05/08/2007 The check's in the mail? State wants to give back leftover money
Carlisle Sentinel
12/17/2006 Which of Pa.'s college-investing plans is better?
Philadelphia Inquirer
11/21/2006 Vanguard managing Pa.'s college-saving plan
Philadelphia Inquirer
11/21/2006 Vanguard taking over Pa. college savings plan
Pittsburgh Post-Gazette
11/21/2006 State has new ways to save for college
Allentown Morning Call
09/21/2006 Clean tech has investors' attention
ZDNet.com
09/14/2006 States give tax breaks to college savers
USA Today
09/13/2006 Treasury to invest in clean technology
Central Penn Business Journal
09/03/2006 Heard off the street: Feds, state give college savings plans more oomph
Pittsburgh Post-Gazette
08/20/2006 On Personal Finance | Pay tuition now, not later at higher cost
Philadelphia Inquirer
03/19/2006 Unclaimed cash in Pennsylvania treasury might just belong
to you
Philadelphia Inquirer
03/01/2006 Consumer Alert: Don't Pay For Free Information
ABC 27 News
02/26/2006 Pennsylvanians might get low-interest loans Allentown Morning Call
11/22/2005 Pennsylvania Has Low-Risk Rating On College Plan
Wall Street Journal
05/08/2007
The check's in the mail? State wants to give back leftover money
By David Blymire
Carlisle Sentinel
If you’re like Julie Hoke of Richmond, Va., your reaction to seeing your name inside today’s Sentinel might go something like this:
“Am I rich?”
That was Hoke’s response to learning her name appears on a list of people whose unclaimed property is being held in safekeeping by the Pennsylvania Treasury Department.
The clinical research assistant for a medical practice lived in Carlisle her whole life before moving south almost two years ago.
This summer, she hopes to go back to school to become a special education teacher, she says, adding she’d love to find out she’s got a healthy sum coming her way.
Hoke’s next question followed naturally from her first: “How do I get the money?”
People whose names appear on the list can go to www.patreasury.org for the online database, or call the department’s hotline number shown elsewhere on this page.
Each year, the department receives millions of dollars in unclaimed money from such sources as abandoned bank accounts and forgotten stocks or insurance policies, officials say.
The treasury currently is holding more than $1 billion in assets until their owners claim them.
Those can include paychecks that couldn’t be delivered because somebody moved away but didn’t notify the post office, or sometimes from unexpected sources, says Elizabeth Kupchinsky, treasury spokeswoman.
“Sometimes people are named as beneficiaries on life insurance policies,” she says.
Kupchinsky encourages everyone to take a look at the database.
“You never know what could be out there,” she says.
The treasury department took out full-page ads in the Sentinel and newspapers in three other counties listing those people for whom the department is holding unclaimed assets worth $100 or more.
The department first sends letters to people notifying them of how to claim their money. If they don’t respond to the letters, their names appear in newspaper ads.
In addition to letters and ads, the department sends representatives to public events, malls, expos and fairs throughout the year. Officials also work with members of the General Assembly to find people.
Local listings included
A quick glance through the ad turns up some interesting local listings, including “C.H. Masland & Sons, attention in-house management” and “TV Cable Co.” in Carlisle.
Both companies merged or were sold to other companies.
Masland became part of Lear Corp. more than 10 years ago, yet this list shows only names that have recently come into the treasury.
So how does the department handle such cases?
Kupchinsky says they’re listed that way because the treasury department received the funds from a financial institution where those names were listed in the books.
Treasury officials hope that someone who used to be an accountant or officer with the entities will see the ad and contact the department, she says.
To claim the funds, they’ll need to produce specific documents such as a sale or merger agreement proving that they should receive the money, she says.
Another listing was for a generic “assessment lawyer” in Camp Hill.
“We did agree it was kind of curious,” Kupchinsky says of the listing, but adds that as in the above example, that was the name listed in the books of the financial institution that turned over the money.
Such a lawyer would need to show proof to claim the money, she says.
If the long-forgotten asset was part of a divorce settlement, the claiming party would have to produce a court order showing the distribution of assets, she says.
In all, the department last year reunited more 77,000 people with a combined $124 million, officials say.
The department will list more than 131,000 names in newspapers across the state this year, officials say.
Related links:
• Search Treasury's Unclaimed Property database!
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12/17/2006
On Personal Finance | Which of Pa.'s college-investing plans is better?
Jeff Brown
Columnist
Philadelphia Inquirer
Need a good gift for a child -- one that costs as little as $25, is a snap to find for any holiday, won't endanger the health and will someday help enhance the intellect?
Then think about Pennsylvania's Direct Investment Plan, a "529 plan" for tax-free college investing.
I've long been down on the Keystone State's two 529 plans. But things have changed.
In fact, now there's a bit of a dilemma: Which plan is better, the investment-style plan using mutual funds or the prepaid tuition plan that lets you pay for future college costs at today's prices? I'll have some pointers on that down below.
