The 529 plan, implemented in 1996, it is an education savings plan operated by a state or educational institution formatted to help families set aside funds for future college costs. Fidelity Investments, the mutual fund giant that has administered California’s 529 plan since 2006, has dropped out of the running to keep managing it, and a state board has met on Monday to pick a new firm. With a new firm comes new changes leading to the 529 plan’s revamping.
The state board responsible for California’s ScholarShare Plan sought bids from outside providers in March. Fidelity, which manages 529 plans in four other states, did not bid. “Fidelity made a strategic business decision not to bid,” said Vin Loporchio, a company spokesman. “We just made a decision that our best strategy is to focus our efforts in California.” California’s 529 plan has been considered pretty average in comparison to other plans. With the new changes, California is hoping that not only will the modified 529 plan help with college funds but also go above and beyond the previous plan to achieve more.