Articles

Make Education Savings Automatic for Your Employees, and for You!

When it comes to saving for the high cost of education, where do you start? The answer for many St. Louisans is at work. Citywide, employers and their HR leaders are choosing to help employees save money for education through after-tax direct deposit into Missouri’s own 529 plan, MOST – Missouri’s 529 Education Plan.

So little by little, with each paycheck, employees can add to or potentially build their education fund. Best of all, offering this innovative benefit requires no added costs, systems, or contracts. A 2016 survey found that 72 percent of employees said customizable benefits would increase loyalty to their employer¹. Additionally, a May 2020 survey by Gift of College found that 75 percent of employees would like their employers to help pay for college, and of those more than half agree a 529 payroll deduction option would be helpful.² Just agree to allow your employees to save for education via payroll direct deposit and reach out to your local rep here in St. Louis for more support.

A COMPETITIVE ADVANTAGE FOR EMPLOYERS.
Offering a 529 provides a competitive edge for companies, while complementing existing benefits like your 401K and other savings plans. No ERISA or Form 5500 requirements to be concerned with and the enhancements to your tuition reimbursements and/or other education savings efforts is a plus. Need to get better educated about Missouri’s – MOST 529 Education Plan? Join us for a webinar.

HERE’S ALL YOU NEED TO DO TO GET STARTED
First, make a commitment to establishing a 529 Plan as a benefit. As with any benefit, assessing whether your employees are interested in the product is key. Concerns about affording the cost of education remain top of mind for most Americans. When asked how likely they would be to participate in such a benefit, the majority (86 percent) of respondents answered in the affirmative.³

Next, take time to educate and encourage your employees to enroll.  You can do this by featuring a 529 at your next benefits fair or host an education savings webinar. Use your intranet to post a link to the state-sponsored plan. Of course, just like your other benefits, adding information to employee payroll envelopes and new hire packages is an easy and inexpensive way to spread the word. Don’t forget to email employees announcing this new benefit!

A COMPETITIVE ADVANTAGE FOR EMPLOYEES.
What makes the benefit attractive for many participants are the “automatic” savings feature, tax-deferred growth, and tax-free distributions.

Your employees can take advantage of qualified withdrawals for: tuition/room and board, books, fees, supplies, in-state, or out-state schools, 2-4-year institutions, graduate school, international schools, trade/vocational schools, and apprenticeships.⁴

In late 2019, the 529 IRS code was expanded to include: K-12 tuition (up to $10,000 per year) and student loan repayment (up to $10,000 over the lifetime of the beneficiary).

FOR EMPLOYEES, GETTING STARTED IS EVEN EASIER.
Good news for HR/Benefits coordinators; employees can enroll in a direct sold 529 plan online.  For Missouri, employees can navigate to www.most529.com.  No need to wait for open enrollment, as this benefit can be launched at any time. 

Now, you’re ready to help your employees save for education!

Disclosure:
¹https://www.plansponsor.com/Benefits-Customization-Key-to-Employee-Retention/
²https://www.prweb.com/releases/new_study_75_of_americans_say_employers_should_help_pay_for_college/prweb17155332.htm
³“Americans Still Don’t Know About 529 Plans.” Edward Jones. 17 May 2016. https://www.edwardjones.com/about/media/news-releases/529-plan-awareness.html
⁴Earnings on nonqualified withdrawals may be subject to federal income tax and a 10% federal penalty tax, as well as state and local income taxes. The availability of tax or other benefits may be contingent on meeting other requirements.

For more information about MOST—Missouri’s 529 Education Plan, call 800-868-3585 or visit MOST529.com to obtain a Program Description, Privacy Policy, and Participation Agreement. Investment objectives, risks, charges, expenses, and other important information are included in this document; read and consider it carefully before investing.

If you are not a Missouri taxpayer, please consult a tax advisor. Consider before investing whether your or the designated beneficiary’s home state offers any state tax or other benefits that are only available for investments in such state’s qualified tuition program. Other state benefits may include financial aid, scholarship funds, and protection from creditors.

The Missouri Education Savings Program (the “Program Trust”) is a trust created by the State of Missouri. When you invest in MOST—Missouri’s 529 Education Plan (the “Plan”), you are purchasing portfolio units issued by the Program Trust. Portfolio units are municipal securities. The Plan has been implemented and is administered by the Missouri Education Savings Program Board (the “Board”). Ascensus College Savings Recordkeeping Services, LLC, serves as the Program Manager and Recordkeeping and Servicing Agent, and together with its affiliates, has overall responsibility for the day-to-day operations of the Plan. The Vanguard Group, Inc., serves as Investment Manager for the Plan. The Plan’s portfolios, although they invest in mutual funds, are not mutual funds.

INVESTMENTS ARE NOT FDIC INSURED; MAY LOSE VALUE AND ARE NOT BANK GUARANTEED.

Angela Williams, MBA
Sr. Institutional Relationship Manager
Ascensus Government Savings
Representative for Missouri’s 529 Education Program Direct Plan