In the most recent improvement, Pennsylvania's Direct Investment Plan moved last month from mutual funds offered by Delaware Investments to ones from the Vanguard Group, solving one of the biggest problems: excessive fees.
Previously, some investment options charged as much as 1.6 percent a year. Now all are just 0.7 percent. Also, the minimum investment has been reduced to $25 from $1,000. (Delaware still runs a Pennsylvania 529 for people who invest through brokers and financial advisers, but I'd go for the Direct Investment Plan instead because of the lower fees.)
Though the plan uses Vanguard funds, it is administered by an outfit called Upromise Investment Advisors, which has a rewards program that can pump extra money into your plan when you buy certain products or shop at participating merchants. (For the last 18 months or so, I've been using Upromise to invest in Vanguard funds through another state's 529, and I've made only a pittance on these rewards. But I haven't tried very hard. With careful shopping, I'm sure one could do well.)
In all 529s, investment gains are free of federal tax when withdrawn for tuition and other approved education costs. Since last summer, gains also have been exempt from Pennsylvania tax.
In addition, Pennsylvanians can get an income-tax deduction on contributions of up to $12,000 a year for each beneficiary, or $24,000 for couples filing joint returns.
Plan proceeds can be used at virtually any college or graduate school in the country. But be sure to read all the plan materials, because there are tricky provisions on things such as what happens if your beneficiary doesn't go to college or doesn't need all the money because of scholarships.
Pennsylvania's other 529 program is the Guaranteed Savings Plan, which allows you to pay for college credit hours at this year's prices and redeem them years later. The idea is to protect against the rising cost of tuition, which for years has been going up faster than inflation.
This program offers a number of investing choices, many of which are meant to track the tuition increases at specific colleges. But if your child goes elsewhere, those credits can be converted into cash and used there.
I objected to the guaranteed plan for years because the state had a sales surcharge that undermined the credits' value. But the surcharge was lifted in the summer.
Which 529 plan is better?
There's no absolute answer, since we don't know how much tuition will rise and how well the financial markets will do.
When the stock market was soaring in the '90s, investment-style plans won hands-down. But in the early part of this decade, the prepaid tuition plan was better because tuitions were soaring while the stock market slumped.
One thing can be said for sure: The prepaid tuition plan is more conservative. Tuition is almost certain to rise, and the plan guarantees you'll get back at least as much as you'd put in, even if tuitions were to drop.
The investment plans use a series of Vanguard mutual funds that own stocks and bonds. You could make more this way than with the tuition plan -- but you could lose money, too.
To offset that risk, consider splitting your money between the two plans.
And in the investment plan, look at the options tied to your child's current age. For young children, these emphasize stocks over bonds. Then the mix gets more conservative as the college years approach. This automatic rebalancing is a great benefit -- it's terribly important, and most of us don't have the knowledge or discipline to do it ourselves.
Find information on the tuition plan at www.TAPfacts.com, or phone 1-800-440-4000. For the investment plan, go to www.pa529direct.com or call 1-800-294-6195.
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11/21/2006
Vanguard managing Pa.'s college-saving plan
By Benjamin Y. Lowe
Philadelphia Inquirer
Pennsylvania college savers will have lower fees as well as lower minimum investments as they prepare for ever-higher tuition bills.
State Treasurer Bob Casey Jr. said yesterday that the Vanguard Group has taken over management of the state's $190 million Direct Investment Plan from Delaware Investments.
A spokeswoman for Delaware Investments, which manages a similar plan for the State of Hawaii, said the Philadelphia money manager was exiting the business, but would not elaborate.
Under the plan, savers can deduct contributions up to $12,000 annually per child in state income taxes and have their contributions grow free of federal income tax.
For asset managers, these plans, known as 529 plans, can be inefficient because they cater to lower- and middle-income savers and carry requirements that can change with political moods, said Brian M. Boswell, a research analyst at Financial Research Corp., a Boston investment consultancy.
"Having a large number of small accounts is extremely expensive to manage and track," Boswell said. "There are also a lot of politics involved. Because it's a state-sponsored vehicle, it can be subject to change according to who the state treasurer is at the time."
Pennsylvania is Vanguard's 18th state college-savings plan. The company has $14 billion in 529 assets, with its two biggest plans those in New York ($5 billion) and Nevada ($2.1 billion), according to Financial Research Corp.
In all, companies manage about $82 billion in these types of college-savings plans, Boswell said.
John Demming, a Vanguard spokesman, said the Malvern mutual-fund family would lower the minimum investment in the state's 529 Direct Investment Plan to $25 from $1,000, eliminate a $25 annual maintenance fee, and lower the expense ratio to 0.70 percent of assets. Under Delaware Investments, that annual expense had been in a range of 0.80 to 1.6 percent.
At the plan's current size, Vanguard would have revenue of $1.33 million a year, compared with at least $1.52 million that Delaware Investments took in.
"We're fortunate, and families saving for college are fortunate, to have Vanguard as a part of this," Casey said in an interview.
