T. Rowe Price forges 529 alliance with Ascensus
The retirement industry giant is tapping the leading TPA and recordkeeper to service its state-sponsored 529 plans.
T. Rowe Price, the investment management and retirement industry giant, has announced a new partnership with Ascensus, aimed at improving the 529 education savings experience for account holders.
The collaboration, unveiled on 529 day, will see T. Rowe Price maintain its role as the investment and program manager for its four state-sponsored 529 plans, while Ascensus will take over recordkeeping and account servicing responsibilities.
“Ascensus’ long track record of success and scale in 529 administration and customer service made them the clear choice to serve our 529 clients,” Phil Korenman, head of the individual investors division at T. Rowe Price, said in a statement. “This partnership complements and expands our servicing capabilities and it will deliver an enhanced experience for account owners.”
Ascensus, known for its advanced servicing technology, is the largest recordkeeper and third-party administrator of state-sponsored education savings programs in the US, overseeing 6.5 million 529 plan savers and more than $200 billion in assets under administration.
The TPA and recordkeeper also made headlines last month when it revealed it will acquire three small-business focused lines of retirement plans from Vanguard, which it said would boost its administration business to include nearly 280,000 retirement plans.
The company’s expertise is expected to bring significant benefits to T. Rowe Price’s 529 plan holders, including an upgraded online platform and improved mobile experience.
“T. Rowe Price is one of the most respected investment management firms in the world and a highly successful program manager for 529 plans,” said Peg Creonte, president of Ascensus Government Savings. “It’s a great fit for our world-class service and advanced technology, including mobile capabilities, 529 gifting, and payment integration with schools nationwide.”
The partnership aims to provide several key enhancements for 529 plan account owners, such as a dedicated mobile app designed for 529 plans, an easy-to-use website with personalized features, and an improved gifting platform. These improvements are intended to make it easier for account owners to manage their savings, contribute to their accounts, and make electronic payments directly to over 800 educational institutions.
T. Rowe Price manages 529 plans for over 675,000 account owners, helping families save for education with strong investment management and secure account services.
Since their inception in 1996, 529 education savings accounts have allowed savers to contribute funds on a tax-advantaged basis for various educational expenses, including college, technical schools, apprenticeship programs, and education loan repayment.
A recent Edward Jones survey covering thousands of US adults found a dearth of awareness and adoption of 529 plans, with half of respondents not knowing what a 529 plan is and less than a quarter actually having one. Still, roughly three fifths of respondents said they’re more inclined to enroll in one for the tax benefits (61 percent), the flexibility it offers (58 percent), and the ability to pay for qualified education expenses with the money (56 percent).
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