Saturday, January 27, 2007

Take it to the Bank

State Treasurer Alexi Gianoullias is wasting no time translating campaign commitments into action. On his first full day in office, he signed an executive order implementing numerous ethics reforms for his office, (many of the tenets of which are set forth in my HB1, the 'pay to play' bill).

He is now turning his sights to improving our lagging Bright Start college savings plan.

As succinctly stated in the article:
Bright Start — under a seven-year contract with one firm since its inception — has consistently been outperformed by plans sold by other states...As of the third quarter of last year, Bright Start's returns ranked 47th out of 48 similar plans nationwide, according to Joseph Hurley, chief executive of SavingforCollege.com, an independent group that analyzes college savings plans...Hurley's group also ranks Bright Start worst in overall usefulness among Illinois' two other college savings plans and lower than many other states' offerings.
One can't help but wonder if Illinois families are getting short-changed at the enrichment of the fund manager for these past many years:
And the fees collected by the fund manager, Legg Mason, rank among the highest for college savings plans, according to investment analysis firm Morningstar Inc...The program handles more than $2.1 billion in more than 141,000 accounts. It allows investors to spread their money across eight different funds, six of which are owned by Legg Mason. (emphasis added)
But there is a light at the end of the tunnel:
The contract expires in March, and Giannoulias has narrowed the field to two firms competing for the new contract... In order to vet bidders, Giannoulias assembled a group of private investment managers to evaluate offers.
Retaining experts to increase the benefits to families saving for the education of their children is not only a sound idea, it is one that is long-overdue. Good job AG.

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