Demming said Vanguard has sent notice of the change to the Pennsylvania plan's 12,000 members. Upromise Investments Inc., of Needham, Mass., will administer the fund.
Measured by assets, Pennsylvania's Direct Investment Plan ranks 33d out of 50, probably because Pennsylvania also has a Guaranteed Savings Plan, managed by Upromise. That plan allows savers to purchase future tuition credits at today's prices and has the same tax benefits. It has $1.2 billion in assets.
Related links:
• 11/20/2006 Vanguard, Upromise chosen to overhaul Pa.'s 529 college savings program
(Treasury news release)
• www.pa529direct.com — Official website of the Pennsylvania 529 Direct Investment Plan, featuring investments by Vanguard
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11/21/2006
Vanguard taking over Pa. college savings plan
By Len Boselovic
Pittsburgh Post-Gazette
Pennsylvanians saving for college got some good news yesterday when state Treasurer Robert P. Casey said Vanguard will take over one of three 529 college savings plans sponsored by the state.
The Valley Forge mutual fund company will take over management of the $191 million direct-sold 529 plan from Delaware Investment, which has managed the plan since it was launched in 2002.
All but one of the 13 investment options Vanguard offers charge fees of 0.7 percent, significantly lower than the 0.8 to 1.6 percent Delaware charged. Vanguard also is eliminating a $25 annual fee and lowering the minimum initial investment from $1,000 to $25.
Many financial advisers in the region have steered clients to 529 plans offered by other states, citing Delaware's lackluster performance and high fees. Mr. Casey said Vanguard's investment skill, superior service and low costs will make the plan one of the nation's best.
Money in 529 accounts grows tax-free and withdrawals aren't subject to federal or Pennsylvania taxes if used for legitimate education expenses. Pennsylvania made the plans more attractive this summer by allowing state income tax deductions for 529 plan contributions.
The direct-sold plan being managed by Vanguard is the second-largest of three 529 plans offered by the state.
The $1.18 billion Guaranteed Savings Plan lets parents, grandparents and other savers buy tuition credits at today's prices. It is based on the premise that the state can invest the money wisely enough to keep pace with rising tuition costs.
Delaware retains management of the third plan, called the adviser-sold plan because investors go through financial advisers rather than the investment manager. The adviser-sold plan has assets of $181 million and offers a series of portfolios built around Delaware-managed mutual funds.
Those portfolios are the same as those offered by the direct-sold plan, which is being transferred from Delaware to Vanguard. Assets in the Delaware-managed portfolios are automatically being shifted over to 13 comparable portfolios built around Vanguard funds. The options include three age-based portfolios, which adjust the balance of stocks and bonds as a child approaches college age, and 10 individual portfolios that range from a money market fund to an aggressive growth portfolio.
One of the individual portfolios invests exclusively in Vanguard's FTSE Social Index Fund and has expenses of 0.75 percent. The fund invests in companies that have good records when it comes to environmental policies, hiring women and minorities and maintaining a safe and healthy workplace. The fund shuns stocks of companies involved with tobacco, alcohol, adult entertainment, firearms, gambling and nuclear power.
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11/21/2006
State has new ways to save for college
Pennsylvania switches 529 investment plans to Vanguard with more options, lower fees.
By Sam Kennedy
Allentown Morning Call
WHY 529 PLANS?
The plans allow parents to invest tax-free for their children's college educations. Parents in Pennsylvania can buy shares of mutual funds today and get a state tax deduction. Later, money can be withdrawn — without incurring taxes — to pay for tuition and other educational expenses.
Pennsylvania is offering new investment options for its do-it-yourself college savings plans, the latest of several recent changes that together make the state's overall program one of the most progressive in the country.
The change is the result of a shake-up announced by state Treasurer Bob Casey Jr.'s office on Monday: Vanguard of Valley Forge, is replacing Delaware Investments as manager of the state's 529 college investment plans.
Vanguard, known for its low fees, will offer 13 mutual funds in which parents can invest for their children's educations. Delaware Investments had nine.
The switch also will eliminate a hurdle: Vanguard will require only $25, rather than $1,000, to start an account, according to the treasurer's office.
''It matters a lot,'' Joseph Hurley, founder and chief executive officer of SavingforCollege.com, said of the change. ''Its [Vanguard's] reputation is excellent as a provider of low-cost mutual funds.''
As the cost of higher education has skyrocketed in recent years, the 529 plan — named for a section of the federal tax code — has become one of the country's most popular college savings tools. There are two types of 529 plans: investment plans and prepaid tuition plans.
Investment plans, the more popular, work much the same way as 401(k) retirement savings plans. They allow parents to buy shares of mutual funds on behalf of their children; later, money can be withdrawn tax-free.
Prepaid tuition plans, on the other hand, allow people to pay a child's tuition in advance. Earlier this year, Pennsylvania selected Upromise Investment of Needham, Mass., to replace Delaware Investments as the manager of its prepaid tuition plan, called the Guaranteed Savings Plan.
