Share Classes: Sales Charge |
| A:
5.5% (front-load) |
| A:
1% (deferred-load) |
| B:
5% (deferred-load) |
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| Initial Purchase |
$250 |
$250 |
| Additional Purchase |
50 |
50 |
| Initial (AIP) |
50 |
50 |
| Additional (AIP) |
50 |
50 |
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