529 Savings Plans
MFS 529 Savings Plan was designed to offer you and your clients more investment choice, pricing options, and quality service. Plus, you get the global asset management expertise of MFS Investment Management.
Flexible pricing options
High contribution level, low minimum initial investment
Gifting and estate planning features
Easy to open and maintain
Benefit for Oregon taxpayers
With an MFS 529 Savings Plan, your clients have a variety of investment options plus three investment paths to take.
1. Age-based investment option
When you select the age-based investment approach, you do not have to worry about switching to a more conservative portfolio as the child approaches college age. Your assets are automatically transferred to a more conservative asset allocation fund as your beneficiary approaches college age. This option transfers your assets among five MFS asset allocation funds that are designed to take into account the approximate number of years before your beneficiary starts college. Then, during the child’s college years, the assets are placed in a conservative bond fund (MFS Limited Maturity Fund). Automatic exchanges take place on the quarterly exchange date on or following the beneficiary’s sixth, eleventh, fifteenth, seventeenth and nineteenth birthdays. The funds' objectives and investment strategies change from one age-based model to another, and the principal value of the fund options are not guaranteed at any time.
2. Built-in allocation approach
The built-in allocation approach simplifies the decision process by offering asset allocation funds that are preassembled for you. Asset allocation investment options offer targeted asset mixes to match the varying objectives and risk tolerance of investors. They are rebalanced periodically.
3. Customized approach
Create your own diversified portfolio from a menu of MFS mutual funds. We offer a full spectrum of investment choices, from more aggressive stock funds to balanced funds to conservative bond funds. Your financial advisor can help you select the right mix of MFS funds.
Funds are listed relative to one another within the MFS funds and are not meant to be compared with other portfolios or other types of investments. The three major factors taken into account when listing the portfolios from less aggressive to more aggressive are historical volatility, types of securities in the fund, and diversification permitted within the fund. See the prospectus for detailed explanations and each fund’s objective, policies, strategies, permitted investments, and risks. The investments you choose should correspond to your clients' financial needs, goals, and risk tolerance. Keep in mind that all investments, including mutual funds, carry a certain amount of risk including the possible loss of the principal amount invested. Diversification does not guarantee a profit or protect against a loss.
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Choice of three share classes: 529A, 529B, 529C
Fee structure Class 529A: 2.50%-5.75%
Fee structure Class 529B: 4%
Fee structure Class 529C: 1%
See our pricing sheet in Related Links for more pricing information.
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- $250 minimum for initial investment
- there is no minimum for additional contributions
- accepts contributions until account balance reaches $310,000 per beneficiary
$25 annual account fee; waived for accounts with assets of $25,000 or more, as well as for Oregon residents.
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1. As much as $14,000 ($28,000 for married couples) can be contributed each year without gift-tax consequences as of 2015.
2. Under a special election, up to $70,000 ($140,000 for married couples) can be contributed at one time by accelerating five years’ worth of contributions (as gifts) as of 2015. This feature makes it an attractive estate planning tool for many. Account owner will not incur federal gift taxes as long as he/she does not make any additional gifts to the same designated beneficiary for four years after the year during which he/she makes the accelerated five-year gift. In order to do this, the account owner must make an election on a federal gift tax return for the year of the contribution. However, if the account owner elected to treat the gifts as having been made over a five-year period and dies before the end of the five-year period, the portion of the contribution allocable to the remaining years in the five-year period would be includable in computing the account owner’s gross estate for federal estate tax purposes. Your client should see a tax advisor for more information regarding the gift and estate tax consequences of opening an account.
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Once the process is completed, you’ll find that maintaining the account is seamless.
- Track daily pricing online by fund symbol.
- Access account information, balances, and transactions online via MFS Access
- Call the dedicated MFS 529 hotline for investment professionals, 1-866-MFS-PLAN (1-866-637-7526) .
- Tell clients to call the MFS 529 Savings Plan shareholder hotline, 1-866-529-1637 with any account questions .
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Benefit for Oregon taxpayers
Oregon taxpayers are eligible for a state tax deduction from Oregon taxable income for contributions to the MFS 529 Savings Plan . For tax year 2015, single contributors qualify for a $2,300 state tax deduction and couples married filing jointly qualify for a $4,600 state tax deduction when they contribute to the MFS 529 Savings Plan. These deduction limits will be adjusted for inflation by the Oregon Department of Revenue. For more information, click here.
About the MFS 529 Savings Plan
The MFS 529 Savings Plan is a flexible college investing plan sponsored by the state of Oregon, acting by and through the Oregon 529 Savings Board and is part of the Oregon 529 Savings Network. MFS Fund Distributors, Inc. is the Program Manager. MFS 529 Savings Plan accounts are considered municipal fund securities.
Depending on your state of residence and the state of residence of the beneficiary, an investment in the MFS 529 Savings Plan may not afford you or your beneficiary state tax benefits or other benefits only available for investments in such state's qualified tuition program. See your tax advisor to be sure you understand the tax issues related to a 529 plan. Withdrawals of earnings not used to pay for qualified higher education expenses are subject to an additional 10% federal tax penalty. State taxes may also apply.
There is a $25 annual account fee associated with the MFS 529 Savings Plan. This annual fee is waived for Oregon residents and for those accounts with assets of $25,000 or more. Investments in 529 plans involve investment risks. You should consider your clients financial needs, goals, and risk tolerance prior to investing.
Before investing in the MFS 529 Savings Plan, consider the investment objectives, risks, charges, and expenses. For a prospectus or summary prospectus containing this and other information, as well as a Participant Agreement and Disclosure Statement and Expense Supplement, contact MFS or view online at mfs.com. Read it carefully.
MFS does not provide legal, tax, or accounting advice. Individuals should not use or rely upon the information provided herein without first consulting with their tax or legal professional about their particular circumstances. Any statement contained in this communication (or elsewhere on this web site) concerning U.S. tax matters was not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code. This communication was written to support the promotion or marketing of the transaction(s) or matter(s) addressed.