The new investment 529 plan under Vanguard will allow parents to choose from among three age-based funds, in which money is automatically moved to more conservative investments as a child approaches college age; and 10 individual funds, including a ''socially responsible'' equity fund, that offer investment choices of stocks, bonds and a money market fund.
In contrast to many other 529 plans, there will be no annual account fee and all of the plan's investment options, except the socially responsible fund, will have a 0.7 percent management fee. The socially responsible fund's management fee will be 0.75 percent. Delaware Investments' fees ranged from 0.8 to 1.6 percent.
Casey...described Vanguard in a news release as ''a trusted Pennsylvania brand with a reputation for integrity.''
Nearly 13,000 Delaware Investment accounts worth a total of $191 million were automatically transferred to Vanguard on Monday, according to Karen Walsh, spokeswoman for the treasurer's office. Holdings were shifted from Delaware Investments funds to similar Vanguard funds.
In the summer, the state made all contributions tax-deductible and all qualified withdrawals free of state income tax — for any 529 plan, not just Pennsylvania's.
The federal government also made its tax benefits permanent. They had been set to expire in 2010.
Delaware Investments, of Philadelphia, will continue to handle the state's broker-managed 529 investment plans and will continue to offer Delaware's brand of mutual funds.
More information is available online at http://www.pa529direct.com or at 800-294-6195.
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09/21/2006
Clean tech has investors' attention
By Martin LaMonica
ZDNet.com
NEW YORK -- A group of institutional investors announced on Thursday a combined investment of $1 billion over the past 18 months in clean technology, a fast-growing sector gaining corporate interest.
The Investment Network on Climate Risk (INCR), made up of state institutional investors such as pension funds, said that members have allocated money in a range of technology companies specializing in renewable energy, energy efficiency and biofuels.
The INCR disclosed that it achieved its $1 billion investment goal, first articulated last year, at the Cleantech Venture Forum, a showcase for clean technology investments held here this week.
The Pennsylvania State Treasury's office, an INCR member, has earmarked $90 million for clean technology, including a $40 million private equity fund and a reallocation of $50 million, said Keith Welks, special counsel to the Treasury office, speaking at the conference.
Welks said that Pennsylvania decided to reassess its risk associated with climate change stemming from global warming.
For example, corporations in which the state holds stock will likely have to deal with mandated carbon taxes in the U.S. in coming years, and agriculture firms could be affected by changing weather patterns, he noted.
"In light of these considerations, it's not a social good to be thinking about this (clean tech) space," Welks said. "As prudent investors, we need to think...how changes will have an impact, be a lot smarter and take a long view."
Other institutional investors here at the conference echoed Welks' comments, saying that clean technology represents an attractive investment category for both financial and social reasons.
Win Neuger, executive vice president and chief investment officer of AIG, said that the insurance and investment company has made clean technology part of an initiative around socially responsible investing.
AIG has built "green buildings" and now offers consulting services around reducing carbon emissions. It also has socially responsible funds, some of which invest in clean technology companies.
"The evidence is increasingly clear that any investor who fails to consider environmental, social and governance issues is taking risks that they are not accounting for," Neuger said. "Further, they're missing the upside potential of clean energy and carbon-reducing technology."
Neuger said that consumer-interest issues, such as environmental problems and labor abuse, are influencing the corporations they work for or buy products and services from.
"More and more people care. As investment managers, this creates investment opportunities for us to pay attention," he said.
Paying off?
Reflecting the growing interest in the sector, conference organizer Cleantech Venture Network issued on Thursday revised forecasts for venture capital investing.
Venture capital investment in clean technologies--which covers a wide range of areas, from renewable energy to water purification--is forecast to grow to $10 billion between 2006 and 2009 in North America, according to Cleantech Venture Networks. Worldwide, venture investments in that period are forecast to be $17 billion.
That compares with $6.4 billion in venture investments from 2003 to 2006, and $3.2 billion in the previous three-year period.
Cleantech Venture Network's chairman, Nicholas Parker, said that the technology sector is entering a period where investors will be looking not just for good technology ideas but solid financial returns as well.
Initial data indicates that returns are comparable with other technology areas, Parker said.
"Now that (government) policy, consumer and corporate drivers are coming together, subject to disruptions in the world economy, there will be good returns in the coming years," he said.
Mindy Lubber, the president of Ceres, a coalition of investors and environmentalists, said that understanding risks associated with climate change has reached "critical mass," and that is reflected in the institutional investor's decisions to consider clean technology.
"These issues have financial impact. (Institutional investors) are not grandstanders. They are not environmentalists. They're smart fiduciaries," Lubber said.
Despite the rising interest, the clean tech industry overall does face some challenges, Parker said.
There is an "absence of leadership" from the federal government to encourage clean technology development, he said. The industry also faces economic constraints from the overall economy, such as high steel prices restraining wind turbine production.
In addition, there is some growing concern that a clean technology may be attracting excess investments.
