529 Plan Oversight

One recent study by UNC-Wilmington accounting professors concluded that federal and state tax subsidies for 529 plan participants were accruing to the mutual fund distributors and brokers rather than benefiting the investor. Another recent article declared that 529 plans have become too complex: “What should be a consumer's paradise is, instead, a quagmire of investment funds, tax incentives and tangled rules and regulations, enough to confuse the most astute expert.”
What does this mean to you? Quite likely, it will eventually mean greater oversight by the Securities Exchange Commission (SEC). With this oversight, it is possible that the current tax incentives that 529 plans enjoy may be a thing of the past.
We’ll have to keep an eye on this situation and let you know how it turns out. With the “sunset” of 2010 only five years away (how did that happen?), it makes one wonder if the tax incentives will go away at that point.