"Our view is that the category is not overinvested," said Parker. "There are a couple of areas getting a little frothy, perhaps, a little overexuberant."
Related links:
• Read more about the Keystone Green Investment Strategy
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09/14/2006
States give tax breaks to college savers
By Kathy Chu
USA Today
Giving another boost to 529 college-savings plans, a growing number of states are allowing their residents to take state-tax deductions for contributions they make to other states' 529 plans.
Pennsylvania, Maine and Kansas have approved such tax breaks, and a handful of other states are considering similar measures. Previously, these states offered either no tax deduction or a deduction only if a resident contributed to the state's own 529 plan.
The states' move toward tax parity for all 529 contributions is likely to make it simpler and more appealing for residents to save for their children's college educations. A new law that makes permanent the 529s' federal tax benefits has also helped spark more interest in these plans.
The 529 plans — named for a section of the federal tax code — have gained popularity by allowing parents and grandparents to put away money for college and pay no federal tax on withdrawals if the money goes for tuition and books. In many cases, the money can be used for any college or university, not just a school in the state that sponsors the 529.
More than half of states provide deductions — generally ranging from $2,000 to $12,000 — on state income-tax returns for 529 contributions.
Over the past four years, 529 assets have more than quadrupled, to about $93 billion as of June 2006, compared with about $22 billion at the same time in 2002, according to the College Savings Plans Network, an organization of states that sponsor 529s.
In Kansas, Treasurer Lynn Jenkins says the move to expand the state-tax deduction for Kansans starting in 2007 to all 529 contributions, rather than just those to the in-state plan, means the "playing field is entirely level" for investors.
The change "may make our plan even better," Jenkins says. "It forces me to make sure that happens."
College-financing experts recommend that investors compare investment options and expenses — in addition to state tax benefits — before socking away money in any one 529 plan.
The trend isn't likely to catch on in every state. After all, states will see less tax revenue if they extend deductions to contributions to out-of-state 529 plans. Pennsylvania estimates a loss of $25 million a year in tax revenue from the state's 529 tax change, which took effect this year.
"There's no question that in any instance, a tax break is going to reduce revenue," says Pennsylvania Treasurer Robert Casey. Still, "I think that when you're providing an incentive to save for college now, it's an exchange many people think is a good strategy."
There may also be a downside for some investors. Should many residents of a state decide to bypass its 529 plan in favor of out-of-state plans, that state plan's investment management fees could rise to compensate for fewer assets in the plan, says Joseph Hurley, founder of Savingforcollege.com, a website that compares states' 529 plans.
Related links:
• www.pa529gsp.com — Official website of the Guaranteed Savings Plan, Pennsylvania's
tax-smart, low-risk way to save for college
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09/13/2006
Treasury to invest in clean technology
By David Dagan
Central Penn Business Journal
State Treasurer Robert P. Casey Jr. plans to use the state’s investment clout to support environmentally friendly businesses.
Under the plan, dubbed the Keystone Green Investment Strategy, the Treasury Department will:
• Invest up to $40 million directly in so-called “clean technology” firms.
• Invest up to $50 million in stocks of publicly traded firms with clean-technology business. Investment managers would also screen the stocks of other companies for energy-related and environmental risks.
• Join a network of institutional investors focused on climate change.
The Treasury Department invests and manages funds of state agencies and local municipalities.
In a written statement, Casey said the strategy would provide superior returns while attracting private investment and creating jobs.
Related links:
• Read more about the Keystone Green Investment Strategy
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08/20/2006
On Personal Finance | Pay tuition now, not later at higher cost
By Jeff Brown
Columnist
Philadelphia Inquirer
Pay for college today - at this year's prices - and avoid the mountain of tuition increases likely to build up in the years before your child finishes high school. Given the frightening pace of tuition increases, you might cut a young child's future college costs in half by paying now rather than later.
That's the promise of Pennsylvania's Guaranteed Savings Plan, one variation on the popular tax-free Section 529 plans. And the state last week made the program more appealing by removing surcharges piled atop credit-hour prices.
So take a look. And do it fast: You can still get college credit hours at 2005-06 prices before rates go up Sept. 1, by as much as 6.9 percent.
This and similar plans in other states are known as prepaid tuition plans because that's just what you do - pay now, go to school later.
Converting credits to cash
You buy credit hours for a specific state college or university, but the credits can later be converted into cash, based on their value at the specified school at the time, and used at virtually any school in the country. The credits can be used for most higher-education expenses, not just tuition.
To participate in Pennsylvania's prepaid plan, either the beneficiary or the account holder, such as a parent, grandparent or other adult, must be a Pennsylvania resident when the account is opened. That is a typical requirement of prepaid plans in other states as well.
As with all 529 plans, investment gains - or, in this case, the rising value of credits owned - are free of federal tax, as well as Pennsylvania income tax, if used for qualified college costs. And Pennsylvania allows a state-tax deduction of up to $12,000 per year invested for each child - or $24,000 for couples filing joint returns.
In the past, I haven't been enthusiastic about prepaid plans, but I'm coming around.
In the '90s I thought it made more sense to use an investment-style 529 plan that contained stock-owning mutual funds. In those days, stock returns outstripped tuition increases, so a dollar put into an investment-style plan was likely to grow faster than a dollar put into a prepaid tuition plan, where the gain was equal to the pace of tuition increases.
Snags in the 529 plans
That changed with the stock-market slump of the early 2000s, making prepaid plans comparatively more appealing. But then there was another snag. Because tuition rates were soaring and the state was getting a poor investment return on the money it held in the prepaid plan accounts, officials worried that the plan might one day run short. So in 2003 they imposed a "premium," or surcharge, to build a reserve.
With the premium, a credit hour through the plan cost more than the school was charging its current students. For the 2005-06 school year, premiums ranged from nothing at community colleges to 12.6 percent at Penn State.
But things have changed. Tuition increases have slowed, and the investment return on the plan's assets has improved. So last week, Treasurer Robert P. Casey Jr., whose office oversees the program, announced that the surcharges had been dropped.
Making it even better, they were dropped retroactively to cover credits bought as far back as last September. Premiums paid during the last year are converted into additional credits. For example, if you had bought 10 credits for Penn State, you now have 11.26 credits.
While removing the surcharge benefits everyone, it should be of special interest to people saving for students who will begin college within just a few years - people likely to emphasize safety over investment growth. They no longer have to worry that there's not enough time for a credit's value to grow enough to offset the premium.
On Sept. 1, the price of credits bought through the plan will rise to match this fall's tuition increases. The hikes range from 2.7 percent at the state system of higher education to 6.9 percent at Penn State, University Park. (Incidentally, there are also credits designed to match average tuition increases for private four-year colleges and the Ivy League schools.)
Is a prepaid plan better than an investment-style plan?
As I said, the prepaid approach is pretty attractive if college is coming soon, because it essentially guarantees your holdings will grow with tuition rates. There is virtually no chance of suffering a loss unless the plan becomes insolvent, which is very unlikely.
Investment-style plans using stock mutual funds can have higher returns than prepaid plans do, but they can also fall in value if stocks sink. If you have very young children, the law of averages probably favors the investment plans, as you might well have enough time to weather downturns.
Of course, you could have both types, getting peace of mind from the prepaid plan and reaching for a higher return with the riskier investment plan.
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03/19/2006
Unclaimed cash in Pennsylvania treasury might just belong to you
By Mari A. Schaefer
Philadelphia Inquirer
State Sen. Vince Fumo is on the list. So are Comcast execs Brian and Ralph Roberts. Mayor Street, Campbell Soup heiress Dorrance Hill Hamilton, U.S. Sen. Arlen Specter, and Walter Annenberg, the late ambassador to Britain, are on it, too.
So are various institutions, including the University of Pennsylvania veterinary school and Franklin and Marshall College.
They are among about 80,000 people and organizations who may have unclaimed cash - about a billion dollars, all told - sitting in the Pennsylvania state treasury. The commonwealth is in the midst of its annual ad campaign to find the rightful owners.
Most of the people on the list don't even know it.
The Sisters of Mercy in Merion had no idea when they learned last year the order was owed nearly $176,000, which it used to help its neighborhood ministries.
Since January 2005, more than $107 million in unclaimed property was returned to the owners. While the average claim is about $1,300, the largest payout the state made was $1.4 million in 1999.
This year, one unidentified New Jersey resident received $2.6 million, the state's largest payout ever to an individual. Last year, New Jersey had 38,430 claims and returned $60.7 million.
Once a year, the Pennsylvania Treasury Department advertises the names and last known address of those individuals and businesses owed unclaimed funds. This year it is publishing the alphabetical lists on Mondays and Thursdays through March 23. New Jersey publishes its list every April and August.
The money comes from financial assets such as bank accounts, stocks, uncashed checks, certificates of deposit, insurance benefits, unused gift certificates, and property abandoned in safe-deposit boxes, which if left untouched for about five years is declared unclaimed property.
"A lot of people will open a bank account, and they don't realize they need to have a transaction every year or it will become dormant," said Karen Walsh, press secretary for the Pennsylvania Treasury.
Most states' treasury Web sites have links to search their unclaimed-property databases. By searching a first and last name, you can see whether there is any unclaimed property. The Pennsylvania site tells visitors only whether the amount owed is above or below $100. Forms and instructions to complete the claim are available on most sites.
Last month, the Philadelphia School District discovered it was entitled to $35,000 from the state of Texas when an Oregon woman, hoping to find money for nonprofits, discovered the unclaimed funds.
They were not the only ones to be surprised.
Paul Metzger, the controller at Franklin and Marshall College, was notaware the college was owed unclaimed property in Michigan. He plans on looking into it.
The chief financial officer for the Penn veterinary school, Kelly Reynolds, will contact the state of North Carolina to see about unclaimed property due the university's New Bolton Center.
The Pennsylvania Treasury Web site reveals Comcast chairman and chief executive officer Brian Roberts and his father, company founder Ralph Roberts, were due some money when a private insurance company changed to a public entity. Their spokesman, Timothy Fitzpatrick, said the Robertses were not aware they were entitled to the unclaimed funds totaling about $500.
"Brian and Ralph are going to add the funds returned to them to their existing United Way support," he said.
The United Way isn't the only charity to benefit from an unexpected windfall.
Several weeks ago, Fumo's son searched the treasury site for his father's name and found the elder Fumo was due an amount less than $50 from Independence Blue Cross. The senator's spokesman, Gary Tuma, said Fumo would give the money to the Caring Foundation of Blue Cross.
In 2005, the Sisters of Mercy in Merion learned they were entitled to $175,654.
"The Treasury Department actually called us," Sister Patricia Carroll said. "They brought the forms to us, we filled them out, and within six weeks we had our check. They were wonderful."
The order had been owned the money - left to them through sales of stock and small parcels of real estate - for years, but a discrepancy in an address kept them from getting the notification. Because of the large amount, the state contacted them.
The money went into a general fund used for their work with the homeless, AIDS patients and neighborhood ministries.
The mayor of Philadelphia may be due funds from an insurance company. Specter apparently is owed cash from a bank and two phone companies. Hamilton has unclaimed stock dividends from Intel. And Annenberg, who died in 2002, left behind uncashed checks. The heirs to his estate will have to file with the state to reclaim the funds.
Besides the state treasury sites, there are various independent Web sites that offer to conduct a search for a small fee. But there is no need to pay someone to learn whether you are due some cash.
"You do not need to hire a firm," said Walsh, of the Pennsylvania treasury. "There is no fee for obtaining what is rightfully yours."
Related links:
• Search Treasury's Unclaimed Property database!
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03/01/2006
WARNING: The Pennsylvania Treasury Department is currently reviewing the practices of organizations and individuals that call themselves "property locators" or "finders." They frequently send letters to residents of Pennsylvania and other states informing them that they are owed money by the Commonwealth and that, for a fee or a percentage of the recovered property, the firms and/or individuals can help them get it. In some cases, these "finders" charge a fee just to send prospective claimants a claim form.
Please understand that you can contact us directly to obtain unclaimed property information and you NEVER have to pay a fee to claim what is yours from our Bureau of Unclaimed Property! If you do use a "finder" or any third party to help locate or claim your property, please make sure the identity of the "finder" is included on or with the claim form. By law, "finders" can charge a fee of NO MORE THAN 15% of the amount of the claim.
Furthermore, personal identification information relating to unclaimed property claimants, including Social Security numbers, is confidential. The Treasury Department does not make such information available to the public or to third parties engaged in business as “finders” of unclaimed, lost, or abandoned property.
“Finders” have access to publicly advertised lists of owners of unclaimed property. These lists do not contain the amounts of the property or the Social Security numbers of owners, and Treasury does not provide that information to “finders.”
However, some “finders” use sources available on the internet to obtain Social Security numbers, or portions thereof, relating to owners of unclaimed property, as well as the amount of that property.
If you are worried about possible identity theft, you should contact the U.S. Federal Trade Commission’s identity theft hotline at 1-877-438-4338 or visit the FTC’s web site at www.consumer.gov.idtheft. The U.S. Social Security Administration’s Office of Inspector General also has a Fraud Hotline to contact if you have questions concerning the buying and selling of Social Security information. Their toll-free hotline is
1-800-269-0271 and their web site is www.ssa.gov/oig/hotline.
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CHECK FRAUD WARNING: The state of New Hampshire recently informed the Pennsylvania Treasury Department about numerous incidents of check fraud in which citizens are receiving fraudulent checks and letters that bear the name and signature of the State Treasurer. The letters encourage individuals to send 90% of the value of the amount they are allegedly due to the criminals in exchange for a check to cash. The New Hampshire State Treasurer reports that the check values are large, in one case over $250,000. Please verify the authenticity of any letter claiming to have been sent by a state Treasury and do not send any money to anyone claiming to be a Treasury Department representative.
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Consumer Alert: Don't Pay for Free Information
Transcript of story by Dennis Buterbaugh, Consumer Reporter
ABC 27 News
From time to time, we encourage our viewers to search the state Treasury Web site and see if there could be some unclaimed property or money in their name. Now companies are trying to make a profit on that unclaimed money by selling information that should be free.
“A hundred dollars to me is a lot”, said Erma Deiter of Perry County, talking about an offer she got in the mail. A company called U.S. Claims Services says she has unclaimed insurance money in two accounts.
“U.S. Claims Services are telling me that I have some money coming to me if I send $50 to them to get this money,” said Erma Deiter.
That’s $50 for each account. Unclaimed funds in Pennsylvania go to the state Treasury. Erma’s unclaimed accounts do come up when searching the Treasury Web site. The Treasury Press Office says about $1,500 is there for her. That’s free information to anyone that wants to search the site or give Treasury a call.
I called U.S. Claims Services: “It just seems to me that you want to charge her $100 for something she could get for free.”
The company says the $100 dollars is to cover its expenses in searching for unclaimed funds. While the company may be legal, it may not be ethical. “First of all it should raise a red flag because if you’re a winner of a lottery or if you’re applying for a loan and have to pay money, it’s not legit,” said U.S. Postal Inspector Nick Alicea.
Erma called the state Treasury direct to claim her $1500 dollars.
“That’s wonderful. I’m happy that I don’t have to pay money, that I can just get a form to fill out and receive my money,“ says Erma Deiter.
Here is a number you can call to find out if you have any money in the State Treasury: 1-800-222-2046.
There’s a lot of money sitting there, people just have to look for it and see if they can get it.
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02/26/2006
Pennsylvanians might get low-interest loans
By Beth W. Orenstein
Special to The Allentown Morning Call - Freelance
Not only are homeowners eligible for tax credits for certain energy saving improvements they make to their homes, but those who live in Pennsylvania also may be eligible for low-cost loans to finance the projects.
Earlier this year, the state Treasury Department made $20 million available to help homeowners in Pennsylvania borrow money at low interest rates to buy energy-efficient heating systems and to make other improvements to their homes that will conserve energy and reduce heating and cooling costs.
No-fee, unsecured loans of up to $10,000 are available through the Keystone Home Energy Loan Program and AFC First Financial Corp. of Allentown at 7.99 percent. Low-income homeowners will be able to obtain loans at an even lower rate of 5.99 percent.
Peter J. Krajsa, president of AFC, says the program is ideal for those who have to replace their heat pump or air conditioning units, or want to replace their old windows, or add insulation to their homes.
The cost of such projects falls in what Krajsa calls "a financing twilight zone." Between $3,000 and $10,000 is too much to put on a credit card and pay its 20-percent plus interest rate but really too little to get a home equity loan.
The 7.99 percent is 4 to 6 points lower than conventional market rates, Krajsa says.
Another advantage to the Keystone program, he says, is that it has no fees or closing costs.
So a homeowner who borrows $5,000 and pays it back over 10 years will have monthly payments of $61. They will recoup some of that through lower utility bills thanks to the improvements they make, Krajsa says.
Krajsa expects the average loan to be about $4,500.
The program started about four weeks ago. No loans have closed, but applications are pending, Krajsa says.
Homeowners can use the loans to buy Energy Star heating or cooling units and other major appliances or to make improvements to their homes that will conserve energy and save money.
Energy Star is a federal program that identifies and promotes household products that meet strict federal energy efficiency guidelines.
Examples of eligible residential Energy Star heating/ventilation/air conditioning products are: central and window air conditioning units; heat pumps; furnaces and boilers; thermostats and controls; dehumidifiers; and whole-house ventilation systems.
Eligible Energy Star building products include insulation and siding, windows, skylights, insulated doors, ceiling fans, lighting equipment and controls.
Most homeowners will save between 25 percent and 30 percent on their utility bills by opting for the energy efficient products, Krajsa says. "So the theory is that you could buy a non-Energy Star product for $4,000 or an Energy Star product for $5,000 and because of the financing, recoup your investment in a few years and after that it's all gravy."
The contractors who install the equipment must be approved by the program and about 300 have. A list of approved contractors is available from the following Web sites: www.keystonehelp.com or www.energyloan.com or www.afcfirst.com.
Related links:
• 01/12/2006 New low-rate ENERGY STAR loans can help homeowners reduce fuel costs
(Treasury news release)
• Read more about KeystoneHELP
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11/22/2005
Pennsylvania Has Low-Risk Rating On College Plan
By Jilian Mincer
Wall Street Journal
Pennsylvania's prepaid 529 college-savings plan is the first to seek -- and receive -- an investment-grade rating.
Moody's Investors Service last week gave the Pennsylvania Tuition Account Program Guaranteed Savings Plan an investment-grade rating of single-A3, which makes it a low credit risk.
The state sought the rating in order to assuage concerns about the plan's financial health. Other states have inquired about getting an investment-grade rating, which they may use to help market the savings vehicles.
"I think it lends additional assurance to program participants and to anyone getting into the program," says Joe Hurley, president and founder of Savingforcollege.com, an independent Web site that rates 529 plans and provides other information on them.
Moody's considered the plan's assets and liabilities as well as the strong support the program has from elected officials, even though the state is not legally bound to guarantee the plan, says Marty Duffy, vice president, senior credit officer at Moody's.
There are two kinds of 529 plans, the prepaid tuition plans and the college-savings plans. The prepaid plans allow savers to lock in the cost of a specified number of academic periods or course units at current prices. The more popular college-savings plans allow families to invest in a variety of funds, which grow tax-deferred and allow for tax-free distributions if used to pay for post-secondary education.
The Moody's analysis, Pennsylvania officials said, went far beyond the typical "actuary's model and evaluated tens of thousands of possibilities."
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